Friday, April 18, 2008

Press Release: CPA further strengthens European Legal Services Unit

CPA further strengthens European Legal Services Unit with key new appointments

LONDON, 16 April, 2008—Computer Patent Annuities (CPA), a leading provider of legal outsourcing services, announced today that Derk Kropholler and Andrew Loach have joined as vice presidents of business development for the company’s European Legal Services Unit.

Kropholler has more than 12 years’ experience in selling to senior and managing partners within Europe’s largest law firms. Most recently, he was the international sales director for Thomson Elite, a global market leader in providing ERP solutions to professional services firms. At Thomson, Kropholler was head of regional sales across the UK, Europe, Asia and Australia.

“CPA has an impressive international client base and a breadth of offering that I believe is a true competitive advantage for them. The company is now further expanding its solutions offering and is already seeing success within the Legal Process Outsourcing market,’’ Kropholler says. “It is an exciting time for the firm and I’m looking forward to making a significant long-term contribution.” Kropholler, who is based in Amsterdam, speaks fluent Dutch, English, German and French.

Loach joins as vice president of business development for CPA’s corporate segment of Legal Services in Europe and will be based in London. He has a strong track record of success in the outsourcing arena. He was previously sales & marketing director for Higham Group, an outsourcing vendor providing services to the financial, retail and media sectors. Before that, Loach was Business Development Director of Xchanging Group, a leading BPO vendor providing HR, procurement and accounting services. During his tenure at Xchanging, revenues grew from $100m to $210m.

“I’m delighted to be joining CPA’s team and am looking forward to the opportunities that will arise as the firm continues its ambitious strategy”, says Loach. “CPA has assembled a strong team which will only serve to benefit its clients in the fast-changing world of legal outsourcing. I believe that CPA’s 40-year legal domain expertise, strong brand, strong on-shore and off-shore presence and the company’s leading-edge technology infrastructure strongly positions CPA to seize market leadership in this space.”

“The addition of Derk and Andrew to our Legal Services team underscores our commitment to expanding our position as the industry’s leading legal outsourcing solution provider”, adds Chris Veator, CPA’s Executive Vice President of Legal Services. “This industry is expected to grow to over $1bn by 2010 and CPA is investing significantly to ensure that our customers are offered the most comprehensive and highest quality services.”

About CPA

With nearly a 40-year history of solving complex challenges for the legal community, CPA is a leading provider of outsourced IP, Litigation Support and Contract Management solutions. CPA’s clients include leading law firms and corporations worldwide, and CPA has an exemplary record of providing tools and solutions to help them realise value by managing risk, cost and capacity. For further information about CPA visit:

Media Contacts

Rob Stichbury, CPA +44 (0) 1784 4957571

James Clasper, Brunswick Group, +44 (0)20 7404 5959

Thursday, April 10, 2008

ALM's Legal Industry Outsourcing Forum

Alongside another conference, which tries to answer the question "Why don't companies outsource?" comes a conference - ALM's Legal Industry Outsourcing Forum - which, among other things, promises to explore the the question "Why are leading companies outsourcing?" and why has legal outsourcing become more of a necessity than an entry under the "initiatives section" on your annual appraisal form. Here's the agenda.

In-House and Law Firm Attorneys qualify for a rate of $1095, which is $1195 from April 19th onwards. For others, the cost would be $2,195. Readers of this blog can avail a discount to these prices, please drop me an email about the same.

Hopefully the impressive faculty panel should justify the cost. CLE credits are available.

Tuesday, April 08, 2008

Conference: International Outsourcing of the Legal Profession

The Institute for Global Challenges and the Law, at the Boalt Hall, School of Law, University of California, Berkeley is organising a one-day conference on the International Outsourcing of the Legal Profession on Friday, April 25, 2008. The details on the event are available at and the speaker panel comprises representations from law firms (Morrison Foerster, Fish & Richardson, Goodwin Procter), corporations (Microsoft, Cisco Systems, Sun Microsystems) , legal and economics academia (UC Berkeley, Penn State) and some LPO providers (Pangea3, LawScribe, LegalForest, Raj Abhyanker). The topics revolve around answering the following:

  • Why isn’t everyone outsourcing legal work?
  • What type of legal work is outsourced and to whom is it being outsourced?
  • Who is outsourcing? And what have their experiences been both generally and with regard to outsourcing patent drafting and patent searches?
  • What impact will outsourcing have on the elite guild nature of the legal profession and on U.S. employment as a whole?

The registration fee for the conference is $150 and CLE credits are available.

