Legal Process Outsourcing

U.K. Law Society Pressures ABA to Allow Alternative Business Structures

2009-07-02T16:03:00.000-07:00

I have blogged on several occasions about the implications of the U.K.’s Legal Services Act on the legal profession on both sides of the Atlantic, and also the wider repercussions on the legal outsourcing and offshoring industry. To recap, the Legal Services Act permits through the formation of Alternative Business Structures, external investment in law firms. The House of Commons website review of the key benefits of the Legal Services Act defines Alternative Business Structures:

“Alternative Business Structures (ABS) …….. enable lawyers and non-lawyers to work together on an equal footing to deliver legal and other services in ways that better meet the needs of consumers. External investment will be possible, and new business structures will give legal providers greater flexibility to respond to market demands.”

Almost a year ago to the day, I asked the question, Are Magic Circle Firms Set for outside Investment? I wrote at the time;

“I have been convinced for a number of years now that the profit margins routinely enjoyed by the world's leading law firms would prove to be extremely enticing to the private equity market and that once the legislative restrictions on external investment were lifted, it was inevitable what would follow.”

Eight months earlier, in my November 2007 piece, The Legal Services Bill and its Impact on the Legal Process Outsourcing Industry, I discussed the passing of the bill in tandem with an overview of an article written by Tony Jomati, former Clifford Chance Managing Partner. He wrote at the time about a number of trends impacting on the U.K. legal profession.

Trend number 6 stated: “High Street legal services will be fundamentally transformed by the Legal Services Act. A number of major brands will dominate the provision of retail legal services. Will that be law firms, or outsiders such as supermarkets or banks? It is too soon to tell whether existing law firms will be able to develop strong enough retail brands.”

At trend number 7, he went on to say that, “If the Clementi reforms (the forerunner to the Legal Services Bill) are broadly successful, one can expect firms higher up the chain to take in outside capital and float on the market.”

To the best of my knowledge this concept of external investment in law firms remained firmly entrenched within the UK’s legal borders, that is until I came across the following Law Society Gazette article dated June 25th - New-Model Law Firms Face Barriers in the U.S.

On the surface, the article appears to reaffirm the position that the U.S. has some distance to go before the concept of alternative business structures could ever take off over here. However, this is the first occasion of which I am aware that senior figures from within the ABA have publicly acknowledged the concept and its implications on the practice of law here in the U.S.

Tommy Wells, ABA President is quoted as saying that the concept of ABSs raises,

“important regulatory and ethical issues that must be examined and addressed”.

The article goes on to state that if the ABA does not change its stance by the time ABSs are permitted in 2011, U.K. law firms that choose to become ABSs will be barred from practicing in the U.S. From a practical perspective, this stance is clearly operationally unworkable for any of the U.K. magic and silver circle firms, with a U.S. presence, contemplating external investment.

What is perhaps even more illuminating is the public stance displayed by the U.K. Law Society who will “work hard” to persuade the ABA and the U.S. regulatory authorities that ABSs are viable business models. Bob Heslett, Law Society vice-president, said:

“We will work hard to seek to persuade the Americans on this, but we will only be likely to succeed if we can demonstrate that ABSs are just another law firm, subject to the same requirements and regulated by the same regulators as existing law firms, and in particular that client confidentiality is fully preserved and protected.”

My personal belief is that the pace of change within the legal professions on both sides of the Atlantic has picked up dramatically over the course of the last couple of years. The financial crisis is acting as a further catalyst of change across numerous sectors of the profession. Clearly, if one reads between the lines, the U.K. Law Society believes that the ABA position is not a static, immovable one. Although the first step may be a modification of the relevant rules to permit U.K. firms with external investment to practice in the U.S., I predict that it is only a matter of time before external investment in U.S. law firms is also permitted. Once such investment is common place within both the U.K. and U.S. legal professions, this in turn will only spur the growth towards legal outsourcing and alternative and more efficient law firm operating models.

Register for MCLE Ethics Course: "Legal Outsourcing, the Ethical Implications"

2009-06-25T11:16:00.000-07:00

On July 15, at 11:00am PST, I’m hosting an updated version of LawScribe’s MCLE Ethics accredited webinar: Legal Outsourcing, the Ethical Implications.

Only last week the ABA released their Summer issue of The International Lawyer. Offshore Legal Outsourcing was identified as a "hot topic". The International Lawyer comments that 6 Bar Association Opinions have concluded that,

“a lawyer could satisfy her ethical obligations and outsource work offshore."

However, the ABA publication goes on to address four general issues associated with legal outsourcing, namely;

1. duty of care in selection and supervision (which relates to the issue of unauthorized practice)
2. duty to maintain confidentiality
3. duty to avoid conflicts of interest
4. duty to inform the client that the delegating lawyer is outsourcing the work

All the above, and more, will be covered in my webinar.

To reserve your Webinar seat, click here.

The webinar provides attorneys with practical advice relating to the ethical implications of offshore legal outsourcing. The webinar materials have been updated to include a look at the ethical implications associated with a real large-scale document review project. The session also provides analysis of the July and August 2008 USPTO Notice re Foreign Filing Licenses and the ABA Ethics Opinion.

Attorneys from the following States will be entitled to 1 hour of MCLE Ethics credit - CA, NY, CO, FL, MO, TX, WA, WI. For those not able to attend, I will be posting the audio and slides on my blog and the LawScribe website, where the course will be available for self-study.

The following issues will be covered:

• Avoiding the Unauthorized Practice of Law
• U.S. Attorney's Supervisory Responsibilities
• Duty to Act Competently
• Client Confidentiality
• Duty to Disclose
• Conflict of Interest Implications and Risks
• Billing Appropriately for Outsourced Legal Support
• USPTO Notice re Scope of Foreign Filing Licenses
• Large scale offshore document review case study

Joining me on the faculty for the webinar is Spyros James Lazaris, head of Zuber & Taillieu LLP’s patent and trademark prosecution department. Mr. Lazaris will be providing the large scale document review case study. I’ve detailed his biography below.

Mr. Lazaris practices intellectual property litigation and counseling, and is the head of Zuber & Taillieu LLP’s patent and trademark prosecution department. He has extensive experience in all phases of patent infringement litigation. He has successfully drafted and prosecuted patents for Fortune 500 companies in diverse areas of industry and technology, both here in the U.S. and internationally. Mr. Lazaris also focuses his practice on electronic discovery issues, and assists his patent litigation clients in managing discovery obligations in the complex world of electronically-maintained corporate data. Prior to joining Zuber & Taillieu LLP, Mr. Lazaris oversaw the patent prosecution practice of the Los Angeles office of Sidley Austin LLP, one of the 20 largest law firms in the world as ranked by The American Lawyer.

