The need for human input in categorizing and in sorting through a mountain of electronic data in IP litigation, is pushing corporate counsel and law firms to consider off shore outsourcing.
For 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.
Recently, I posted on the need for lawyers to think like attorneys but bill like consultants. The Great Recession has increased the pressure on law firms to come up with more predictable ways to bill and the consulting industry provides a good model.
The tie in with this blog is that many LPOs are able to offer fixed fees for certain services and this in turn can help law firms to get a better handle on what to charge (other than simply setting an hourly rate). That is why I continue to write about alternative billing in this space.
IPEngine, the sponsor of this blog, offers one example. In working with law firm and corporate clients, IPEngine develops an understanding of client expectations. IPEngine will then quote a client on a project basis (e.g. by the patent, by the prior art search, by the office action, by the freedom to operate study, etc.) and over time, the price for future projects will be adjusted based on actual experience with the client.
While the whole idea of project billing may seem mysterious to most lawyers (many will assert that law is different and that the practice of law is too unpredictable and too idiosyncratic to reduce to flat fees) a recent experience I had with a home contractor highlighted for me that the legal industry really has it wrong.
An interesting analysis of recent ValueNotes research appears on Integreon’s blog.
Back in May, ValueNotes issued a report which concluded that LPO penetration had been relatively weak at law firms (only 3% of the surveyed firms had worked with an LPO.) ValueNotes is one of the few companies that has conducted research on the LPO industry. While Integreon suggests that this can be explained by factors other than a wholesale rejection of the concept (LPO is a nascent industry and lawyers are very slow to change), the post suggests that under-reporting may be at play. In short, individual lawyers may not be aware of what is happening at their firms. Read the rest of this entry »
As part of the movement towards increasing efficiency and controlling outside legal expenses, more corporate law departments are adopting a Six Sigma approach. Simply defined, Six Sigma is a method of improving processes (or in plain English, it represents a commitment to continuing to find ways to do things better). Read the rest of this entry »
For over a decade, IT work has been migrating around the globe to lower cost jurisdictions. While there have been some bumps in the IT outsourcing road (e.g. call centers in distant parts of the globe have created angry customers who have difficulty understanding the reps), for the most part, outsourcing in IT is now part of the business strategy of most large organizations.
The internet has truly flattened the world for knowledge workers and other professional services have begun to migrate across the globe as well. But the legal industry has been slow to adopt these changes. Lawyers are cautious by nature and while there has been talk for years in corporate circles about finding ways to control legal expenses, until The Great Recession, it was hard to get large firms in particular, to pay attention. That has all changed. Read the rest of this entry »
That according to Boston lawyer Jay Shepherd. You can rely less on outside counsel, use “lower quality” firms or work out fixed fee arrangements. But what about outsourcing some aspects of your work? Isn’t that choice number 4? Outsourcing overseas can lower costs by bringing in talent that is highly skilled but willing to work for a lower wage. That’s the resource that IPEngine brings to the table (i.e. highly credentialed engineers and scientists who command significantly lower compensation because they live in India). It is the solution offered by other LPO’s as well.