Rio Tinto Outsourcing Deal is Already Producing Savings

July 27, 2009

I previously reported on the outsourcing deal struck between Rio Tinto (one of the largest mining companies in the world), and CPA Global.   While many in the LPO industry are eager to hear about Rio Tinto’s experience, that will obviously need to happen over time.  But a post in the AmLaw Daily today already points to some early positive signs.

According to the post, Leah Cooper, the Managing Attorney at Rio who was the driving force behind the deal, had originally hoped that outsourcing to India would be a way to free up internal resources in her law department.  But as she has already seen, it is a way to cut down on outside counsel fees.

In a large document review project in a case involving the FTC, Cooper says tha she saved $1.5 million on outside counsel fees.  Overall, Cooper estimates that her staff in India can get the work done at one-third of the cost of her in-house staff and at one-seventh the cost of outside counsel.

Pros and Cons of Virtual Teams

July 21, 2009

Outsourcing is a way of setting up virtual teams that might function in a lower cost jurisdiction.  Here are some of the other pros and cons of setting up virtual teams (from an article published in the MIT Sloan Mgt. Rev. and cited by blogger Rees Morrison.)

Offshoring and Ethics

July 20, 2009

The unauthorized practice of law, the duty to provide competent legal counsel and properly supervise the work done by domestic and offshore contract attorneys or attorneys outside of the U.S., avoiding conflicts of interest, preserving client confidences, billing clients appropriately, steering around export controls–these are all issues discussed in a great webinar on the ethical issues raised by legal process outsourcing.  Mark Ross of Law-Scribe has done a number of these.  This is one of his best and worth a listen if you are interested in getting up to speed on the issues.

Is IP Trending Away From Biglaw?

July 20, 2009

foot_doorFor the past few years, there have been signs that certain practice areas are migrating away from large law firms.  Twenty years ago, large law firms were pitching one stop shopping.  But as times changed, certain practice groups found it increasingly difficult to keep up with increased billing rates.   For example, while many of the larger law firms developed substantial employment law and trusts and estates practices during the 1980’s, since the mid-1990’s, there has been an exodus of these practice groups to smaller and more regional law firms.

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Free Webinar on LPO Basics

July 20, 2009

Offered by Red Bridge Strategy.  The presenter, Matthew Sullivan, consults with law firms and corporations on how to work effectively with LPOs.

For a quick overview of LPO, see also an article I published in April.

Offering an Offshoring Option=Marketing Opportunity

July 16, 2009

There is some evidence that law firms have been adopting legal outsourcing at a slower pace than their own corporate clients.  There are a variety of reasons for this;  most obviously, lawyers are not eager to send billable work to another provider, even if the client will save money.   As one partner articulated to me in a recent meeting, sending even commodity work to an offshore vendor is a win, win, lose proposition for a law firm (where the corporate client saves on legal fees, the vendor generates the fees the law firm used to generate  and the law firm loses revenues but retains the risk associated with the engagement).

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In-house/Outside Communication

July 15, 2009

There are several interesting articles on the “in-house counsel/outside law firm” relationship in the latest newsletter of legal consulting firm Altman Weil (here and here.)  Both consultants talk about ways for in-house counsel to achieve cost reduction by demanding it from outside counsel.  They also offer some practical tips about how in-house counsel speak with about the subject with their outside providers. Read the rest of this entry »

Americans Need Apply

July 13, 2009

While the Great Recession continues to send more U.S. lawyers packing, the job market in India offers some opportunities.   As the LPO industry expands in India, the need for U.S. trained lawyers (who are able to manage and train Indian lawyers in some of the nuances of American practice and American lingo) is growing.

Are U.K. Firms Adopting LPO More Quickly than U.S. Firms?

July 13, 2009

An article in the London Evening Standard suggests that many Magic Circle firms have already sent legal work to India and South Africa (e.g. Allen & Overy, Clifford Chance, Eversheds, Lovells and Simmons & Simmons.)  The article reports that 1000 more legal jobs may be sent to India by the end of the year.

While the article does not provide a lot of concrete evidence that this is actually occurring (it mainly quotes various individuals in the legal and LPO industries), I am left with the impression that the U.K. is taking more quickly to outsourcing legal work to India.  I cannot recall seeing an article which lists as many American law firms adopting the practice.

If it is really the case that U.K. firms are taking more quickly to offshoring legal work, perhaps this is because of the strong colonial history between England and India.  There is a large population of Indian immigrants in the U.K., particularly in London,  and I suspect that your average English solicitor or barrister has more contact with professional Indians than you average American lawyer.

The Cloud Provides More Data Security

July 10, 2009

Clouds_320I can’t fault lawyers for worrying about data security.  Maintaining client confidences is not only a business necessity, it is an ethical imperative for attorneys.  But I still scratch my head when I talk to lawyers about offshoring IP work and they raise concerns about preserving confidentiality.  “How do I know my clients’ confidential information will be protected?”

As a matter of routine business practice, large multinationals have been sending sensitive information overseas for years.  Any company that has chosen to outsource back office functions to India, the Philippines or China understands that data must be encrpted and that vendors need to be properly screened for compliance with appropriate security procedures. Read the rest of this entry »