American Lawyer Conference on Legal Outsourcing

What did we learn from American Lawyer’s first ever conference on Legal Outsourcing for both Work Product and Support Services held in New York on Thursday 23rd May? The panels of distinguished speakers included representatives from the leading LPO providers, corporations involved in legal outsourcing, and of course several highly respected individuals from some of the world’s leading law firms. For a detailed session by session analysis of the subject matter of discussion I would strongly recommend that you take a look at Ron Friedman’s blog. Ron was there, in the front row, ensuring that there was a live commentary on his blog of the day’s events.

Among the various discussions were subject matters including the ethical issues involved with the outsourcing of legal work, the future of legal outsourcing, the measurement of outsourcing return on investment and my own presentation on increasing profitability through legal offshore outsourcing (which was unfortunately cut short due to the late service of lunch!).

I wanted to comment briefly on perhaps the most thought provoking panel of the day, the final “graveyard shift” session, which included Peter Pantaleo, a Partner at DLA Piper’s New York office, and Bradford Hildebrandt, Chairman and Founder of Hildebrandt International. Considering the time slot allocated for this panel discussion it managed to have all in the audience on the edge of their seats. Both of these gentlemen appeared at first glance to throw a “spanner in the works” in relation to the message that had been resounding out throughout the rest of the day that the proliferation and the extent of legal outsourcing was only going to increase drastically in the coming months and years. I say at first glance purely because on closer examination of exactly what both of these two esteemed speakers actually said, I noted that there was virtually no difference between their message and that presented by outsourcing advocates. It was acknowledged by both speakers that corporate legal departments are going to continue to explore offshoring of a wide variety of legal services, and that all law firms, large and small, will explore reducing the expenses of back office legal support through offshoring. They further agreed that tasks such as large-scale document review projects and coding and indexing within the AM Law Top 100 firms would also continue to be outsourced.

Peter Pantaleo made an interesting observation when he commented that law firms do not think that outsourcing their primary way of making a living is a good idea. My only point in disagreement is that ultimately whether or not the law firm thinks it is a good idea is irrelevant; it is the clients’ opinion that matters. Even I do not anticipate that in the very near future we will see the outsourcing of core, high-value legal work, including complex document preparation, client-attorney contact, advocacy, and negotiation. I believe that the market is only just now beginning to embrace the outsourcing of legal support services and lower to mid-level legal work. But the one thing that I have learned since my love affair with offshoring and outsourcing began is that you should “never say never”.

With advances in technology coupled with the instigation of an accreditation process to improve the standards and increase the capabilities of offshore attorneys, a significant proportion of legal work will be outsourced within the next 5 years. This will include basic level legal research, document drafting and preparation, coding and indexing, document review, insurance company legal claims management and data entry, the entire UK low value personal injury claims process, and the UK Conveyancing (real estate) process. This is more than enough to start with. When this becomes the norm, and it will, can anyone say hand on heart that firms won’t start to explore extending the boundaries and moving into higher value legal work?

I suspect that there was an element of bluffing taking place in that final session, reminding me of high-stakes poker players simply refusing to reveal their full hands. It certainly made for a lively finish to an enthralling day and I look forward eagerly to next year’s event.

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It's Time for Regulation & Accreditation of Legal Process Outsourcing Companies

I believe that a formal regulation of the legal process outsourcing industry together with the introduction of an industry wide education and accreditation program for Offshore Attorneys working within Legal Process Outsourcing companies is essential if we are to inspire confidence in our clients and ensure a service of the highest standard.

I returned yesterday, a little worn and weary from the Association of Legal Administrators conference in Las Vegas with a desperate urge to put pen to paper. I was remarkably refreshed by the opinions of the overwhelming majority of the Chief Operating Officers, Office Administrators and Directors of Procurement whom I spoke to and who attended my presentation on Legal Process Offshoring. Several of those I met had valid concerns regarding the ethical issues of the offshoring process, namely confidentiality and the unauthorized practice of law. Some others raised the issue of quality control by expressing reservations over whether non US qualified attorneys could possess the requisite knowledge to work on US related legal matters. Most, however, agreed that now was the time to convince their managing partners to finally consider legal offshoring as a viable strategic alternative.

