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Slow start for Integreon as offshoring proves less popular

Depending on what you are reading and who you are talking to it can be unclear whether or not legal process outsourcing is making true headway in the legal industry. A report on some sites surfaced this week which discuss apparent reluctance to sending even simpler legal tasks offshore. The Lawyer reported how Integreon’s operations both in Fargo and in Bristol was cost prohibitive to the firm’s operations since clients do not prefer the LPO to send any work overseas. It’s quite interesting that the LPO’s clients, who give their business to Integreon, want the provider to perform work onshore rather than reap benefits of the lower cost offshore model which they signed on to profit from in the first place. Is this a trend in legal process outsourcing which has been largely synonymous with transmitting work overseas to the lower cost centers in India, Philippines and beyond? Or rather, does this story reflect the eve of an inflection point that will breed LPO differentiation to new service delivery models moving forward? The reason for the differentiation question lies in the case seen in the Integreon story. Providers will adjust and offer service as dictated by their clients – when it makes sense. It’s a fact of doing business. Otherwise turning your back on clients doesn’t bode well for your future business, and in turn helps your competitors who adjust and offer accordingly. But does this story actually make sense – to essentially abandon the offshore model which is the foundation for the cost savings and is at the heart of the law firm attraction to LPO? Onshore arms do make sense to the LPO model if the delivery model finds a way for it to make it economically viable. Paying up to 90% of revenues to onshore salaries does not, but it could if fees could be raised to justify the overall service being provided. Or perhaps volumes will allow them to achieve economies of scale thus pushing them into the black. But this does call for another look at the overall legal outsourcing value proposition.

21-Sep-2010

0:15 am