Next Gen Legal Models: Service vs Staffing

In a move that reflects long time practices in the US legal market, interest is apparently growing amongst UK law firms for use of temporary project based staff. Leading City firms in talks to bring in teams of contract lawyers (LegalWeek, 29 Oct 2009) prompts us to consider the differences between the legal process outsourcing (LPO) and local temp staffing models.

The article reports that major UK law firms may consider using temporary lawyers for more of their routine legal tasks. After the significant lay-offs over the last year and the change in the economic landscape, law firms are naturally apprehensive about venturing back into the full time recruitment market, at least until there is a sustained upturn in the volume of legal work (and even when that happens, many analysts feel that firms will not return to those old recruiting methods).

Beyond market conditions, clients demand greater efficiency. Sound familiar? Temp staffing in the UK is another example, along with LPO, of alternative models for delivering certain legal tasks. For perspective on the LPO approach, see our post earlier this week, LPO – No Longer a Case of ‘If’ but ‘When’.

Providers of project based staffing used to be called “temp agencies”; now they are labeled as “virtual law firms”. Same service, new name? No doubt they take away the strain of sourcing and vetting, take permanent staff off book, improve utilization numbers and no doubt they are capable attorneys who are offered quickly and locally…… but that is where the benefits stop. Relative to legal process outsourcing, temps lack several important benefits, some of which can truly transform the strategic approach of law departments and firms:

• Even if a provider is sourcing and vetting the lawyers, the team must still be project managed by the purchasing law firm.
• The purchasing law firm still carries the cost of infrastructure (facilities and IT).
• Lacking in this approach are any inherent process efficiencies (and improvements), metrics, continuous improvement methods, documented procedures, or quality control systems. This is contract staffing, not the offering of a methodology or a best practice operation.
• Integrated technology is not part of the offering.
• The temp lawyers are not dedicated full time staff. With the advent of LPO, purchasers can retain a core dedicated team on a full time basis at such savings who bring continuity of knowledge and staff, which in turn brings repeatability and scalability. That team can be ramped/flexed up and down.

I see the benefit in some cases of embedded, local teams. That is why we and other outsourcing companies provide onsite services, embedded into clients’ teams but managed and part of the LPO best practice process.

In short, my perception is that the LPO is a service and temp staffing is temp staffing. I’m sure there’s room for both but LPO likely will have the bigger long term impact on making law