ABA Identifies Offshore Legal Outsourcing and Litigation Funding as "Hot Topics"

2009-06-22T10:11:00.001-07:00

Less than one month ago I wrote a blog piece entitled: Litigation Funding and Legal Outsourcing – A Marriage of Convenience and a Glimpse into the Future. I discussed the rise to prominence of the Litigation Funding industry, during a time when the number of litigations as well as the potential cost of such litigation is rising. The gist of my piece was that by working in tandem, LPO and litigation funding possess synergistic solutions to this dilemma.

This weekend I perused with great interest the Summer issue of the ABA publication the International Lawyer (TIL). The Summer issue always contains a review of significant developments in international law over the past year (the Year-in-Review) and is prepared by the responsible Section committees. Well, in addition to the global implications of the UK’s Legal Services Act (which I have discussed numerous times, specifically in my article The Legal Services Bill and its Impact on the Legal Process Outsourcing Industry), two further subjects were identified as transnational legal practice “Hot Topics”. What might those topics be, I hear you ask?

I quote directly from TIL:

"In addition to the UK Legal Services Act the topics of litigation financing and offshore legal outsourcing were frequent topics of discussion."

The article goes on to discuss the 6 Bar Associations that have released Opinions on the subject of LPO, as well as of course the ABA Opinion from August 2008. The author comments correctly that each opinion concludes that a “lawyer could satisfy her ethical obligations and outsource work offshore." The author does go on to identify four key areas of concern, namely:

1. Duty of Care in Selection in Supervision (which relates to the issue of unauthorized practice)
2. Duty to Maintain Confidentiality
3. Duty to Avoid Conflicts of Interest
4. Duty to Inform the Client

I will be hosting another MCLE Ethics accredited webinar on July 15th. The webinar, “Offshore Legal Outsourcing, the Ethical Implications”, will cover all of the issues raised by the ABA in above referenced International Lawyer Summer edition. If you are interested in signing up for the webinar please email me directly.

LawScribe Proud to Continue ProBono Sponsorship

2009-06-16T16:24:00.000-07:00

With LawScribe being proud sponsors of ProBono Net, Kunoor Chopra and I were delighted to be invited to both Mannatt Phelps & Phillips and Orrick Herrington & Sutcliffes' downtown LA offices on 10th and 11th June respectively, to celebrate the official launch of the SoCal Pro Bono Center.

The center provides a new website that supports pro bono legal services by linking private attorneys, law students and other advocates with legal services providers throughout Southern California. Coordinators of the new venture include the Southern California Pro Bono Managers and Pro Bono Directors at the Alliance for Children's Rights, the Legal Aid Foundation of Los Angeles, the HIV & AIDS Legal Services Alliance, Mental Health Advocacy Services, Inc., Neighborhood Legal Services of Los Angeles County, and Public Counsel. The website is located at http://www.probono.net/ca/socal/.

The SoCal Pro Bono Center is part of the national Pro Bono Net network. Pro Bono Net is a national nonprofit organization dedicated to increasing access to justice through innovative uses of technology and increased volunteer lawyer participation. More than 50,000 lawyers and other advocates are registered members of Pro Bono Net websites.

At LawScribe we are committed to continuing our ongoing support and sponsorship of Probono.net. We have always strived to be at the forefront of innovative initiatives across the LPO industry. Increasing our own involvement within Probono.net, and in turn calling upon other LPOs to do the same is merely an extension of these initiatives. Probono.net announced LawScribe's sponsorship earlier this year with the following linked press release.

"At a time when the need for legal aid is increasing tremendously, we truly appreciate LawScribe's support," said Mark O'Brien, Executive Director of Pro Bono Net. "The commitment of LawScribe and our other sponsors enables Pro Bono Net to continue connecting people in need with free legal assistance, and to develop new programs that allow pro bono and legal aid organizations to respond to emergent needs."

If any of my peers within the industry would like to find out more about how they can support Probono.net feel free to email me.

Managing Partners on Outsourcing, Cost Control, Indian Liberalization, and Law Firms of the Future

2009-06-12T15:06:00.000-07:00

The annual Global Managing Partners Summit in London, chaired by Law Society vice-president Robert Heslett and Law Society Gazette editor Paul Rogerson, revealed a staggering reduction in the demand for legal services among leading US law firms. In the first quarter of this year demand shrank by 6% compared with the first quarter of 2008, while the average hours billed per lawyer fell 8.2%.

Managing partners from the world’s leading law firms were responding to the challenge by embracing outsourcing and cost control. Check out the excellent review of proceedings in the Law Gazette article “Global Managing Partners Summit”.

I’ve highlighted below a handful of the most relevant quotes.

‘I see no reason why fee-earners shouldn’t have a secretary based in India,’ .......‘If it’s not high value, we will move it to another location,’ …….Indian lawyers are often as good as, if not better, than English lawyers.’ David Childs (global managing partner at magic circle firm Clifford Chance).

‘Outsourcing will play an increasing role in removing aspects of front-office, not just back-office, work,’ ........‘Some general counsel at investment banks carry out 80% of their equity research in India. This makes them well aware of the potential for outsourcing legal work.’ Tony Williams, (principal at legal management consultancy Jomati).

Who Said Clients Can Be Demanding?

2009-06-12T14:07:00.000-07:00

I rarely, if ever post "funnies" on this blog, however the video linked here, is well worth a look. I'm sure LawScribe isn't the only outsourcing provider for whom this skit will raise a wry smile.

Quality is Key - the Message at Lexis Legal Outsourcing Event

2009-06-04T09:08:00.000-07:00

Today saw the conclusion of LexisNexis’s two day Delhi LPO conference. The overriding message emanating from some of LPOs most recognized figures was one of quality without compromise. There was broad consensus for a necessity to avoid a race to the bottom in terms of price, at least for any legal task that requires a degree of subjective analytical input. I agree with this wholeheartedly.

There are only two possible scenarios when one hears of document review projects being bid for at $10 per hour. First, as a loss leader, under the forlorn hope that this course of action will build up a client base, and that at an indeterminate point in the future, the price can subsequently be raised to one that leads to profitability. Given both the sophistication and risk aversion of the buyers of legal outsourcing services, I maintain that the likelihood of long term success with this course of action is negligible. Or second, and arguably of more concern for the legal outsourcing industry as a whole, and for the naïve client who signs on the dotted line, that ultimately the client is going to get what they pay for, that is basement quality labor. Although highly automated, document review still requires (and will do in my opinion for the foreseeable future) human beings to perform repeated subjective analysis of key documents. I for one would not want $10 per hour (or less if one assumes some level of margin) reviewers coming within a country mile of reviewing documents in any case that I was a party to.