How LPOs will Help Law Firms Weather the Economic Storm

By Liam Brown, President and CEO, Integreon

The Wall Street Journal recently ran a story with a rather downbeat headline: “Why Big Law is Bracing for a Leaner 2008.” Yes, the economic downturn is going to have a major impact on law firms, but these revenue pressures will likely lead to operational improvements in order to preserve profitability. The truth is that the legal profession has been slow to embrace the knowledge process outsourcing (KPO) trend that Wall Street began adopting nearly a decade ago. However, this financial environment provides an opportunity to introduce efficiencies, which might have otherwise received a chillier reception during better economic times, in order to make law firms more efficient and competitive.

To be sure, law firms have long outsourced back-office functions such as payroll, copy center, mailroom and travel and it has become recent common practice for law firms to outsource IT functions too. But today there are also many non-core or low value-add knowledge worker functions that no longer make economic sense for law firms to handle internally. Non-core administrative functions include word processing and transcription, presentation graphics and accounting. Low value-add legal functions include e-Discovery services, litigation document review, research and intellectual property support.

I used to hear that constraints to outsourcing domestically or offshore to countries like India and Philippines included fear of losing control of the quality of the work or of security of information. But these fears are unfounded, as evidenced by the judgment-based, market-sensitive work the major Wall Street firms, major corporations and some leading law firms now outsource to third parties or their own offshore captives. Indeed, major law firms that so far have resisted the outsourcing or offshoring trend will find it increasingly difficult to justify the cost of retaining these non-core functions in-house, particularly in the high cost cities in which they operate. Today more than ever before, their clients expect them to operate cost-effectively on their behalf. My personal Eureka moment, which was the catalyst for Integreon entering the legal process outsourcing (LPO) market, was when I received an invoice from a Big Law firm for $250 an hour for their associates to review my email during litigation. I was very happy with the value-added legal counsel that the partner at the firm provided (we prevailed), and thought “I am happy to pay the partner $500 per hour, but Integreon has knowledge workers offshore who can do this kind of review work for one tenth of the cost of the $250 per hour associate here in U.S… and I can afford lots more of them to do the work faster and with more rigorous quality checking”.

Leading outsourcing firms deliver services from low cost domestic cities, such as Fargo, ND, as well as from overseas countries such as Philippines and India. This allows law firms to adopt a ‘best-shore’ approach to their operations, keeping some functions in the U.S. or U.K., while moving other functions overseas. For example, work requiring extensive ongoing interaction with the firm’s lawyers might best be delivered from a low cost onshore location. Or work, which would be completed overnight in U.S. by more expensive night staff, might be performed much more cost effectively during the daytime in even lower cost India or Philippines, leveraging the time zone difference. Or delivering services from multiple locations for business continuity reasons.

Those firms who have already invested in moving operations to lower cost locations over the last few years have a meaningful cost advantage going into 2008. I was recently sitting with the COO and CIO of one of our Big Law firm clients who both appeared quite relaxed because, as one of them put it, “we need to take $5m out of our cost structure this year and we can do that because we did the heavy-lifting of launching our offshore center already and now we just need to accelerate the rollout”.

So in my view, today’s pressure on costs will lead to lasting changes that will make the legal industry decidedly more efficient tomorrow. And the beneficiaries will be the LPOs, the partners at the law firms and the law firm’s clients.

Liam Brown is President and CEO of Integreon, a global provider of knowledge support outsourcing services.

Tuesday, April 01, 2008

The "R" Word: Further comments about recession's impact on LPO

The "R" Word - by David Perla, Co-CEO, Pangea3

Recession is on everyone's mind, but the word everyone is trying to avoid saying. For starters, let's acknowledge what we all know: The U.S. economy is in very bad shape, and it's going to either get worse or stay this way for the rest of 2008, and perhaps much longer. The question on everyone's mind in the legal process outsourcing industry, and in the outsourcing industry in general, is whether this will have a positive or negative impact on 2008 for LPO and for other outsourcing players. I just returned from India, and everyone on our team was talking, often softly but always inquisitively, about the U.S. economy. Not less than three of Pangea3's team members, one in each of our Patent, Litigation and Corporate channels, asked me largely the same question: "David - is the recession good for Pangea3 or bad for Pangea3? And what are our plans for continuing to grow in this recession?"

First, I'm always impressed that young professionals thousands of miles away appreciate and think about the global impact of the U.S. economy, both generally and on India outsourcing businesses specifically. Second, the question forces LPO players to think both about how we will be impacted and what we can do to make lemonade out of lemons.

