By now, you’ve no doubt read that Thomson Reuters has acquired legal process outsourcing company Pangea3. As other commentators have stated here and here, the acquisition brings credibility to the legal process outsourcing industry and expands Thomson’s workflow and information offerings (e.g. Westlaw). However, instead of simply widening its array of information services, Pangea3 provides Thomson the opportunity to create a legal-centric consulting firm with more similarities to Accenture and IBM Global Services than to LexisNexis. Accenture and IBM both offer global clients a full range of business consulting, technology, and outsourcing services. Thomson now has these overlapping elements with subsidiary Hildebrandt Baker Robbins (legal consulting), divisions providing practice management and operations applications (technology), and Pangea3 (outsourcing). It also has additional consulting and technology legal services that fit into this structure. Read the rest of this entry »
In a recent post (LPO is a Distinct Legal Services Industry – Porter’s Five Forces), I outlined how LPO firms have emerged as a new class of competitors, or partial substitutes, for some services offered by law firms. I agreed with Hildebrandt’s Kristin Stark that many law firms could be providing clients with superior value and service by incorporating lower cost discovery review into their services.
Law firms should consider structuring LPO vendor services into fixed-priced, litigation offerings. Firms should be able to offer lower prices while maintaining profits in return for vetting and managing LPO vendors and providing integrated litigation management. Clients would receive lower, predictable prices and a single point of accountability for litigation matters. LPO vendors would get more business and have the opportunity to work with clients and law firms to continuously improve processes and lower costs for all parties. The two biggest obstacles to law firms incorporating lower cost discovery services are financial and ethical. In this post I will outline a viable financial model, and a subsequent post (The Ethical Challenges for Law Firms to Embrace Alternative Fees & LPO) will highlight some of the significant ethical challenges.
The blog at Hildebrandt Baker Robbins includes an interesting series of posts analyzing the structure of the legal industry using Michael Porter’s Five Competitive Forces that Shape Strategy. In particular, Lisa Rohrer has written Porter’s Threat of Substitutes: Do LPOs Present a Competitive Threat to Law Firms? in which she suggests that because of lawyer licensing restrictions, the threat of substitutes has traditionally been very low in the legal industry. She then asks, “How much of what happens in law firms really falls within the boundaries of the legal ‘profession’?” I think this is a key question, because it highlights the ongoing shifts in the legal industry. Read the rest of this entry »