The argument against commodity pricing is unsustainable though, where through technological advances, systematization and standardization have effectively turned what was previously a bespoke legal service into a task akin to data entry. At the conference I highlighted the example of the UK conveyancing market, once the realm of solicitors, and specifically at the costs generated for handling remortgage work. Over the course of the last 20 years, the fees generated from such work have decreased from circa £1,000 to £30. Clearly here, where the margins are so low, and the volumes so high, every penny saved makes a major difference to the bottom line.

Change Afoot Within India's Law Ministry

2009-05-31T05:15:00.000-07:00

Opinion appears to be divided as to whether the unexpected dropping of H R Bhardwaj, from the post of India’s Law Minister, in Prime Minister Manmohan Singh's new Cabinet, will have a detrimental impact on the pace of liberalization reform for India’s legal profession. In Legally India.com’s coverage, one Delhi lawyer, discussing the likely pace of change had Bhardwaj been invited into the new cabinet, commented:

"If he had come in, we would probably be looking at a December opening."

The dichotomy of views was highlighted by Mulla & Mulla & Blunt & Caroe partner, Shardul Thacker:

"This change will not in any manner hamper the legal liberalization of entry of foreign law firms."

According to Legally India.com, Bhardwaj’s replacement, Veerappa Moily is something of an unknown quantity. With the caveat that I am simply an interested observer, and a million miles away from being an expert on the issue, from a personal perspective, bar the recent passing of the Limited Liability Partnership (LLP) Act, little progress has been made over the course of the last decade. I discuss the LLP Act’s passing in my earlier blog piece, LPO and India News Roundup.

Perhaps a fresh face is just what the doctor (or should I say lawyer?) ordered. Liberalization of India’s legal profession has been tantalizingly just around the corner now for approaching a decade. I first covered the issue in July 2007, in my blog piece Liberalization of India’s legal services market and the impact on the Legal Process Outsourcing Industry. The UK Law Society, however, carried a piece back as far back as 2001 entitled, “India may open the door to foreign practices under licensing agreement”.

Litigation Funding and Legal Outsourcing – A Marriage of Convenience and a Glimpse into the Future

2009-05-26T16:58:00.000-07:00

While reading an article in the U.K. Gazette, entitled "Litigation funding: an overview of a contentious area of growth", I experienced one of those rare revelatory flashes one hopes to encounter regularly but which in reality come along all too rarely.

To set the scene, let us revert for a moment to the recent ValueNotes report, "Legal Services Outsourcing- What do Law Firms Think?", and contemplate both the drivers and the barriers to entry impacting on law firms considering or rejecting legal outsourcing. Despite valiant attempts within the LPO industry to downplay its significance, cost remains the ultimate driving force. While it has become almost de rigueur to ignore the labor arbitrage differential as an attraction, I however embrace this. Simply identifying cost as the clear frontrunner in the driving forces does not equate to a disregard of quality and efficiency as being essential alternate drivers, but rather, to an accurate comprehension of our clients’ and potential clients’ motivations.

In my blog piece discussing the report’s findings, I commented that unsurprisingly data security was rated as the top concern among those that had previously offshored legal work, whereas the perceived lower quality of work was the top rated barrier to entry for those yet to dip their toes in the offshore waters.

What if there was an option that accelerated a potential litigant’s legal representation to embrace cost control, and concurrently shifted at least part of the risk burden associated with the legal outsourcing relationship on to another party’s shoulders?

That option exists in the emerging litigation funding industry. Litigation funding, a private equity and investment industry active already in the UK, is now rising in prominence in the U.S. On June 2nd, RAND Institute for Civil Justice and UCLA School of Law are hosting a conference entitled Third Party Litigation Funding and Claim Transfer at Rand Corporation’s offices in Santa Monica.

Through litigation funding, companies and organizations can seek funding to support their litigation and arbitration claims. If a claim is approved for funding because of its merit and other factors, it receives funding for legal fees and other litigation costs through to resolution and hopefully to recovery. If there is a recovery, the Funder receives out of the proceeds, the money it spent to pursue the case, and in addition, a negotiated share of the proceeds.

Funders offering funds to support claims have widely varying requirements and criteria. Some, for example, generally favor matters where the potential recovery is between about $25 million and $50 million or more, in claimed damages, and expected costs between $3 million and $10 million. Others have much lower thresholds and favored claim/cost zones. Obviously, the specifics vary depending on the case. Historically, according to unverified information in this mostly private industry, Funds have in the past generally approved 1 out of 10 applications. Today, with the surge in litigations and applications for funding, the approval rating could well be lower than before. Of course, at all stages, crucial threshold requirements come into play, including having a strong case in terms of liability, with the potential of significant damages recovery. What is especially significant to the legal outsourcing industry, is that in addition to the importance of these requirements, the level of litigation fees and costs potentially on the line for the Funder is clearly also of central importance.

Let us now turn our focus back for a moment to LPO. According to the 2007 Socha-Gelbmann 5th Annual Electronic Discovery Survey, attorney document review accounts for 24% of entire legal spend. This figure relates to the entire legal spend, not merely the costs associated with litigation. Of course those within the LPO industry have all referenced many times the much vaunted KPMG estimate that first level document review encompasses anywhere between 58% and 90% of total litigation costs.

Specifically pertaining to document review, conservative estimates identify cost savings of 50% achievable through the utilization of offshore legal process outsourcing. If we hypothesize a case with anticipated pre-LPO legal fees in the region of $2 million, and if we base our calculations on the KPMG figures, with LPO, those anticipated legal fees for our hypothesis now come down to $1.1 million to $1.42 million. How many more applications for funding would be approved if the level of fees for which the funder could potentially be on the hook was reduced by such margins?

Now let us return to those main law firm concerns i.e. security and client confidentiality and of course quality of work. Clearly any application for funding requires due diligence and investigation of the suitability of any expert, professional body and of course, if an LPO is involved or recommended, the LPO involved in the incurrence of legal fees and costs. It is not even beyond the realm of possibility that in addition to the extra layer of vetting of the LPO carried out by the Funder, that the same Funder could take on an element of the risk burden associated with the contracting for LPO services. Of course this would likely necessitate recognition of an as yet unidentified uplift in the Claimant’s costs, namely the agreed percentage of the recovery going to the Funder.

So to recap, on the client side there is the ongoing pressure to reduce legal spend; during a time when the number of litigations as well as the potential costs of litigation are rising. Both LPO and litigation funding possess synergistic solutions to this dilemma. In addition, the very existence of LPO as an option can increase the likelihood of a litigation funder to commit to funding a particular matter, whereas the involvement of the funding company might help assuage some of the main barriers to entry into LPO on the part of the client’s outside counsel representation. In an LPO world where innovative and forward thinking providers are continuously striving to identify synergistic partnerships that can provide clients with cost-effective solutions right across the legal vertical, I anticipate that over time we will witness significant collaboration with the Litigation Funding industry.