In my humble opinion, the recession is going to be both bad and good for outsourcing and legal outsourcing businesses, depending on their size, market footprint, industry base and the amount that their clients spend on outsourcing as a proportion of the total amount spent on that function (such as finance, HR, legal, technology, etc.).

In short, I predict that the recession will have
(1) a positive impact on the LPO industry,
(2) a decidedly mixed-to-negative impact on the more developed areas of the outsourcing industry, such as technology and BPO and
(3) disastrous impacts for small players in all industries.

Here's why:
Cash is King: In a recession, cash is king, as companies undertake measures to bolster and protect the current assets portion of their balance sheets. In that environment, companies will cut spending in traditional areas, such as marketing, IT and R & D, but also look for ways to cut spending in more rarely touched cash-consuming cost centers, of which the corporate legal department is among the worst offenders. Moreover, because legal outsourcing is so new, most in-house legal departments have not yet taken advantage of the cash-preservation opportunities afforded by LPO. When those in-house legal departments get squeezed to spend less cash, as they surely will, legal outsourcing will offer them the opportunity.

Litigation: In this recession, everyone is looking for a culprit, and the litigation bloodbath is just beginning. Witness shareholder and related litigation on just the Bear Stearns debacle alone. Litigation activity related to the recession will increase, and the resulting litigations will be, not surprisingly, discovery heavy. Combine this increase in litigation with the need to preserve cash, and litigants will look to India as a discovery solution. It's happening already, as most of the top LPO providers have seen a marked increase in litigation business in the last six months.

Market Awareness: Coincidentally, this recession is hitting at exactly the same time that market awareness of LPO is exploding, along with the growing acceptance by law firms that they simply must find ways to help their clients reduce spending, especially on litigation. So the demand to cut legal costs, together with the increasingly widespread awareness and acceptance of outsourcing to India as a viable and desirable option, will move both in-house legal work and law firm work to India based legal outsourcing companies. Thus, I expect that legal outsourcing providers (at least the good/big ones) will see a spike in business in this economic environment. However, two types of outsourcing providers will suffer:
(1) small LPO providers and
(2) providers of outsourcing services where the client spend on that service is going to be cut, along with other expenses.

Small LPO's: Pangea3 and its peer LPO's are already seeing a massive influx of resumes from smaller LPO players - those same players that just last year were enthusiastically recruiting and creating wage inflation in the Indian legal services market. In a market like this, two dynamics work against a smaller/newer player. First, US and European companies flee to quality, because outsourcing legal services to India is no longer viewed as an experiment - it is a business imperative, for those companies going this route. Second, the market itself has delivered a double-whammy to LPO providers: (1) wage inflation, which was largely created by the new entrants themselves, and (2) a strong Indian Rupee. Combine those two factors with the relative glut of small players and an inability of those players to demonstrate true quality and staying power (both of which big law firms and in-house legal departments demand) and it's game over for many of them. All new and dislocative industries go through rapid growth followed by consolidation, and I think we're in the beginning of the consolidation phase. I lived through just this dynamic in the online recruitment industry while at, from 1999 through 2004, and history tends to repeat itself - as least economic history. I'm not suggesting that we will see acquisitions or mergers of legal outsourcing providers this year, but I submit that there will be fewer players at the end of 2008 than there are now, but that the leaders and high-quality providers will emerge bigger, faster and stronger. The same thing occurred during our last recession, with the winners in Indian IT and business process outsourcing emerging as major global companies. The blogosphere has a long memory, so let's re-visit this a year from now.

Other Outsourcing Companies: The story is going to be slightly different for outsourcing companies outside of legal services outsourcing. In certain other outsourcing industries, outsourcing to India, the Philippines and other global destinations has become the norm rather than the exception. In those cases, the budgets being spent on outsourcing will be cut alongside the budgets for that function in general, such as IT, marketing and HR, to name just a few. So the consumers of those outsourced services certainly prefer buying those services offshore to onshore - but they'll cut the entire budget, including the offshore component. Witness the cancellation of certain big outsourcing contracts already, and expect more such cancellations and modifications. The exception will be those outsourcing companies that are perceived as best-in-class, which companies will be able to land more new business from clients that have not yet offshored core cost center services, and who will do so in 2008 and 2009 as a way to . . . preserve cash. So the best players (not necessarily the biggest) should stand to gain, while the mammoths run the risk of being the victim of contract cancellations. That's a long answer to a difficult but important question. However this plays out, 2008 is going to be a very bumpy year, with a lot of pain for a lot of people. But ultimately, expect to see LPO much bigger, much stronger and much more mainstream come Spring 2009.