I attempted to dispel the above myths in my presentation. I explained the exhaustive safeguards that a reputable Legal Process Offshoring company (LPO) such as LawScribe has in place to ensure that client confidentiality remains of the utmost importance. I also described in detail the recruitment process, training programs, and educational qualifications required of Indian attorneys by established LPOs.

My only fear is that if we don’t start regulating our profession now then the continuously emerging “black sheep” will cause our clients to eventually lose confidence in the whole industry. New companies without any real US or UK physical presence or genuine legal background and qualifications are springing up all the time. Many are simply jumping on the legal outsourcing bandwagon, seeing it as the latest get rich quick scheme. For example, I recall recently outsourcing an element of LawScribe’s marketing to a company whose name I won’t divulge. This particular company had a wealth of experience marketing in the American legal industry, but was totally new to the concept of Legal Process Outsourcing and Offshoring. Several weeks following the conclusion of the campaign, I received an email, no doubt in error, from the same company purporting to be offering Legal Offshoring and Outsourcing Solutions to the US marketplace through their arrangement with Indian attorneys! I can assure you that the CEO of this particular organization has no legal qualifications whatsoever, much less experience within the legal offshoring industry.

Of course there is nothing to stop anyone from setting up such a company, but just as sure as night follows day, this type of amateur operation will only speed up the inevitable bubble burst in the LPO industry that we saw only a few years ago with the demise of the dot-coms.

Have we not learned anything from the collapse of the dot-coms? An idea is not enough to sustain a quality and confidential client service. LawScribe was incorporated in 2003 and has been operating in the Legal Outsourcing field ever since. Everyone within the Legal Process Outsourcing industry worth their salt knows who the reputable companies are. I have no qualms, and my clients and potential clients will confirm this, advising people who our main reputable and well established competitors are. I urgently implore these trailblazing LPOs to come together and create an industry wide standard of regulation so that clients will have confidence that they are not entering into arrangements with “fly by night” operations.

At LawScribe, we require our Indian attorneys to undergo an intensive two-month training course on U.S. Rules and Procedures before they are allowed to work on any client related matters. Several of our competitors also employ similar training and education to ensure quality amongst their attorneys. This is not enough! We must take the time out of our business development to formulate a Legal Process Outsourcing industry-wide program of regulation and accreditation. If we, as the leaders of this industry, can achieve this, our present and potential clients will have the utmost confidence in both the security and quality of our operations.

I propose a roundtable discussion among the reputable, established LPOs currently operating in the marketplace. I don't intend to name names, as it is entirely possible that I may forget some or simply be unaware of other entirely reputable companies currently operating within the industry. I have no intention of creating a closed-shop and a bar to new reputable organizations emerging, but purely for the preliminary discussions I propose that LPOs that can fulfill the following criteria be invited to participate:

1) The company must have been incorporated for a minimum period of 12 months.

2) An on-shore physical US or UK presence is mandatory - it is not sufficient to simply have a PO box mailing address!

3) Full time qualified US (or UK if a registered UK company) attorney presence on-shore is mandatory.

4) A willingness to undergo an independent verification of the company's Indian offices.

5) An independent verification of at least 10 of each company's Indian attorneys resumes including sworn statements from the individuals confirming that they are full time employees of the LPO concerned.

6) Statements from at least 10 existing clients of each LPO, subject to independent verification such statements can be anonymous if so desired.

The focus of these discussions will be on agreeing on a set of industry standards and an approved quality mark recognizable to our clients together with agreement on the timeframe for the introduction of an LPO educational qualification for all Indian attorneys working within the industry.

If we fail to regulate our industry now, from within, those who currently operate to the highest standards risk being tarred with the brush of “guilty by association” with those companies who are here only to make a fast buck.

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