LPO News and Articles of Interest Roundup

2009-05-19T14:39:00.000-07:00

Lovells are reportedly extending an outsourcing programme for document production work across its London office. The firm is also in the process of piloting the scheme in several international offices. According to Legalweek.com the top 10 City law firm is planning to send document production work from all practice areas to Exigent in Cape Town, following a pilot scheme launched in its London real estate practice last year.

The potential impact of the UK’s Legal Service Act on the structure of the law firm of the future was highlighted in another Legalweek.com piece. The article discusses how external investment will radically alter the traditional operating method for the delivery of legal services. Lyceum Capital have made no secret of their intention to target the legal sector ahead of the Act’s full implementation.

The Daily Telegraph also stirred the hornets nest on this particular issue with their headline piece, “High Street Shops will Sell Legal Services within Two Years.”

Offshoring legal work is clearly flavour of the month at the Legalweek.com reporting desk. The article “Offshoring-outside the box?” provides an eloquent roundup of recent happenings in the UK’s LPO space.

For those readers wanting further information on the upcoming LexisNexis LPO event, being held in Delhi, June 3-4, the updated brochure can be accessed by clicking here.

In last month’s issue of Corporate Secretary magazine, Gwen Moran provides a detailed consideration of the growth of LPO to date in her article “Cutting Legal Down to Size”. Contributors to the article include both myself and John Croft of Integreon.

Finally it’s rare to find a gem of an article dealing with e-discovery, from the UK side of the pond. But in the article Voyage of Discovery, Reza Alexander, Lee Gluyas and Emma Hogwood, of DLA Piper UK, provide a step by step guide to effective e-discovery litigation management and readiness.

ValueNotes Release LPO Report Based on Client Data

2009-05-19T13:39:00.000-07:00

The latest report from ValueNotes makes for interesting reading. This is ValueNotes’ first foray into an LPO report based entirely on data provided by LPO clients and potential clients. Responses were received from 102 law firms (over 80 classified as mid or large size i.e in excess of 300 employees). Less than 3% of those surveyed testified to having utilized offshore legal resources. The naysayers may well reference this 3% figure as evidence that the LPO industry is all smoke and no fire. On the contrary, I prefer to view this as evidence that we are at the tip of the iceberg. The number of LPOs has trebled over the course of the last three years alongside an equivalent increase in revenue. Although market consolidation is surely around the corner, which will inevitably result in a deflation in the number of LPO companies, there is little doubt in my mind of the tremendous potential of this industry. Click here to access the report’s executive summary home page.

Unsurprisingly data security was rated as the top concern among those that had previously offshored legal work, (see my prior blog article “Security and Client Confidentiality the Number One Concern"). The perceived lower quality of work was the top rated barrier to entry for those yet to dip their toes in the offshore waters.

Although clearly of no statistical value, what I found particularly illuminating from a personal perspective were the anonymous quotes from those participating attorneys, belonging to the anti-outsourcing camp. These viewpoints demonstrate the necessity for ongoing LPO education of the US and UK legal professions. Clearly many who object do so based entirely on prejudice and inaccurate hearsay, as opposed to fact based research. A couple of quotes which caught my eye, illustrative of this point, follow:

“If an offshoring program takes you any time at all from a management perspective it doesn’t save you any money.”

And: -

“There is a very real risk of having the service provider sell your information.”

Finally the quote that demonstrated how out of touch many within the legal profession are with their clients:

“If we offshore legal research or contract review, how will our junior associates get trained?”

I remain both transfixed and shocked by this antiquated viewpoint even as I type this piece! In today’s technologically advanced world, what justification is there to immerse young attorneys in the repetitious drudgery of traditional “training work”, AND to bill the client for this? In his book The End of Lawyers? Richard Susskind discusses this very dilemma of how young lawyers of the future are to be trained.

“Using…wide variety of advanced e-learning systems… to simulate a wide variety of legal scenarios and in so doing provide junior lawyers with a safe, well-bounded environment within which to experiment and from which to learn.”

In addition to the above, I would simply add that whether a law firm wishes to embrace advanced e-learning and simulated training techniques is a question for the law firm, and not the paying client. What is clear, is that clients will no longer be prepared to pay firms to train their junior associates on tasks that can either be outsourced or automated or both.

Report From Financial Times LPO Roundtable

2009-05-15T14:38:00.000-07:00

The FT Legal Outsourcing roundtable took place the very same morning that thelawyer.com reported on Simmons and Simmons’ proposed plan to outsource work offshore. The timing could not have been more perfect!

The panel speakers included Nigel Emmerson, Partner, Dickinson Dees LLP, Iain Monaghan, Partner, Pinsent Masons LLP, Bavita Rai, Partner and Head of Litigation Operations, Weightmans LLP and John Croft, President, Global Sales and Marketing, Integreon Managed Solutions, Inc.

Two key points emerged from the discussion. First, where does KPO end and LPO begin? Second, what does the future look like for newly qualified lawyers and young associates and students still at law school in a legal profession being buffeted by the forces of LPO, the Legal Services Act, alternative billing, law firm restructuring, technological advances and globalization.

As to the first point, Wikipedia defines legal outsourcing as

the practice of a law firm or corporation obtaining legal support services from an outside law firm or legal support services company.

The question then becomes one of what are legal support services? Surely if the purchaser of outsourced support is a law firm, but the support services being outsourced are help desk, IT, or HR, this should not come within the LPO definition, rather HRO and ITO. Furthermore the passage of time clearly impacts on the particular bracket into which a service comes. Insurance claims management and large scale conveyancing transactions are routinely processed offshore in their hundreds of thousands. Only fifteen years ago these tasks were considered appropriate for fully qualified solicitors and paralegals. One only has to consider the less than $50 fee now generated for processing a remortgage to fully comprehend the impact of automation and offshoring on a task that was once a regular source of solicitor fee income. The largest players in the outsourced claims management and conveyancing markets define themselves as KPO companies, rather than LPO.

On the second point, the future for the next generation of lawyers, numerous references were made to the recently published End of Lawyers?, by Richard Susskind. There was a growing consensus that the current financial crisis is acting as a catalyst to changes that are long overdue for the legal profession. An associate at an AmLaw 5 firm asked how young lawyers would be trained in the future, if the tasks that were previously utilized for this purpose were either eliminated owing to technological progression or were outsourced offshore? I refer readers to a piece I wrote almost a year ago, Lawyer, Rainmaker, Candlestick Maker, in which I bemoaned the antiquated teaching methods and subject matter covered during the JD and LLB courses on both sides of the Atlantic. I wrote at the time:

I believe firmly that there is insufficient emphasis placed on the development of rainmaking skills within the law degree. In today’s cut and thrust economy, with law firms and corporations starting to tighten their belts, Universities must take an increased level of responsibility in helping mould young attorneys so that they are capable of hitting the ground running on day one with an understanding of the requisite qualities necessary to succeed in the business that is law.

