Crossing the LPO Rubicon

Our report on Slaughter and May setting up a panel of LPO providers seems to be proof that outsourcing is here to stay.

When we originally reported Slaughters’ decision to examine the matter (5 October 2009) it was seen by the market as having enormous symbolic importance. I’ve lost count of the number of comments I’ve had from lawyers citing Slaughters’ move as proof of a reshaped legal landscape.

It’s certainly fascinating that Slaughters is – under some client pressure – considering something that is historically antipathetic to the way it does business. The firm’s willingness to examine
it will gain it brownie points from ­Carillion; if it actually executes some outsourcing, that would be an even bigger story.

That’s a big if. While Slaughters’ move is a ­significant demonstration of how far the concept of outsourcing has become part of the in-house lawyer’s armoury, it still doesn’t have all the answers, much though LPO providers would like you to think it does. LPO providers have been highly skilled at selling their own brand of efficiency. But if law firms devolve responsibility for rethinking their processes to outsiders, they’ve already lost the battle.

While Slaughters is buying time and keeping Carillion happy, Allen & Overy (A&O) is taking a different approach. As we also report today, its new business improvement unit has been given
100 days to come up with some serious proposals to improve efficiency across the firm. There have already been easy wins involving administration, but where things will get interesting is when it recommends disaggregation of the legal process itself.

A&O isn’t terribly sold on the idea of a one-off revolution and all the disruption that entails; it prefers a process of fine-tuning, which has the advantage of acclimatising its own people to ­difficulat ideas. But make no mistake, empowering a group to question received ideas about the way legal services are run has the ­potential to be radical.

As The Lawyer UK 200 Annual Report 2010 explored in depth this year, law firms have made all the big cuts in the name of efficiency. Now they’ve been done, it’s time to get truly creative.