Slaughters in talks over outsourcing plans
Move hailed as ‘watershed moment’ as LPO trend spreads to City elite
Slaughter and May is eyeing a radical move into legal process outsourcing (LPO), as the UK’s top firms face mounting pressure from clients to embrace alternative models.
Slaughters is in talks with an LPO agency about the prospect of outsourcing low-level legal work, including document review and due diligence. It is understood the move was triggered by a request from a single client.
A growing number of firms are being asked by clients to consider whether certain types of work can be done more cheaply overseas.
The arrival on the scene of ultra-conservative Slaughter and May will surprise many in the LPO market.
Osborne Clarke managing partner Simon Beswick said: “Slaughter and May’s decision to outsource legal work is a watershed moment for the UK legal industry.
“It confirms our belief that the legal market is changing rapidly and demonstrates to clients that market-leading firms are listening to their needs and that they’re willing to innovate.”
It is understood that Slaughters’ plan is at an early stage and relates mainly to data room services.
When contacted by The Lawyer, Linklaters, Freshfields Bruckhaus Deringer and DLA Piper all confirmed they were weighing up outsourcing options, although DLA Piper stressed it was only considering non-legal schemes.
The practice of sending business support functions offshore is widespread, but outsourcing the work of lawyers is a relatively new phenomenon.
A number of LPO specialists have sprung up to meet demand, including Exigent, Integreon and Office Tiger.
Clifford Chance has its own offshore centre in India, which carries out tasks previously handled by UK trainees and paralegals.
Last week it emerged the firm passed 12,000 hours of work to the service centre last year on more than 300 client projects.
Simmons & Simmons is understood to be close to signing a deal with an agency giving the firm access to permanent staff in an offshore unit, after revealing in April that outsourcing was a key component of its new three-year plan.
Readers' comments (14)
Anonymous | 5-Oct-2009 12:52 pm
The 'daddy' may have moved - but on this one, it will move very, very slowly indeed.
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mary | 5-Oct-2009 2:16 pm
This makes perfect sense and I reckon once they've done it for this one client they'll end up doing it for many clients then all clients. That's what Lovells did.....
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Anonymous | 5-Oct-2009 3:20 pm
Am I missing something? Isn't it cheaper to hire in a bunch of paralegals when needed?
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IHateBPP | 5-Oct-2009 4:30 pm
UK paralegals would want UK wages (and possibly a training contract), which are much higher than what Indian staff are willing to work for.
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Anonymous | 5-Oct-2009 7:33 pm
what does this mean for trainees and junior lawyers in the future? what work are they going to cut their teeth on if the traditional fayre of data rooms, contract reviews and due diligence reports is farmed out abroad? This also suggests a shift to a structure which is senior lawyer "top heavy". Interesting if you're already senior, worrying if you're not.
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Britomart | 6-Oct-2009 9:02 am
Yes, but that brings us back to the same old question: how do you ensure quality of production when you outsource a job? I've met a number of Slaughter &May lawyers over the years and I can't believe they would be overjoyed about this move. Reckon this client must have held a gun to their heads!
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Anonymous | 6-Oct-2009 10:50 am
This is all about driving client value. Law firms need to take the intiative to remove costs from their own delivery models. Large corporate's are used to utilising outsourcing for many critical business functions, in times when costs are scrutinized corparates will demand the same level of cost consciousness from their law firms. Ultimately Law Firms should view this as a competitive advantage.
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Anonymous | 6-Oct-2009 11:17 am
oh dear.....uk law firms are in troubles.....ehehehe
this is the consequnce of the "billable hours system" !
solution? just ask less money, keep the work (and the associates) and buy a less expensive house!
But partners don't listen and don't give up their very expensive hours doing nothing!
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Anonymous | 6-Oct-2009 5:38 pm
Having worked at Slaughters, I cannot believe that anything other than basic admin is being outsourced. If the firm, is, indeed, outsourcing proper legal work to India, then the four horsemen of the apocalypse are about to appear on the horizon.
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Anonymous | 6-Oct-2009 7:15 pm
..... not a surprise that there is movement up the value chain in terms of out sourcing legal work. Law firms need to drive down costs, become more efficient if they are to remain competitive
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Anonymous | 7-Oct-2009 8:06 am
This is a big step up for Legal process outsourcing companies. At the same time data security should be given prime focus here, as Uk legal system is very stringent about it and the firms have been reluctant to outsource legal work even when the LPO industry was at its peak for this very same reason reason.
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Anonymous | 9-Oct-2009 2:07 am
Uh oh. I used to work for a firm that outsources their dictation to India. It may have saved the firm money but for the fee earners meant long non-billable hours spent correcting basic spelling and grammar errors on returned documents. It'll end in tears (or should I say, "it,l ending tiers")...
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Andrew | 14-Oct-2009 4:30 am
Re: "how do you ensure quality of production when you outsource a job?"
Answer: 1. document the process; 2. ensure it's consistent and replicable; and 3. automate it.
High priced lawyers shouldn't be doing standard process work. They should be providing advice on complex issues.
Andrew Davis
www.exari.com
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Fred Krebs | 15-Oct-2009 10:14 am
The law firm business model must change. Firms that fail to adapt will have great difficulty. Clients want value--firm goal should be effectiveness, efficiency and client satisfaction. High cost for low value work not the way to achieve that goal.
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