What’s Going On Here?
Law firms are engaging in legal process outsourcing (LPO) in response to client demands for efficiency and lower costs. Jobs like document review and legal research can be easily sent to other firms, costing less money for the client. But pushing these tasks overseas has raised a tonne of issues. Now, the north of the UK is seeing a huge influx of big city names looking to increase efficiency a little closer to home.
What does this mean?
Previously, law firms of all sizes were globally outsourcing their legal administrative roles to places like South Africa, India and the Philippines where wages were 30-70% lower than the UK. This lead to huge reductions in fees, for both transactional and contentious services, where clients have been demanding reduced costs and increased efficiency for years. But the decline in-house control lead to firms risking their reputation as quality, accuracy, attention to detail and timing where no longer directly theirs to dictate. The solution? Bring LPO home - retake control and open swish new offices in every northern city.
Why should other firms care?
Magic Circle, Silver Circle, US and City firms rely heavily on their branding to obtain, maintain and ideally retain long-standing clients. But that’s no longer enough. Globalisation is increasing competition in an already fierce marketplace. Clients are spoilt for choice and are demanding to see the added value when selecting their lawyers.
International legal process outsourcing seemed the perfect solution for firms wanting to make their fees cheaper. But communication and cultural differences lead to a new kind of inefficiency. Goals were often unachieved because of ineffective governing and lack of understanding. Additionally, confidentiality breaches arose from vague regulation and clients were worried about conflicts of interest arising. Ultimately, the LPO format was causing more problems than solutions.
In response, an increasing number of big city names are rushing to open their own business centres right here in the UK. Addleshaw Goddard has a Leeds based transactional service team, Norton Rose Fulbright created their legal process hub in Newcastle and Reed Smith is opening RS Global solutions in Leeds this summer. Consequently, clients are still receiving cheaper fees and all international problems have been overcome. Other firms, who haven’t already, should consider opening their own centre if they seek to remain competitive.
Ultimately, firms that don’t strengthen their methods of added value will lose out to firms who are investing in line with client demand.
Article written by Emma C.
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