As an in-houser who is also an LPO enthusiast David Eveleigh, GC at telecoms giant BT Global, is clearly not a man to follow the crowd
If ever there was a champion of legal process outsourcing (LPO) it is surely BT Global general counsel David Eveleigh. He is happy to sing its praises (cheap, efficient, necessary for bulk) without trying to make it sound exciting for the sake of a reporter. Outsourcing is the base of the pyramid, he says in a matter-of-fact manner.
Although Eveleigh and his 300-strong legal team sit at the top of that pyramid doing the most interesting, high-value work themselves, that triangle is no metaphor for hierarchy. Instead, Eveleigh uses it to explain his team’s reliance on the LPO business. It sits at the base, sorting out the high-volume, low-value work that supports those above it.
But what does low-value actually look like? Eveleigh says most of the work passed on to an LPO provider is determined as low-value based on internal measures such as sales order value and contract complexity.
“Some jurisdictions have different drivers in the way low-value work is completed and delivered, but generally there are no objections to judging value this way,” he says. “Part of the process is identifying the tasks undertaken by the legal function to see what could be taken on by the LPO provider. This initial assessment is critical.”
The process of deciding what goes out and when reads like an established – and quite complicated – menu.
“The work primarily originates from English language jurisdictions and each country/market area has a single point of contact who acts as co-ordinator,” Eveleigh says. “Work requests to the LPO are usually instructed by individual BT business or sales managers using an internally developed Microsoft Sharepoint-based ‘front door’ arrangement whereby work can be registered, triaged, allocated and then delivered by the optimal resource, whether LPO or in-house. Work is monitored and reported on by a central BT legal operations manager.”
His enthusiasm for LPO is rare among in-house lawyers, with many too sceptical to send work to third parties.
“There’s a misconception that LPO can be a low-quality body shop, but in my view it’s more of a third limb,” Eveleigh says. “It’s the technology and the process that helps the team internally do more value-added stuff,” he enthuses. “GCs are put off LPO providers because they think the quality might be worse or it means people losing jobs. It doesn’t.”
But old habits die hard, and it may be a while before more lawyers are as enthusiastic on the subject as Eveleigh.
“Lawyers are conservative by nature – we’re inherently risk-adverse,” he says of the industry’s reluctance to use LPO providers. “Lawyers should think of it as a way of making what they do on a daily basis more interesting.”
India and beyond
One area where the industry is seeing growth is India. Indian consultancy ValueNotes expects LPO outfits in the country to make $1.1bn (£690m) in revenue by 2014.
“India has a more mature business process outsourcing (BPO) market as well as strong education and language skills,” Eveleigh says of his decision to move the telecoms giant’s in-house legal team in India to local outsourcing provider UnitedLex two years ago. “We had quite a high turnover of staff [in the in-house team in India] which wasn’t great from a management or financial perspective. UnitedLex India now help us with a range of activities including admin, regulatory and commercial services, basic bid and product work, reviews, and production and the maintenance of management information.”
Although Eveleigh does not have precise figures on how much offshoring has saved BT, he reckons it would cost around five times more if work was done closer to home, adding that it would be significantly more if located in the UK.
But this has not stopped Eveleigh looking for LPO providers in other jurisdictions.
“The Indian market opens up a lot of business in Asia, the UK and the US, but not large chunks of the European market where you generally need to speak German, Spanish or French,” he explains. “We’re looking for onshore providers in Hungary to service European markets, while an opportunity in Spain could service Spanish-speaking countries.”
But not all work can be offshored, Eveleigh continues, adding that his team are piloting an outsourcing programme ‘with a new entrant’ in the UK.
“Work involving the UK Government, for example, needs to be done here,” he explains. “We also have a large customer base in the UK, skills can be slightly greater and there’s no time zone issue.”
It’s clear Eveleigh intends to put his money where his mouth is.
“Our net spend on outsourcing will substantially increase in the next few years,” he confirms, explaining why in the same breath. “Most tasks can be broken down into a mix of outsourcing and not. Perhaps LPO doesn’t suit all companies, but we have significant volume work on the supply and customer sides, and we’re heavily regulated in every area.”
But what about private practice, how can that sector benefit from all this?
“One opportunity is in embracing some of the business and pricing processes you see from the LPO and traditional BPO providers, and another in using the LPO providers for their usage or in combination with other services direct to their customers. Some firms have started to do this.”
The concept is relatively new to BT, too. It was not until 2009 that Eveleigh and his team realised the captive offshore team BT had set up was not working.
“This led us to look at all sourcing options before deciding that outsourcing to an LPO provided the best way of continuing a lower cost resourcing model to supplement and support BT’s in-house legal needs,” he adds. “But it’s not only legal services. General counsel can make a difference by using LPO on a wider level. Look at the Deloittes and the KPMGs of this world – they offer a wide range of services outside of audit. There’s no one-size-fits-all in law, either. Alternative business structures (ABSs) could also open the market for a greater range of services, including more LPO-type services.”
It’s a realistic hope for Eveleigh. The telecoms giant looks set to become one of the ABSs that could benefit from ‘more LPO-type services’ after its claims management arm unveiled plans to convert earlier this year.
Title: General counsel
Reporting to: CEO, BT Global Services and GC, BT Group
Employees: More than 80,000 worldwide
Global legal team: Over 300
Practice areas: IP, litigation, employment, M&A, antitrust, regulatory, commercial, property lawyers