Insight and Innovation are the Real Drivers of Legal Outsourcing Benefits
Last month I read an insightful blog post at Horses for Sources, the advisory business of respected outsourcing analyst Phil Fersht. In a guest post, Where have all the consultants gone?, Deborah Kops, principal of sourcing strategy firm Sourcing Change, looks at developments in the business process outsourcing (BPO) industry. Because the roots of legal process outsourcing (LPO) lie in BPO, following the latter can help better understand the former.
Ms. Kops observes that BPO success was originally driven by consultants who had intimate client and hands-on industry experience. She writes
“the pioneers of the outsourcing industry, primarily BPO, came out of consultancy backgrounds… Consultants from the Big-whatever-it-was, the then Andersen Consulting and even the likes of the white shoe strategic firms, got a bee in their bonnets that their intimacy with and knowledge of their clients could be harnessed to improve and deliver business processes. They formed business lines with skin in the game, exclusively focused on doing rather than just advising, tapping not only into their own expertise, but that of their partners and colleagues.”
These BPO founders, she notes, are now exiting the business. Current BPO managers are capable but lack “the soft and problem-solving skills that come from having the training, intellectual freedom, proximity, and the ability to connect the dots that only consulting experience allows.” So she expresses concern that the “real sourcing benefit” will be lost because it “comes from the ability to solve a problem, the skills to develop a relationship with a client team at the highest level, and the knowledge of what drives value in an industry from the top down.”
Fortunately, LPO does not suffer this issue. Ms. Kops’ post nonetheless helps illuminate the real benefit of legal outsourcing. Many lawyers think labor cost savings drives legal outsourcing. We disagree. The real value lies in providers’ deep experience solving lawyers’ problems.
In LPO, the BPO analogue to consulting experience is a deep pool of legal management, operations, and process improvement experience. For example, Integreon management includes former practicing lawyers who pioneered outsourcing, lawyers who managed document review for law firms or for corporations, senior law firm managers such as COOs and CIOs, and process improvement consultants. Hands-on law firm and law department operational experience extends deep into our middle management team. Our competitors could make similar statements.
This collective wealth of experience gives a provider deep insight into law firm and law department operations and ideas about how to improve practice and support. My Integreon colleagues and I all feel the same sense of “there has to be a better way to do this”. We all sought out a place where we could work closely with lawyers to help them improve what they do and reduce costs. So reading Ms. Kops’ post triggered a very personal reaction – that’s us, without the problem of exiting experts.
Of course access to teams of associates in low cost locations is an important benefit for our clients. The real value, however, is our ability to improve how lawyers work and how law firms operate through process improvement and technology. Fortunately, as a still-growing industry with a plentiful supply of experienced legal managers interested in outsourcing, we do not face a brain drain.
Tweet