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This was the week the wheels appeared to start falling off the outsourcing cart.
As we exclusively report today, CMS Cameron McKenna has confirmed it is moving part of its monumental £600m outsourcing contract away from the big beast of the jungle, Integreon.
This follows Monday’s news that Osborne Clarke is also set to scale back its use of Integreon by transferring most of its support services back into the firm while it has also emerged that TLT ended a back office deal with the outsourcing provider last year.
It’s unlikely too many tears will be shed by support staff across the UK legal market if the limits of the outsourcing trend are starting to be exposed. The shake-up is unlikely to be going down too well at Integreon either, although it’s putting a brave face on the changes at Camerons in particular, pointing out that it is “leading the sourcing project to find the firm a facilities provider”.
Integreon does indeed continue to work with both Camerons and Osborne Clarke while sources suggest it now has around 30 law firm relationships of varying sizes. But this week’s news underlines the fact that there are limits to outsourcing. Catrin Griffith’s feature on LPO warned last year of the limits to the LPO market, pointing out that many clients aren’t sold on the idea
In a timely opinion article, Andrew Hedley of Hedley Consulting warns that firms could lose their competitive advantage if they’re not careful when outsourcing.
Meanwhile check out our recent facilities management peer panel, in which Reed Smith’s EME operations director Phil Page argues, presciently, “There are signs the total outsourced solution isn’t delivering the service improvements or cost savings that were expected and there has not been a rush to follow suit”.
If anything has the ring of a warning bell for businesses like Integreon, that has.