An Image Problem? Legal Outsourcing

Two recent articles in the legal press continue the on-going discussion around the reality, potential value and inevitable outcomes of law firms outsourcing. The first article looks at the recent acquisition of Pangea3 by Thomson. In it the merits of this acquisition are examined from the perspective of the outsourcers. Naturally they see this type of event as a smart, if not natural, path to take given the growing pressure on the legal industry to establish lower costs and deliver services in an efficient manner. Sounds familiar – typical talking points of other industries that have proceeded to adapt their business models and incorporate outsourcing.

The second article looks specifically at the outcome of an outsourcing deal in the UK. Last year UK firm CMS Cameron McKenna (“Camerons”) announced it had struck a deal with Integreon to replace its entire back office operations. This week we are seeing the outcome of this deal – Camerons has announced that it will be laying off one third of its support staff. Ultimately over 400 business service roles will transfer to the direction of the outsourcer. That is unquestionably a deep impact on this firm’s business operations.

While the debate rages specifically within the US legal market as to the merits and adoption of legal services outsourcing – forward thinking organizations and foreign competitors are simply moving ahead. That said it is no secret in the US that many law firms use legal outsourcers in some capacity – they simply to do publicize or talk about this in public. So perhaps the “debate” is over and now we are just dealing with acknowledgement. Legal outsourcing is here to stay. It is helping to change business models. It can be competitive to law firms while also being a competitive advantage. Why is it such a secret in the US? My answer: Image. Firms want to portray a certain image – that of the traditional white collar trusted advisor firm that conducts legal business (aka Traditional model). Perhaps the smarter image is that of a smart and agile Business which offers legal services (aka Sustainable model).

Note: If you are new to this topic you should check out two books: UNBOUND: How Entrepreneurship is Dramatically Transforming Legal Services Today & The End of Lawyers?: Rethinking the nature of legal services