Friday, September 26, 2008

Legal Process Outsourcing: Heard from the Grapevine

First, excerpt from an email from a reader of the blog who has some "source" based information on Williams Lea LPO (Centric):

"I find your blog very interesting always try and dip in when I can.
I remember last year or earlier this year it was reported and mentioned on your blog too that Williams Lea bought Centric LPO to get into the LPO space. Which was great, not just a BPO pretending it was easy to move up the value chain into KPO/LPO but putting their money where there mouth is. Hurray we all cried.
However, my sources tell me that Centric LPO is being sold off from Williams Lea after only a year. The reason: - Williams Lea have realised that they have to layout proper investment in the space to gain any further credibility. The Centric LPO team had a great proposition - they just needed a vehicle and possibly still do need a vehicle that supports this growing market.
I am sure Williams Lee will blame the credit crunch and obviously the majority of their clients are in the Investment Banking space etc, but it is remiss of them and seems a shame that they get into a space through acquisition and then bail out of a market that with a bit of focus and resource could have been very successful for them.
How many other BPO firms will either pull out of the LPO space or not get into it, leaving the niche players to carve up the market between them?"

And then, the grapevine is abuzz with the news about a large legal outsourcing firm in talks to get acquired by R R Donnelley, who also acquired OfficeTiger in 2006.

With one large company set to exit the space and another one set to enter, it has become interesting for punters to predict what the LPO company of 2010 will look like. Will it be a large general business services company with pockets deep enough to acquire small companies, not the mom-and-pop shops which have opened across India, and build a cluster of capabilities and clientele under one roof? Or, will large law firms try their hand at opening offshore centers which allow them to service their corporate clients? Will niche LPO companies be able to survive given the undue scepticism about benefits of Legal Offshoring among large law firms?

The financial crisis will defintely act as a driver for optimization of legal expenses and offshoring as a means should be an obvious choice. Who to outsource to will depend on the risk profile of the buyer of the outsourced service and thought behind their vision. A lot of choice also does not help!