UK firms embracing LPO; what are US firms embracing?

In a soon to be published article I authored, I briefly examined the current state of LPO within the UK law firm market and suggested three strategies for addressing LPOs. What I did not discuss was the somewhat self-evident difference between the two legal markets (UK and US) and how each has reacted to the LPO industry.

Just this week it was announced that one of the UK’s most conservative firms Slaughter and May was engaging LPO to shift work away from the firm itself in an effort to control costs for clients. In this specific case it is rumored that it was just one single client that made the request which was the catalyst for this effort. We have seen this client centered effort before with Rio Tinto but this is different in that Slaughter’s client has not yet bypassed them in seeking LPO but requested that the firm determine a course of action.

Slaughter’s move is anything but unique in the UK market. The Lawyer (UK publication) has reported that the likes of Linklaters, Freshfields, and DLA Piper are also currently examining outsourcing options. Further, another UK firm Pinset Masons LLP announced in June that it was adding litigation support and edisclosure (ediscovery) work to its LPO team of 75. Eversheds and Lovells are two more UK firms that have or are about to execute on an LPO strategy. Add to these some longstanding outsourcing platforms such as Clifford Chance’s India operation which has performed some 12000 hours of works for the firm’s clients over the past three years and you have a veritable LPO tidal wave washing over the UK legal markets. It is worth noting that this is not simply for low-level back office work but for actual billable work such as due diligence, document and contract review, compliance, etc.

In preparing that article I was not surprised to find that so few US firms openly embrace the LPO phenomenon but what was shocked that so many US firms are still either openly opposing LPO or worse, simply ignoring it. Now I am not here to advocate for LPO – as I have stated before each firm needs to determine its own strategy for outsourcing – whether to use it or not and to what extent (firm cost savings or client cost savings or both). What I do openly advocate for is that indeed every firm should be aware of the alternatives to their very own services. Blind spots are never wise to embrace or ignore as a strategy. US firms ought to be investigating and examining all angles that their clients could pursue or that they could pursue on client’s behalf to define better practices for achieving legal goals. Perhaps US firms are – if so they are certainly not talking about it. Why? If they are not, no doubt we will not be talking about them in the future – as they may no longer be around.

UK firms in general seem poised to lead in the overall legal industry transformation with such initiatives as the Legal Services Act to fostering groups such as Juridica (a strategic capital group that funds cases) to embracing alternative legal services markets like LPO.

So where is the US legal market leading in change or alternatives?
Joshua Kubicki1 Comment