The J.D. adopts the Case (a method of studying landmark cases) and Socratic methods (a method of examining students on the reasoning of the court in the cases studied) as its didactic approach. I am not advocating for one moment the removal of this structured form of tuition, however I question whether it alone, given the market forces discussed above, is sufficient adequately to prepare young lawyers for the real world. It is all well and good being able to regurgitate case law and to construct a written legal argument, but there are people all around the world who can also do this at a much lower cost and to whom we are now easily connected.

Insufficient time is spent on practical client interviews, networking skills, understanding the business of running a law firm, communication and negotiation techniques. Yes, all newly qualified attorneys are aware of the billing requirements soon to be incumbent upon them, but do they understand why these requirements exist? Are any law students able to learn about alternative billing structures, the history of the hourly rate, fixed fees, fee-capping arrangements and how billing accurately and clearly for the provision of legal services can actually be utilized as a marketing tool in attracting clients? Do any Law courses require their students to prove their mettle within a networking situation? Would it be impossible to replicate a networking event or to send students to such events with a variety of goals to be achieved?

As for ongoing training once newly qualified associates join firms, sophisticated clients will no longer be prepared to pay for this. Firms will need to absorb the cost of this training while retaining a profitable bottom line by paying greater attention to cost reduction as opposed to unachievable billing targets.

Lexis LPO Event Gathers Industry Leaders

2009-05-02T10:06:00.000-07:00

The speakers' list for the upcoming Lexis Nexis legal outsourcing conference in Delhi, reads like a who's who of the leading LPO company executives. Five of the top six 2008 Black Book of Outsourcing ranked LPOs are represented. I'm thrilled to have been invited to Chair Day 1 of the conference and to host the Ethics session.

The conference, entitled, Legal Outsourcing Management Strategies 2009, is being held on June 3-4, at Claridges hotel in Delhi. If any readers would like further information on the conference please feel free to contact me directly.

Have Wilson Sonsini Read "The End of Lawyers?"

2009-04-23T16:02:00.000-07:00

I thought I would make an extremely brief observation following my review of today’s legal blog watch and several other postings. Both Richard Susskind’s Harvard address and the Wilson Sonsini “term sheet” announcement appear to have been referenced repeatedly on most legal blogs throughout the course of the day. None of the postings I have read though appear to have linked the two newsworthy items together. Law.com’s legal blog watch even had the Wilson Sonsini piece following immediately after the Susskind review, but failed to comment on the “coming to pass” of one of Professor Susskind’s “predictions”.

Those who have read Richard Susskind’s thought provoking book “The End of Lawyers?”, or listened to the Harvard address will be aware that he repeatedly ponders the legal profession’s journey, and indeed the pace of such a transition, along a continuum, from bespoke legal services to commoditization. He argues that law firms have to date been slow to package their expertise for clients to use for themselves.

Professor Susskind foresees a future where only those firms that proactively innovate along such lines will in the long run be successful. Within the next ten years, the internet will be the first port of call for those seeking out legal advice and assistance. Whether the search and procurement will be through social and/or professional networking, online legal services, auctions, open sourcing, or some other methodology, is yet to be finalized. However, for an upcoming generation who cannot recall life prior to the internet, this will be the standard modus operandi for obtaining legal advice.

I am unaware if the Wilson Sonsini Term Sheet Generator is the first example of its kind, however, I can guarantee it certainly won’t be the last. What surprised me was the lack of any connection made between the Susskind posting on legal blog watch and their subsequent Wilson Sonsini announcement coverage. The Term Sheet Generator is a computerized service that walks users through about 100 questions to create a term sheet outlining the financing terms and conditions of a business agreement or deal. This initially originated as an internal tool for Wilson Sonsini lawyers to rapidly generate draft term sheets, which they would then polish up and then deliver to their clients. I applaud the firm for taking such a proactive approach and reexamining exactly how they deliver value to their clients.

Panel Speakers Confirmed for FT Legal Process Outsourcing Roundtable

2009-04-13T15:55:00.000-07:00

A quick reminder to my readers, that the Financial Times Global Outsourcing and Offshoring Conference is taking place at the Andaz hotel, London, 27-28 April.

The Legal Process Outsourcing roundtable is being held on April 28th. Confirmed panelists include senior figures from leading U.K. and global law firms and LPOs.

Panelists include:

Mark Ross, Vice President of Global Sales and Marketing, LawScribe, Inc.
Nigel Emmerson, Partner, Dickinson Dees LLP
Iain Monaghan, Senior Partner, Pinsent Masons LLP
Bavita Rai, Partner and Head of Litigation Operations, Weightmans LLP
John Croft, President, Global Sales and Marketing, Integreon Managed Solutions, Inc.

The roundtable will provide attendees with practical insight and case studies addressing the substantive concerns surrounding LPO, including selecting which services to outsource, sourcing a service provider, and structuring an LPO outsourcing agreement. Speakers will share their ideas on the dramatic changes taking place in the legal profession, the ethical implications specific to LPO, and the most effective LPO operating strategies before, during and after the implementation process.

If anyone would like further information on the conference or the roundtable feel free to contact me directly.

LPO, a Band Aid or an Innovative Solution?

2009-04-10T10:32:00.000-07:00

The posse list blog reports today on an interview provided by Tess Blair, head of the e-data group at Morgan Lewis discussing LPO in the context of the e-discovery arena. She is quoted as saying:

“We’ve heard; for example, talk over the last several years of off-shoring or legal process outsourcing. That addresses the labor issue. Do we want to pay domestic contract attorneys, or law firm associates versus, perhaps, lower cost legal professionals and others offshore - India, the Philippines, where have you, to do this work? I think that only gets us part of the way there …………….My firm, for one, is moving away from hourly billing. We’re doing all-in pricing for our discovery work so that they get one bill and they’re told upfront what it’s going to be when a discovery project is launched. Those two pieces are much more important than some of these other band-aid type approaches like l.p.o”

According to Blair the real problem is that of volume. If you pay a lower hourly rate, but the size of the document set is still excessive, ultimately the cost sustained will remain significant. She advocates solutions including new technologies, new approaches and a move away from the traditional billable hour. Makes sense, no?

Of course it does. However, to label LPO as solely concerned with exploiting the labor arbitrage benefits, available through leveraging talent in India or the Philippines, is both untrue, and evidence of a lack of recognition of the innovation that LPO has brought to the table.

