ValueNotes Release LPO Report Based on Client Data

The latest report from ValueNotes makes for interesting reading. This is ValueNotes’ first foray into an LPO report based entirely on data provided by LPO clients and potential clients. Responses were received from 102 law firms (over 80 classified as mid or large size i.e in excess of 300 employees). Less than 3% of those surveyed testified to having utilized offshore legal resources. The naysayers may well reference this 3% figure as evidence that the LPO industry is all smoke and no fire. On the contrary, I prefer to view this as evidence that we are at the tip of the iceberg. The number of LPOs has trebled over the course of the last three years alongside an equivalent increase in revenue. Although market consolidation is surely around the corner, which will inevitably result in a deflation in the number of LPO companies, there is little doubt in my mind of the tremendous potential of this industry. Click here to access the report’s executive summary home page.

Unsurprisingly data security was rated as the top concern among those that had previously offshored legal work, (see my prior blog article “Security and Client Confidentiality the Number One Concern"). The perceived lower quality of work was the top rated barrier to entry for those yet to dip their toes in the offshore waters.

Although clearly of no statistical value, what I found particularly illuminating from a personal perspective were the anonymous quotes from those participating attorneys, belonging to the anti-outsourcing camp. These viewpoints demonstrate the necessity for ongoing LPO education of the US and UK legal professions. Clearly many who object do so based entirely on prejudice and inaccurate hearsay, as opposed to fact based research. A couple of quotes which caught my eye, illustrative of this point, follow:

“If an offshoring program takes you any time at all from a management perspective it doesn’t save you any money.”

And: -

“There is a very real risk of having the service provider sell your information.”

Finally the quote that demonstrated how out of touch many within the legal profession are with their clients:

“If we offshore legal research or contract review, how will our junior associates get trained?”

I remain both transfixed and shocked by this antiquated viewpoint even as I type this piece! In today’s technologically advanced world, what justification is there to immerse young attorneys in the repetitious drudgery of traditional “training work”, AND to bill the client for this? In his book The End of Lawyers? Richard Susskind discusses this very dilemma of how young lawyers of the future are to be trained.

“Using…wide variety of advanced e-learning systems… to simulate a wide variety of legal scenarios and in so doing provide junior lawyers with a safe, well-bounded environment within which to experiment and from which to learn.”

In addition to the above, I would simply add that whether a law firm wishes to embrace advanced e-learning and simulated training techniques is a question for the law firm, and not the paying client. What is clear, is that clients will no longer be prepared to pay firms to train their junior associates on tasks that can either be outsourced or automated or both.