Report From Financial Times LPO Roundtable
The FT Legal Outsourcing roundtable took place the very same morning that thelawyer.com reported on Simmons and Simmons’ proposed plan to outsource work offshore. The timing could not have been more perfect!
The panel speakers included Nigel Emmerson, Partner, Dickinson Dees LLP, Iain Monaghan, Partner, Pinsent Masons LLP, Bavita Rai, Partner and Head of Litigation Operations, Weightmans LLP and John Croft, President, Global Sales and Marketing, Integreon Managed Solutions, Inc.
Two key points emerged from the discussion. First, where does KPO end and LPO begin? Second, what does the future look like for newly qualified lawyers and young associates and students still at law school in a legal profession being buffeted by the forces of LPO, the Legal Services Act, alternative billing, law firm restructuring, technological advances and globalization.
As to the first point, Wikipedia defines legal outsourcing as
The question then becomes one of what are legal support services? Surely if the purchaser of outsourced support is a law firm, but the support services being outsourced are help desk, IT, or HR, this should not come within the LPO definition, rather HRO and ITO. Furthermore the passage of time clearly impacts on the particular bracket into which a service comes. Insurance claims management and large scale conveyancing transactions are routinely processed offshore in their hundreds of thousands. Only fifteen years ago these tasks were considered appropriate for fully qualified solicitors and paralegals. One only has to consider the less than $50 fee now generated for processing a remortgage to fully comprehend the impact of automation and offshoring on a task that was once a regular source of solicitor fee income. The largest players in the outsourced claims management and conveyancing markets define themselves as KPO companies, rather than LPO.
On the second point, the future for the next generation of lawyers, numerous references were made to the recently published End of Lawyers?, by Richard Susskind. There was a growing consensus that the current financial crisis is acting as a catalyst to changes that are long overdue for the legal profession. An associate at an AmLaw 5 firm asked how young lawyers would be trained in the future, if the tasks that were previously utilized for this purpose were either eliminated owing to technological progression or were outsourced offshore? I refer readers to a piece I wrote almost a year ago, Lawyer, Rainmaker, Candlestick Maker, in which I bemoaned the antiquated teaching methods and subject matter covered during the JD and LLB courses on both sides of the Atlantic. I wrote at the time:
I believe firmly that there is insufficient emphasis placed on the development of rainmaking skills within the law degree. In today’s cut and thrust economy, with law firms and corporations starting to tighten their belts, Universities must take an increased level of responsibility in helping mould young attorneys so that they are capable of hitting the ground running on day one with an understanding of the requisite qualities necessary to succeed in the business that is law.
The J.D. adopts the Case (a method of studying landmark cases) and Socratic methods (a method of examining students on the reasoning of the court in the cases studied) as its didactic approach. I am not advocating for one moment the removal of this structured form of tuition, however I question whether it alone, given the market forces discussed above, is sufficient adequately to prepare young lawyers for the real world. It is all well and good being able to regurgitate case law and to construct a written legal argument, but there are people all around the world who can also do this at a much lower cost and to whom we are now easily connected.
Insufficient time is spent on practical client interviews, networking skills, understanding the business of running a law firm, communication and negotiation techniques. Yes, all newly qualified attorneys are aware of the billing requirements soon to be incumbent upon them, but do they understand why these requirements exist? Are any law students able to learn about alternative billing structures, the history of the hourly rate, fixed fees, fee-capping arrangements and how billing accurately and clearly for the provision of legal services can actually be utilized as a marketing tool in attracting clients? Do any Law courses require their students to prove their mettle within a networking situation? Would it be impossible to replicate a networking event or to send students to such events with a variety of goals to be achieved?
As for ongoing training once newly qualified associates join firms, sophisticated clients will no longer be prepared to pay for this. Firms will need to absorb the cost of this training while retaining a profitable bottom line by paying greater attention to cost reduction as opposed to unachievable billing targets.
The panel speakers included Nigel Emmerson, Partner, Dickinson Dees LLP, Iain Monaghan, Partner, Pinsent Masons LLP, Bavita Rai, Partner and Head of Litigation Operations, Weightmans LLP and John Croft, President, Global Sales and Marketing, Integreon Managed Solutions, Inc.
Two key points emerged from the discussion. First, where does KPO end and LPO begin? Second, what does the future look like for newly qualified lawyers and young associates and students still at law school in a legal profession being buffeted by the forces of LPO, the Legal Services Act, alternative billing, law firm restructuring, technological advances and globalization.
As to the first point, Wikipedia defines legal outsourcing as
the practice of a law firm or corporation obtaining legal support services from an outside law firm or legal support services company.
The question then becomes one of what are legal support services? Surely if the purchaser of outsourced support is a law firm, but the support services being outsourced are help desk, IT, or HR, this should not come within the LPO definition, rather HRO and ITO. Furthermore the passage of time clearly impacts on the particular bracket into which a service comes. Insurance claims management and large scale conveyancing transactions are routinely processed offshore in their hundreds of thousands. Only fifteen years ago these tasks were considered appropriate for fully qualified solicitors and paralegals. One only has to consider the less than $50 fee now generated for processing a remortgage to fully comprehend the impact of automation and offshoring on a task that was once a regular source of solicitor fee income. The largest players in the outsourced claims management and conveyancing markets define themselves as KPO companies, rather than LPO.
On the second point, the future for the next generation of lawyers, numerous references were made to the recently published End of Lawyers?, by Richard Susskind. There was a growing consensus that the current financial crisis is acting as a catalyst to changes that are long overdue for the legal profession. An associate at an AmLaw 5 firm asked how young lawyers would be trained in the future, if the tasks that were previously utilized for this purpose were either eliminated owing to technological progression or were outsourced offshore? I refer readers to a piece I wrote almost a year ago, Lawyer, Rainmaker, Candlestick Maker, in which I bemoaned the antiquated teaching methods and subject matter covered during the JD and LLB courses on both sides of the Atlantic. I wrote at the time:
I believe firmly that there is insufficient emphasis placed on the development of rainmaking skills within the law degree. In today’s cut and thrust economy, with law firms and corporations starting to tighten their belts, Universities must take an increased level of responsibility in helping mould young attorneys so that they are capable of hitting the ground running on day one with an understanding of the requisite qualities necessary to succeed in the business that is law.
The J.D. adopts the Case (a method of studying landmark cases) and Socratic methods (a method of examining students on the reasoning of the court in the cases studied) as its didactic approach. I am not advocating for one moment the removal of this structured form of tuition, however I question whether it alone, given the market forces discussed above, is sufficient adequately to prepare young lawyers for the real world. It is all well and good being able to regurgitate case law and to construct a written legal argument, but there are people all around the world who can also do this at a much lower cost and to whom we are now easily connected.
Insufficient time is spent on practical client interviews, networking skills, understanding the business of running a law firm, communication and negotiation techniques. Yes, all newly qualified attorneys are aware of the billing requirements soon to be incumbent upon them, but do they understand why these requirements exist? Are any law students able to learn about alternative billing structures, the history of the hourly rate, fixed fees, fee-capping arrangements and how billing accurately and clearly for the provision of legal services can actually be utilized as a marketing tool in attracting clients? Do any Law courses require their students to prove their mettle within a networking situation? Would it be impossible to replicate a networking event or to send students to such events with a variety of goals to be achieved?
As for ongoing training once newly qualified associates join firms, sophisticated clients will no longer be prepared to pay for this. Firms will need to absorb the cost of this training while retaining a profitable bottom line by paying greater attention to cost reduction as opposed to unachievable billing targets.
posted by Mark Ross at
2:38 PM
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