Blair comments that her own firm is moving away from traditional hourly billing for document review, and providing all in pricing for e-discovery projects. Now I don’t want to be accused of “blowing my own trumpet”, however, having been involved in LPO, long before the acronym itself existed, I reference the opening paragraph of my article, Time to Stop Time Recording, first published over three years ago.

“Clients are demanding greater transparency of charges, pushing law firms to change their old ways and move to fixed fees and offshoring. In the future, the success of your firm will depend on how you embrace new technology and how you approach offshore legal services, shared knowledge and fixed fee charging.”

I’m sorry, but who led the cavalry charge on innovative e-discovery and document review pricing models, from a practical perspective? It was the LPO industry. Well over a year ago, in February 2008, LawScribe launched synerge (a revolutionary, per document, end-to-end e-discovery and document review service). Integreon followed shortly thereafter with their doctane service offering. Pangea3, Mindcrest, Clutch, American Discovery and other leading LPOs all offer per document pricing.

Furthermore the “O” in LPO stands for “outsourcing” not “offshoring”. None of the aforementioned LPOs are restricted to just the Phillipines or India. Whether through wholly owned subsidiaries, dedicated delivery centers, joint ventures, or strategic partnerships, all are capable of providing a “best shore” or “blended shore” solution. Yes, the labor cost in India and the Philippines is lower; however, to intimate that this is all that LPO brings to the table is to be sorely mistaken. Cutting edge technologies, stringent security (above and beyond what is prevalent in the vast majority of domestic based law firms), and innovative solutions including non linear review, multi-shore operations, and fixed pricing, are all commonplace within the leading LPOs.

I am always happy to entertain discussion on the merits of offshore vs onshore, hourly vs fixed price. While I’m delighted that increasingly I am stumbling on articles from progressive figures within the AmLaw 200 corridors of power, discussing alternative fee arrangements, make no mistake about it, LPO opened the door for these firms to walk through.

Future of the Legal Profession: Two Different Points of View

2009-04-06T16:57:00.000-07:00

Interesting to note the disparate views expressed in two articles I read today.

Richard Susskind, leading legal evangelist, prophesier, technology guru, and renowned authority on future trends impacting the legal profession, provided the keynote address at this year’s ABA Techshow in Chicago. Legal Blog watch expertly sums up Professor Susskind’s session and I encourage you to check out Robert Ambrogi’s excellent posting. I will however paraphrase the main points:

• The current economic crisis will fundamentally alter the legal terrain.
• Clients want more for less. i.e. more legal services for less cost.
• Collaborative social networking tools will transform the delivery of legal services.
• Legal services are being commoditized.
• Legal services are being unbundled with constituent tasks outsourced.
• Advances in technology will fundamentally alter the delivery of legal services.
• The delivery of legal services will fundamentally change.

On the other hand, Morrison & Foerster Chairman, Keith Wetmore, clearly does not subscribe to the increasingly prevalent view, that the current economic downturn will leave the world’s top law firms irrevocably changed. The MoFo Chairman is quoted in thelawyer.com as stating that:

“I think it’s wrong to say things have fundamentally changed”

According to the article Mr. Wetmore’s position can be summarized as follows:

• The economy will grow again and when it does clients will need lawyers to advise on that growth.
• The basic law firm model will continue largely unchanged.
• Law firms’ operating models are based on a number of assumptions, one of which is annual attrition at circa 20-23%.
• Current layoffs are a result of a slackening in demand for legal services coupled with a halt in attrition.
• 85% of a law firm’s expenses are salaries and rent.

Mr. Susskind is preaching to the choir as far as I’m concerned. What I find illuminating however, is the faith demonstrated by Mr. Wetmore in the traditional law firm modus operandi. Maintenance of the operational status quo is apparently an option. This is despite 85% of operating expenses being salaries and rent, and a recognition that to function effectively, not only must there be a growing economy, but also ongoing high rates of attrition.

LPO and India News Roundup

2009-04-05T13:55:00.000-07:00

At the excellent Strategic Technology Blog,Ron Friedman references EDD consultant Conrad Jacoby’s proposition that ABA Opinion 08-451 opens up the proverbial hornets nest for BigLaw. Jacoby quite rightly reminds us that the due diligence steps incumbent on US attorneys supervising offshore legal outsourcing, defined within the Opinion, are of course simply a minimum requirement for any legal work which would otherwise be deemed the practice of law, delegated to an underling, whether domestically or offshore. Ron takes this line of thought one step further, and goes on to question whether BigLaw in-house document reviews would actually pass the ABA Opinion’s stipulated due diligence and supervisory standards.

Elsewhere, Lalit Bhasin, the President of the Society of Indian Law firms (aka King Canute), is once again heard taking a swipe at the inevitable liberalization of the Indian legal sector. The Economic Times of India, reports Bhasin as stating:

"The demand for opening legal services sector in India does not come from Indian businesses or professionals or even foreign multinational companies…. the demand comes from foreign lawyers and particularly those from the U.K.. It is obvious that the U.K. is witnessing a negative growth so far as legal profession is concerned. Accordingly, India and China offer good prospects -- but the problem is that, in India, the legal profession is not a business and it is not up for sale."

Stating that the legal profession is not a business, displays a lack of appreciation of the reality of the global profession within which we now all co-exist. The leading UK and US law firms have woken up to this harsh reality over the last 6 months. It is simply impossible to separate the law from the economic forces that impact every other professional services industry. The lack of reciprocity, which Bhasin references, for Indian attorneys wishing to practice within the UK or US, is also a false comparison. This is purely a protectionist stance, nothing more, nothing less. I have always argued for a leveling of the playing field for domestic Indian firms, prior to allowing foreign firms to practice within the country. I blogged about this in January, when I discussed the recently passed LLP Act. I wrote at the time:

“Originally introduced in January 2006, the bill itself will not liberalize the legal services market. However, assuming the necessary secondary regulations are passed, it will enable Indian law firms to form LLPs with no limit on partner numbers and allow foreign firms to form their own India LLPs.”

Now that the playing field, to a large extent has been leveled, it is only a matter of time before the floodgates open and some of the major foreign firms formally set up shop within India’s borders.

Financial Times Global Outsourcing & Offshoring Conference 2009

2009-03-25T15:26:00.000-07:00

I’ll be heading back to the U.K. at the end of April for the 2009 Financial Times Global Outsourcing and Offshoring conference. I attended and spoke at the 2008 event and I have no hesitation whatsoever in recommending the event to potentially interested delegates. The conference is being held at the Andaz Hotel, London, 27-28 April.

