Here at Global Legal I have been preaching about making the right preparations for a successful LPO relationship between clients and vendors, seemingly forever. In an early post (Culling the List of LPO Vendors) I mentioned the Red Bridge Strategy methodology for Evaluating Legal Process Outsourcing (LPO) Providers which includes a step to design an applicable service delivery model. More recently, in commenting on British Telecom’s decision to transition its captive legal services operation to UnitedLex, I noted that transformation and innovation, as opposed to pure labor cost arbitrage, are becoming important factors in deploying legal process outsourcing. I even suggested that interactions between LPO clients and vendors should be relationships instead of transactions (Working with LPO Vendors: Relationship or Transaction?). So, when I read the Integreon press release, I wondered if Microsoft had undertaken a structured approach similar to what I’ve advocated, and how it resulted in outsourcing contracts to Fargo, North Dakota.
With this in mind, I spoke to Lucy Bassli, a Senior Microsoft Attorney involved in the decision, about outsourcing contracts to Fargo. She explained how Microsoft had previously “templatized” the contracts process, documented it, and applied six sigma techniques to make it more efficient and reduce errors. In doing so, Microsoft had reduced the overall level of legal expertise required to manage a large pool of contracts. They then decided they could better utilize their highly capable contracts staff by offloading the simplified work to a vendor. However, even after simplifying the process, they still didn’t just “throw it over the wall.” They decided that it would be less risky to outsource a subset of their vendor contracts (significantly – not their client contracts), and to outsource them to a group that is one time zone away, and has American English (as opposed to British English or Indian English) drafting and communication skills. She allowed that a further move to offshore is possible (a) if outsourcing to Fargo goes well, and (b) if the right offshore circumstances present themselves. Sounds like a thorough and logical process, no?