Pangea3’s recent opening of a delivery center in Carrollton, TX, near Dallas, highlights the speed with which the legal process outsourcing (LPO) industry is incorporating the general evolution of the BPO industry. Initially, offshoring was exclusively to low cost countries to take advantage of labor arbitrage, and thereby, lower the overall costs of business processes. Since then, offshorers, both outsourcers and companies with captive centers, have begun implementing portfolios of offshoring locations using the so-called “hub and spoke” system. “Hubs” of offshore work are generally located in scalable countries, like India and the Philippines, where there large numbers of low cost, skilled workers. “Spokes” tend to be smaller centers that are used to meet particular skill, geographic, or regulatory needs. Examples of spokes include the use of medium cost locations like Poland for European language skills or the location of a data center that can meet particular E.U. regulations; and Israel to get medium cost yet highly sophisticated legal skills. (Sales offices, even when they house a few delivery people are not considered “centers,” and therefore not included in this analysis.) Read the rest of this entry »
A recent ComputerWorld article about European Union data privacy safe harbor abuses (hat tip to JFehrman) made me wonder about their potential effect on the LPO industry. To help explain the EU data privacy regime, I spoke with a publicity-shy LPO industry colleague who is a cross-border data management expert. (Though he prefers not to be identified, I still wish to publicly thank him here – you know who you are!)
In managing for efficiency, managers often refer to the intersecting elements of people, process, and technology. Legal Process Outsourcing (LPO) industry participants initially focused on reducing people costs by moving work to lower labor cost jurisdictions like India. For most, it quickly became apparent that coordinating onshore and offshore labor to deliver consistent, measurable results would also require the development of consistent, coordinated processes. However, their approaches to technology are among their most significant differences from each other. Some industry participants have invested in the development of industry-specific technologies that allow them to tightly integrate their people, processes, and technologies. Others have adopted technologies on a project basis to provide the best fit for each client, while still others have adopted a combination of these approaches. There are pros and cons to these approaches, and potential clients should fully consider them when selecting an LPO provider. Read the rest of this entry »
Global Legal recently spoke to Tony Wright, Cameron McKenna’s Director of Operations, about its decision to outsource its middle office services to Integreon. In the second of this two-part post, Tony talks about the risks and benefits of the deal, the decision to choose Integreon over larger BPO vendors, and the budding interest of other large law firms in this type of arrangement.
If you missed part 1, you can find it at CMS Cameron McKenna’s Tony Wright Outlines Middle Office Outsourcing Efforts (Part 1).
As readers of Global Legal are undoubtedly aware, last month UK-based law firm CMS Cameron McKenna LLP (“CMcK “) announced a 10 year, £583M arrangement with Integreon to outsource its middle office services. In contrast to US-based WilmerHale’s recent initiative to move support services to a wholly-owned subsidiary in Dayton, Ohio, the CMcK-Integreon deal moves operations to a global legal services provider. Interestingly, both firms have been silent on legal process outsourcing. We at Global Legal were curious about how CMcK made its selection, and recently asked Tony Wright, Cameron McKenna’s Director of Operations, about their decision process. In the first of this two-part post, Tony talks about CMcK’s decision process, including who was involved, what criteria were used, and how long it took. Tony’s responses to my questions are below.
Last week (May 18th to 20th) Red Bridge Strategy conducted the 2010 Global Legal Process Management Boot Camp in Mumbai & Delhi, India. Participants received not only a comprehensive overview of the industry and some of its key players, but also firsthand experience with the infrastructure and environment in which LPO vendors operate.
- Ethical Considerations in Legal Outsourcing
- Who are the LPO Employees (& Why is That Important)?
- Legal Project Management & Supervision
- Working with Indian Teams: Differences & Similarities
- Mechanics: The Process of Legal Outsourcing
- Security & Privacy for Legal Outsourcing
In addition, Shrihari Gokhale, President of Fiserv Global Services shared his insights into the differences and similarities when working with Indian, American, and mixed teams, and Matthew Sullivan, leader of Red Bridge Strategy’s Global Legal Process Management Practice, outlined the Red Bridge Strategy methodology for evaluating and implementing global legal processes. Neeraja Kandala, ValueNotes’ lead analyst for the LPO industry, provided a frank assessment of the industry and its future.
According to one participant, the event was “a valuable insight into the industry and its participants, and well worth the trip!”
Thanks to all presenters and participants!
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. Read the rest of this entry »