The Financial Times 2009 conference - Navigating the Waters: Economic Turmoil, Business Models, Industry Transformation, will draw on the unique strengths and resources of the Financial Times to focus on the vital issues which will influence outsourcing and offshoring decision making in the years ahead.

The conference will feature live, on-stage interviews and presentations from leading FT Journalists and COOs as well as roundtables focused on the transformational power of outsourcing and offshoring for key industry verticals.

On the second day of this year’s conference, Tuesday April 28, I will be hosting the Legal Process Outsourcing roundtable. With the LPO market fast maturing, this roundtable will provide attendees with practical insight and case studies addressing the substantive concerns surrounding LPO, including selecting which services to outsource, sourcing a service provider, and structuring an LPO outsourcing agreement. Speakers will share their ideas on the dramatic changes taking place in the legal profession, the ethical implications specific to LPO, and the most effective LPO operating strategies before, during and after the implementation process.

Key Issues Covered Include:

• Assessing LPO's Role in an Organization's Current Business Needs
• Structuring and Negotiating an LPO Agreement
• How to Successfully Structure and Manage Offshore Document Review
• Measuring ROI of LPO
• Introducing LPO, Firm Wide Buy-in, and Change Management
• Ethical Implications of Outsourcing Legal Work

If any readers require further information about the conference or the LPO roundtable feel free to contact me directly.

Big Law – Reports of Death May be Somewhat Exaggerated

2009-03-22T10:26:00.000-07:00

Over the last couple of weeks the legal blogosphere has been inundated with reports covering the demise of Big Law. The hourly rate is also apparently in its death throws, and soon to be confined to the history books. So, is this pure sensationalism, or is the very survival of Big Law and its conventional, billing modus operandi, in doubt?

The departure, (or I could quote LegalBlog Watch, and refer to this as a “jumping ship”) of two high profile Skadden litigators, to form their own law firm BuckleySandler, has become the cause célèbre of the doom and gloom merchants.

In the same article I reference above, Professsor Larry E. Ribstein, is quoted as saying:

“I don’t know about Skadden in particular, but this move has significant implications for Big Law. As I've been saying, here, the model of law firm as worker coop highly leveraged by the inverted pyramid of associate leverage is doomed. The associates no longer can pay the stars enough to make them stay. When it starts happening even at a firm like Skadden, you know, notwithstanding comforting noises by law firm managers, and deep in your heart, that I'm right.”

The Las Vegas Sun once again revisits the question I raised three years ago in my “Time to Stop Time Recording” and asks whether The Billable Hour has Run its Course? The piece highlights the formation of a new law firm in Chicago, established by three former large-firm lawyers, announcing in January that their business model would depend almost entirely on alternative billing methods for all commercial and civil litigation matters. They also plan to cut costs by outsourcing legal work to offshore firms.

Law school students on both sides of the Atlantic appear to be stuck between a rock and a hard place. I reported recently, with incredulity, that leading London Colleges of Law were increasing the Legal Practice Course tuition fees by an inflation-busting 8 percent in the same week that legal giants Allen and Overy, and Latham and Watkins announced just shy of 700 layoffs. Reports abound discussing the continuing deterioration of job prospects as major firms routinely push back the start dates for new trainees and associates.

Harvard Law School Office of Career Services recently convened a panel to address the concerns of HLS students. According to Professor John C. Coates, a former partner at Wachtell Lipton Rosen & Katz, 70 of the AmLaw top 100 have undertaken some form of labor cost reduction strategy. Coates indicated that the average firm has decided to eliminate about 5% of attorneys, although some have eliminated up to 15%. Click here for the full Harvard Law Journal piece.

Now before we sign off on the AmLaw 100 obituary, lets take a moment for a reality check. I recently went for lunch with the Global Operations Manager of one of the world’s top firms. Although by no means in a state of denial as to the seriousness of the current financial meltdown, I got the distinct impression that he was firmly focused on the opportunities available as a result of the crisis. When I quizzed him about his own firm’s future, the leverage model, partner to associate ratio, outside finance, law firm capitalization, and alternative billing arrangements and of course the firm’s KPO and LPO future plans, his response was clear and concise - nothing was off the agenda.

In many ways this echoes the view of Harvard Professor David Wilkins. He opined that the current crisis comes as a part of a larger historic shift in the structure of legal employment, and that the down economy will provide impetus to more rapidly implement changes to the structure of big law firms which would likely have occurred anyway over the course of time. He also indicated that firms which are currently deleveraging their business model will likely experiment with new, unorthodox strategies like outsourcing and offshoring to keep costs down even after the volume of legal work picks up again.

The financial crisis, although catastrophic, is creating opportunities within Big Law. I truly believe that many major firms have finally woken up and smelled the coffee. Historically these firms were guilty of the charge of being reactive as opposed to proactive. However, what I believe is crucial now is the pace and extent of the reaction. When I hear key decision makers advocating change across an entire spectrum of operational and strategic issues its clear that Big Law are taking the steps necessary not only to survive, but more crucially, thrive, in this brave new world.

Shared Services and Outsourcing Network - The Financial Crisis, 6 Months In

2009-03-13T15:02:00.000-07:00

To commemorate the six-month anniversary (since the collapse of Lehman) of the truly extraordinary events of last September, the Shared Services and Outsourcing Network (SSON) reached out to regular contributors, including me, asking for thoughts on how the crisis and downturn had affected shared services and outsourcing and upon their organizations in particular. Below is my own contribution, as it relates to LPO, in response to the question: What have been the biggest consequences for the shared services and outsourcing space of the economic crisis over the last six months? Click here to read the views of SSON regular contributors including, Anand Ramesh, Research Director, Everest Research Institute, Jean White, Principal, Deloitte Consulting LLP, Thomas Tunstall, Ph.D. Advisory Liaison, ACS.

The financial meltdown has impacted the LPO industry in several ways. First, undoubtedly the overall interest level in how LPO can assist major law firms and legal departments in cost control, is on a major upward trajectory. The pressure imposed on outside counsel by corporate clients in reducing legal costs has been ratcheted up several notches, and put quite simply, outside counsel can no longer bill junior associate rates for certain, commoditized legal functions, and have a realistic hope of retaining their clients.

Second, conversely, some deals within the LPO space that were on the verge of being concluded have been put on hold, due to a sense of paralysis in the decision making corridors of power. Although counter intuitive, outsourcing can be viewed as an expense, and potentially one that can be cut. However the overall impact of the economic crisis, on balance, over the medium term, is a positive one as far as LPO is concerned.

Finally, I have also witnessed an increasing number of U.S. qualified attorneys applying for positions within my own company, and I am aware of this happening at my competitors. Law firms have laid off, and are continuing to lay off, vast numbers of associates and support staff. Many of these individuals are seeking to reinvent themselves within the LPO space, whether that is in a project management or business development role.

