Slow start for Integreon as offshoring proves less popular

Legal process outsourcer (LPO) Integreon is making a 26 per cent greater loss than anticipated in its Bristol operation, with firms’ reluctance to send work overseas understood to be impacting on its bottom line.

Over the five months from January to May this year the company’s Bristol base is believed to have made a loss of $511,075 (£332,428) against a ­projected loss of $404,906.

The company’s chief operating officer for Europe Chris Bull said Integreon has budgeted to make a loss in Bristol in its first two to three years due to the investment required to get it up and ­running. Integreon opened in Bristol last March when a team from Osborne Clarke, the LPO provider’s first Bristol client, transferred across.

However, it is understood that Integreon’s Fargo, North Dakota onshoring arm, which launched in 2007 and which operates on a ­similar basis to Bristol, is suffering because its clients are ­reluctant to offshore work to overseas jurisdictions, where the margin is significantly higher. It is understood that Integreon pays out around 70-80 per cent of its Fargo revenue in salaries. As detailed on page 4, the ­picture is similar in Bristol.

Osborne Clarke, Integreon’s largest client in Bristol, currently sends 10 per cent of its outsourced work overseas, with the remainder staying in the UK.

Bull said it was “down to the client” to decide how much work to keep onshore and how much to send ­offshore, although the LPO business model is to send as much work as possible ­overseas in a reasonably short timeframe.