Highlights decision of a large corporation to outsource most of its legal work – p 2138
Sets out concept of service ‘specificity’ – ‘By locating assets on a spectrum between low and high specificity firms can outsource using long-term, near-term, and spot contracting to increase the benefits they can obtain from outsourcing’. If Human capital assets are highly specific to the process and if the procedures to produce the service are very specific then they are unlikely to outsource. Another consideration is the risk of exploitation by the outsource organisation- p2146
List of activities undertaken by large LPO organisations – pages 2150/51
Move to a disaggregated supply chain requires both in depth knowledge of processes and ability to have oversight of these processes – page 2151
Professor Mari Sako – Said Business School, University of Oxford – reports that:
Global corporations currently have a choice of four possible off shoring strategies. A company can set up a captive offshore operation, as GE Plastics has done in India. It can engage a law firm, which in turn sets up a captive offshore operation, as Clifford Chance has done in India. Or it can use a law firm that sources from an independent offshore legal process outsourcing (LPO) provider. Finally, a corporate client can bypass a law firm altogether, and outsource and offshore using a legal services firm, as Rio Tinto has done with CPA Global.
LPO competitive strategies could include:
competing in scale and process, compete by climbing up the value chain, compete in broadening the boundaries of the industry. Each approach has different consequences for law firms. Pages 21-22
Orijit Das, European General Counsel, Genpact – Reports that
As a result of the recession LPO much more widely used. LPO means the practice of a law firm or multi-national corporation obtaining legal support services from either its own captive law department or an external law firm or legal support services company. Page 23
Typical LPO activities are: Creating and maintaining the Intellectual Property portfolio, Patent search and drafting of applications, Legal and market research and opinion pre-work, Document review and analysis, Contracting drafting, review and negotiations (both buy and sell side), Responding to RFPS, which are time intensive and repetitive, Market research and analysis, Litigation document review
Summarises some firm who had already undertaken LPO, or are considering it (page 12). More participants – legal and none legal organisations (page 16 and 18)
Summary of profit per equity partner for the top 100 firms. Highlights reasons for relatively weak performance of the top 11-25 group of firms. Covers chargeable hours, %age of fees generated from overseas work, and use of outsourcing.
Survey of 284 STEP members from across the UK found showed:
– a slim majority thought ABSs will create more awareness and hence more custom for private client practitioners across the price spectrum.
- strongly felt that ABSs will revolutionise the way services are delivered and that a collision of differing cultures
and regulatory regimes will provide challenges.
- the market will polarise between those competing
on price and those offering bespoke services and that clients will be more ready than they have been historically
to move from one service provider to another.
- fewer TEPs would offer will drafting services as a loss-leader.
- Demand for the multi-disciplinary approach will result
in the increased use of outsourcing by firms and that those adopting the multi-disciplinary approach will see increases in efficiency as a result.
- It was agreed that services in the middle end of the market will be dominated by a commoditised
approach, but members were unsure as to whether increasing commoditisation would lead to growth in the private client market as a whole.
- members agreed that the industry was moving towards the
Underwoods prediction that low value high volume services will be outsourced, causing a split market where routine work such as conveyancing, legal aid, and road traffic work would move abroad but niche firms in the UK doing advocacy and specialist work. page 18
covers LPOs in passing, saying some now have turnovers of “billions” (page 4)
CPA Global brochure it supplies both Fortune 100 companies and leading law firms (page 2)
Discusses what is driving demand for LPO – including perceptions of high legal fees, value chain disaggregation. Also covers LPOs competing on scale, moving up the value chain, and bundling of services.
Estimates on future offshoring usage of legal services market (page 4).
Graph provides figures on LPO, but it is uncertain which type of entity they relate to (page 5).