Is There a Duty to Propose LPO?

2009-03-04T17:56:00.000-08:00

Taking into account the harsh economic climate, the mood at ACI’s recent LPO summit was relatively upbeat. Having attended several LPO conferences over the last three years, it was particularly refreshing to witness several client case studies from leading firms and corporations, including, Clifford Chance, Baker McKenzie and Accenture.

On day two of the event, Maria McMahon from Baker McKenzie expertly navigated the maze pertaining to a large scale document review project, currently being undertaken offshore. Maria’s final slide contained a table highlighting the benefits of a well managed offshore document review project. She identified the benefits by comparing offshore to a domestic based solution. Her conclusion was that for first pass document review, measured across four metrics, namely, quality, learning curve, productivity and cost, offshore LPO scored extremely favorably on cost, was comparable in terms of productivity and quality, and with a marginally slower learning curve. Ok, hold that thought, and I’ll come back to this in one moment.

In my humble opinion however, clearly the most thought provoking, defining moment, of the conference, came when a question was raised, and a discussion ensued, during the Q&A session that immediately followed the Ethics of Outsourcing panel. The question raised, was whether there is a valid argument, that a U.S. law firm is now compelled, or even under a duty to at the very least inform their clients of the “offshore” option for document review?

Let’s revert back to the Baker McKenzie “experience”, and the conclusions reached, namely, that offshore review is significantly more cost-competitive and also comparable in terms of productivity and quality. If one doesn’t inform a client that conducting first pass document review offshore is an option, how does this sit with one’s ethical obligation set out in the Model Rules of Professional Conduct at Rule 1.5?

(a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses.

Is it reasonable to assume that billing anything approaching AmLaw 200 junior associate hourly rates for first pass document review could be deemed to be “an unreasonable fee”?

While writing this post, I reflect back on the San Diego Bar Association Opinion and a post I wrote in April 2007. I commented at the time that the Opinion discusses the concept of a client’s “reasonable expectation”, as to whether the work would be performed in-house within a law firm, or outsourced. Click here for the full post. Where I felt the San Diego Opinion fell short was in failing to consider that “reasonable expectations” change over time. I commented:

“The Opinion only really considers the here and the now. A client’s “reasonable expectations” are not static, immovable, and unchanging over time. The legal industry now operates in a global marketplace and clients are evermore sophisticated and accepting of the concept of globalization. A client’s reasonable expectations today will be vastly different tomorrow. Soon, a client’s only “reasonable expectation” will be that the quality and confidentiality of the work-product is maintained by whoever completes it, wherever he or she may be. In fact, I would go as far to say that we are not far from the day when a client’s reasonable expectations will be that work-product should be outsourced to the most efficient and cost-effective provider!”

Almost two years have passed since I wrote this piece. Taking into consideration the debate I reference above from the ACI conference, I wonder if we are closer to reaching that “tipping point” day. If one stops for a moment to consider the potential wider reverberations here, the implications for both the legal profession and the growth of LPO are tremendous. I generally don’t formally solicit comment on my blog, but I would be delighted to hear your views on this point.

London's Law Schools Raise Fees

2009-02-28T16:13:00.000-08:00

Every now and then I come across a story within the legal profession, facially unrelated to legal process outsourcing, yet so preposterous, that I feel compelled to draw it to the attention of my readers.

In the same week that legal giants Allen and Overy, and Latham and Watkins announce just shy of 700 layoffs, London’s leading law schools have stunned the legal market by hiking their Legal Practice Course (LPC) fees by an inflation-busting 8 per cent. Check out the following link from thelawyer.com for the full article. For my U.S. readership, who may be unaware of the nuances of the U.K. legal profession’s route to qualification, the LPC is the final year of study required prior to entering the profession as a trainee solicitor.

This marketing master stroke of course comes at a time when job prospects for trainee solicitors and young associates continue to deteriorate. On both sides of the Atlantic major firms are now routinely pushing back the start dates for new trainees and associates.

I believe that this is an incredibly short sighted move and one that will come back to haunt the London law schools in years to come.

Is LPO the Legal Profession's Super Discounter?

2009-02-21T12:27:00.000-08:00

I was listening to a news report on NPR last week commenting that 99 cents stores are experiencing a boom period during the current economic crisis. According to Business Week, as the U.S. faces a serious economic downturn, many Americans are seeking out the cheapest possible option when buying necessities. Enter ultra-discounters like Dollar Tree (DLTR), 99 Cents Only (NDN), and Family Dollar Stores (FDO).

All three retail chains have seen their stock prices surge this year, a rare bright spot in a stock market beaten down by the financial crisis and recession worries.

One can't help draw some comparisons with the continued growth of LPO during these extremely troubling times. Gavin Birer on his slaw.ca blog provides an excellent summary of the cataclysmic changes affecting the legal profession as a whole, while tying in three recent surveys discussing the positive outlook for LPO during this recession.

Now before anyone throws their arms in the air in disgust, the comparison is being made somewhat tongue in cheek, and as I mention below, is clearly not a comparison of apples and apples. However, for as long as large scale document review continues to represent such a huge proportion of the entire U.S. litigation spend, in troubled economic times, it makes perfect sense that this commoditized legal function will be outsourced to lower cost providers.

If one delves into this false comparison however, with any great vigour, it becomes remarkably easy to pull the argument apart. Within retail, the general consuming public accepts that the process delivery method, availability of all the name brands, customer relationship management, and overall facility infrastructure prevelant at the 99 cents stores won't compare favorably to the major retail outlets. The challenge for LPO is to continuously ensure that the highest standards of security and client confidentiality are maintained as well as providing a "work product" that stands up to intense scrutiny from a quality perspective.

Special Offer for American Conference Institute LPO Summit

2009-02-08T12:13:00.000-08:00

American Conference Institute’s (ACI) third LPO Summit is taking place on February 23-24 in New York. The event is aimed at both in-house counsel and law firms who are still evaluating the viability of offshore outsourcing, plus those who already have outsourcing operations in place. Click here for the conference home page.

Legal Process Outsourcing Blog readers can obtain a substantial discount on the conference attendance fee. The blog discount price is $1595. Register via the ACI conference website and use priority code SP2.

Expert speakers include among others: Paul Greenwood, CIO, Clifford Chance LLP., Michael Mensik, Partner, Baker & McKenzie, John Rosenthal, Partner & Chair, E-discovery Group, Winston & Strawn LLP., David Cohen, Senior IPR Litigation Counsel, Nokia. For the full list of conference speakers, click here.

I will be hosting a panel entitled, “An Overview of the Pricing Models for Outsourcing - Examining Market Rates to Secure the Best Deal”.