Eversheds covets commoditised market with South Africa pilot
14 January 2010 | By Luke McLeod-Roberts
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Eversheds has begun sending low-level legal work to its South African office as it plans to step up its involvement in the commoditised market.
The firm has sent lease renewal work previously carried out by its Cardiff office to Johannesburg and is currently training two South African lawyers in Wales. This is part of a pilot, which - if deemed successful - will see Eversheds launch a joint venture with its South African office carrying out legal process work previously done in the UK within six months.
Anthony Davies, a litigation partner in Eversheds’ commoditised arm the Legal Systems Group (LSG), said: “The transactions will be shared between the offices. Drafting will take place in Johannesburg and the client-facing aspect and negotiation in Cardiff. Everything would be checked in the UK by teams. Other areas that would be appropriate to send are contract review and due diligence - it depends on what we’re trying to secure. This is really about winning new work.”
Davies said that no decision has been taken yet on the branding of the joint venture, but as it might see Eversheds offering the service to other law firms it could operate under more than one brand.
Head of the LSG Graham Richardson will lead the initiative, with Davies managing litigation work and real estate partner Helen Thomas the lease renewal work.
Davies confirmed that the South African joint venture would not “have any impact on jobs in the UK”. He added: “LSG has been recruiting massively. We’re looking to take advantage of market conditions to win new work.”
But the reaction from the market was mixed. Quentin Poole, senior partner at Wragge & Co, which sources the majority of its work from London and the South East, but carries out the largest chunk in its cheaper Birmingham office, said: “I think it’s a very interesting move and clearly there’s a lot of talk in the market about doing commoditised work cost-effectively. But if you make a push into this area and build a reputation as a firm that’s famous for relatively low value commoditised work there’s a risk that this could shift your brand away from the quality end of your practice. So it’s a difficult tightrope to tread.”
But Nigel Kissack, dispute resolution head at Pinsent Masons, which became the first law firm to outsource legal work offshore through an agreement with Exigent in Cape Town said: “”We’re not like Eversheds in that we don’t have a commoditised or volume aspect to our business - and don’t intend on doing so - but I can see it makes sense to send that to South Africa. With good quality control they’ll make a better margin on it down there and clients should benefit.”
Davies argued that the drive into commoditised work would not undermine the firm’s brand. “Our experience to date is that they do complement each other. Clients are sophisticated enough to understand that Eversheds does both [strategic and commoditised work]. By doing work across the board we understand the business much better than a business that only does London work.”
Eversheds currently sends bulk repossession work on behalf of GE and volume conveyancing work for Aviva to business process outsourcing (BPO) company Williams Lea in India. Exigent carries out BPO document production work for Eversheds itself.
But Davies said that its own move into the LPO sector would not pose a threat to these entities. “South Africa is not about displacing the relationship with Indian LPOs we work with - there’s always a place for them,” he said. “I don’t think there are any plans to bring document process or BPO to the South African office.”