LPO Now Driving Law Firms?
On Tuesday I read with interest Jordan Furlong’s blog post The evolution of outsourcing. He opens by noting that though LPO is “in its relative infancy, legal process outsourcing has already had a huge impact on the legal services marketplace”. Furlong focuses on two effects outsourcing has on the legal market:
“The first affects LPOs themselves: they now need to move their value proposition beyond cost savings in a market they helped to make more sophisticated. The second affects everyone: the legal profession’s response to LPO is having an unexpected effect on how legal work is distributed and how legal resources are allocated.”
We agree. As a provider, we know that simply offering lower labor cost is not enough. We therefore work hard to improve processes, introduce technology, increase efficiency, reduce cost, and achieve better outcomes for the lawyers whom we support. Personally, “I’ve put my money where my mouth is”: I recently turned over global marketing to colleagues so I could work in Integreon’s legal operations consulting group to help do exactly that.
Furlong was perhaps even more prophetic than he realized when he wrote that “a surprising number of law firms are adopting — and adapting — the outsourcing model themselves.” On Thursday, Legal Week published Taylor Wessing set to create arm in Cambridge for standardised work.
The article reports that the Anglo-German law firm will set up “an affiliated corporate services business to offer clients standardised work.” Their goal is to offer lower-cost options for routine work such as corporate due diligence. Eventually “it is likely that the firm will offer the service to third parties, including other law firms.” The firm may also partner with an IT outfit to streamline work.
“Adopting the outsourcing model” as Furlong suggests is exactly right. From the limited information we have, it sounds like the firm’s Cambridge unit will be a captive LPO.
We think this development is good news for the legal market. It further validates that law firms must respond to corporate pressure for (1) options, (2) lower cost, and (3) process improvements. Of course, we also view it as an explicit endorsement of the LPO approach.
Until recently, the corporate law market was served almost exclusively by inhouse lawyers and large law firms. Today, however, clients can choose from among boutiques, regional law firms, LPOs, and now, law firms as LPOs. This choice and competition foster innovation and drive costs down – good news for clients. Firms like Taylor Wessing that innovate benefit. And LPOs benefit because in a diverse world of providers, we believe LPOs have the skills, experience, know-how, technology, and global platform to win a good share of the work to support lawyers.