Slaughters sets up panel for outsourced business
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CPA Global and Exigent in the frame as magic circle firm bows to client pressure on fees
William_Underhill
Slaughter and May has drawn up a three-strong panel of legal process outsourcing (LPO) providers it would be willing to work with should clients demand the firm finds ways to do work more cheaply.
The panel is believed to include LPO providers CPA Global and Exigent. The news comes after Slaughters, which is understood to be reluctant to outsource work on a large scale, sent out some data room work following a request from a client, understood to be Carillion (The Lawyer, 5 October 2009).
Corporate finance partner William Underhill, who was involved in setting up the new panel, told The Lawyer: “In the past we have on a couple of occasions used one provider to do data room support on M&A matters and that’s worked. As a result of that we’ve had an internal project to see where we have other process work that could be outsourced.
“We’ve surveyed the market and talked to people about what they can do and we’ve got a shortlist of potential providers.
“There are many professional organisations that have invested money in quality control and they’re all capable of delivering an acceptably good product. The choice over whether we outsource work, and how, would be the result of a discussion with clients.”
Underhill also rejected claims that engaging in outsourcing work might hinder quality control or damage the firm’s elite brand.
“Any risk to our brand may be dealt with if we’re seen to be thoughtful about it, have gone through the process and clients have understood the quality involved,” he commented. “For us this is about helping clients get the right solution. There’ll be a range of solutions in terms of how much they want to be involved with the provider.”
However, one source with knowledge of the arrangement is sceptical as to whether this would result in any work for the shortlisted providers.
“[Slaughters] has absolutely no appetite for it,” the source said. “These guys advised on the financial crisis. They want to be able to say they’re doing something [to offer lower-cost solutions] if someone approaches them. But for super-premium work general counsel don’t care about price.”
Readers' comments (10)
Henry Kissinger | 4-Oct-2010 3:30 pm
I get the feeling this sounds more significant than it will prove to be. As the last comment on the story suggests, it's almost unimaginable that the kind of work that has earned Slaughters the reputation it has will be done by anything other than Slaughters lawyers. The outsourcers would be better off chasing the wholesalers of the legal market, of which there seem to be an increasing number (hello Hogan Lovells!)
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G. Osborne | 4-Oct-2010 3:59 pm
If Slaughter & May don't really want to go down this route, why have they done so much prep on it? Are they just pretending to be reluctant as part of their elite blueblood PR spin?
If the client wants it done Slaughters will have to fall in. Welcome to the 21st century!
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Anonymous | 4-Oct-2010 4:20 pm
I agree that Slaughters has no appetite for it, but I hope that I am wrong. Recently, the magical circle firms announced referral schemes for region law firms, as these firms can do much of the work, to the same standard (although, the magical circle firms like to deny this to justify their ridiculous rates) and economically – but alas it has been all words and little action.
The simple conclusion is that it is generally a sham, it is to give the impression that they are acting to reduce the legal costs for their clients and the Government (who seem to be perfectly happy handing the majority of its work to the magical circle firms, using taxpayers’ money to pay them anywhere between 30% to 60% more than required - while slashing expenditure – which is probably due to the "old boy" network that clearly operates in the sector).
Very little changes in this antiquated sector (dominated by people who should have long since retired), an incompetent and monopolistic regulator compounds the problems.
However, there is light at the end of the tunnel, the advent of ABS structure will, in time, be more of a shock to larger firms than they currently expect.
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Ashley Balls | 4-Oct-2010 10:03 pm
Whether Slaughters have an appetite or not is hardly relevant in an environment where the volume of 'super premium' work is outside all lawyers' control. In a post credit crunch environment it would be a very unusual client indeed (whether in-house consel or not) to enter any fee negotiation without some budget restriction or constraint. The win at any price price mentality has thankfully been relegated to the casino.
Slaughters may be virtually unique in that they rely more on super premium work than most (all?) but transparency is now important too. Surely it is just prudent business practice to seek to control the cost of sales whether you are selling a Mini or a 'Roller'. It would be a surprise if if no LPO panel were in existence. No one, not even Slaughter & May can survive without the application of good management and that is what we are seeing here. Anyone expecting a budget commoditised offering as a consequence is dreaming.
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Anonymous | 5-Oct-2010 9:58 am
Eventually all legal work will be undertaken by the cheapest Indian call centre staff.
Whether people want that or not is irrelevant.
Economics will dictate this will happen.
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Big Dave | 5-Oct-2010 10:47 am
"Eventually all legal work will be undertaken by the cheapest Indian call centre staff."
Relax, it won't happen. As Britain becomes a third-world economy, Indian incomes will surpass ours and there will be no value in outsourcing abroad.
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Vori Gubin | 6-Oct-2010 11:48 am
The indecent haste with which Slaughters is willing to abandon its service standard to pander to a client is astonishing.
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Anonymous | 8-Oct-2010 11:12 pm
@Vori Gubin: Yes, the very idea of a law firm doing what is requested of it by its paying client is absolutely crazy.
What next?
Responding to client's voicemails? Replying to their emails? I shudder to think where such radical thinking will end.
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Brian | 12-Oct-2010 9:46 am
I am a little surprised that the negative comments still feature around a piece on LPO ! Have we not grown up yet ? While I perceive the sarcasm in the previous mail , it does still ring true that the "smaller " firms are caught up in their jealousy for the magic circle rather than taking the incentive and outsourcing themselves. We at TSL consultancy prefer to work with smaller to medium size firms, as the benefits to that practice are transforming. "its like opening a box and having another law firm at your fingertips" is how one client referred to us the other day. I am always met by people who think we are after their jobs, which is further from the truth. We need solicitors or the business model does not work. You are our greatest asset, as we need that lead from your profession. It is a process of upgrading solicitors to senior case managers , but still keeping you involved . You can go and meet with clients and really get to do the specialist things that you are trained to do rather than sitting behind piles of files on a desk.
I urge all practices and in house teams to investigate the great benefits to LPO and how you can transform your practice, even if you are a sole practitioner, to compete directly with larger practices. We believe we are creating a level playing field so look us up on the web and I would be happy to discuss the various ways we can support your firm. www.tslconsultancy.com
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Richard | 4-Nov-2010 6:35 pm
Guys, this basic process driven legal work is most likely being undertaken by highly educated people with degrees. Many will be common law qualified lawyers and in some cases fully qualified English lawyers with an Indian upbringing who have returned home for cultural reasons. In South Africa (Exigent) the situation is similar. In short the satff offshore will be more qualified (or more senior) than the staff who would have done this work on shore, who think the work is beneath them, and who charge more. The snobbery inferred by the comments on this board is misplaced ..............it should be the Indian lawyers who mock the work they are given compared to the talent that they possess. But instead, they take on this simple process driven work with enthusiasm and energy. Be afraid! [I'm not Indian by the way]
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