Wednesday, June 24, 2009

Guest article: Legal Outsourcing Management Strategies 2009

Rajiv Dogra

Various stakeholders of the LPO business convened at Legal Outsourcing Management Strategies (LOMS) 2009 conference to look at today and tomorrow of the industry.

Mark Ross, VP Global Marketing & Sales, Lawscribe spoke about ‘Thomas Friedman’s ‘World is flat’. He was of the opinion that with the impact of recession, client pressure on law firms, proposed deregulation of Legal services (in UK) even ‘legal profession flattens’ and ‘recession (is) acting as a catalyst.’

Vishal Aggarwal, Sr Manager at Wipro (LPO) recommended ‘Hold their hands’ approach to manage the perception problem faced from client side. He said ‘being factual & transparent’ is best medicine for LPO industry which is having ‘no single matured model’ so far. He added that quality, efficiency, TAT etc. are good to achieve results, however, more is needed to derive VALUE for the client.

Abhi Shah, CEO Clutch Group when asked about the trend of decreasing hourly rates of Indian LPO providers, stressed on the value of Quality to tackle this commoditization. Talking about talent, he was of view that apart from legal skills (a pre-requisite) employees should have US specific, service specific, client specific and project/case specific trainings.

For industry, the major concerns in term of quality is ‘acceptability of measuring metrics (by client)’ as law firms are not used to it and has been handled subjectively so far. Those who don’t agree would get client side feel from sentence “I know the Quality, when I see it”, which Michel quoted from his experiences with his client. On security front, Michel was of the view “Security has to be in the DNA of company”. He didn’t miss the opportunity to deepen the client fear, when he said “God may forgive you, client will not”.

In his presentation on ethics Mark Ross threw eye openers ‘Outsourcing in legal profession is delegation’ which is quite old & ‘What is new, where we outsource to’. He then dwelled in detail about ABA opinion on outsourcing of legal work. Mark said that law firms engaging in outsourcing should follow 3 simple rules in its communication to corporate client about LPO engagement and these three rules are DISCLOSE!, DISCLOSE! & DISCLOSE!

Taking Mark’s advice about disclosure in true spirit, David Hickey, Partner, Winston & Strawn LLP began disclosing the myths of legal outsourcing as the next speaker. One of the interesting realities presented by him was that ESI is expected to grow in big way, for which technology won’t be enough and there would be no substitute for having documents reviewed by human eye. I could not agree more with him when he said that even in the same team (under same roof) people communicate electronically.
Taking a dig at the misconception of LPO doing low-end work, he shared plethora of high-end activities done by LPOs such as:
Drafting & correcting privilege logs
Putting together contract database and identifying control weakness
Drafting case chronologies
Putting together witness binders
Conducting contract analysis
Compliance/regulatory work
Conducted research
Drafting head notes & case summaries

On the myth of high-security risk associated with LPOs, he was of the view that well-established LPOs have security systems in place that have standards higher than even the magic circle firms. His experience about LPO security has come from the fact that he has visited more than dozen LPOs in India & Philippines, which according to him are two leading legal outsourcing destinations.
Three important things for an LPO in his mind are QUALITY!, QUALITY ! & QUALITY!
However, he cautioned LPOs and said ‘Measure (quality) by the rule of reason’ and don’t use statistics to hide the facts. Looking at the issue of price wars he said “Industry should strongly resist the race to bottom”.

Michael Ford, EVP – American Discovery, took us through the drivers for corporate counsel and law firms to embrace LPO. He also dug at the real world LPO concerns and their possible solutions. The crux of his solution was for LPO providers to assume leadership and knowledge resource role and be an advisor to client, instead of being just another vendor/processor. If I have to use one phrase as I understood his point, ‘become an irreplaceable partner’ for client by playing on your strength areas.

Day 2 began with a talk from Michael Ford, the Chairperson. Michael shared his thoughts on industry – stressing on topics such as commoditization diluting the value, addressable market for LPOs, scope for new players, and lack of industry standards and collaborations. Analyzing further into the missing industry standards, he suggested LPO industry to have self governance model based on P2P defined standards. He advocated creation of an industry body, which he mandated is good in the evolutionary phase of industry heading towards maturity.

Dr. Akhil Prasad, VP & Head of legal at Fidelity Business services (India) provided an in-house counsels view to the audience. Looking at the cost-cutting challenges faced by in-house counsels, he was optimistic that LPO can be helpful in containing the costs. Optimism apart, he also shared some of the concerns that are important before in-house counsels can make a decision to outsource to any LPO. According to him technology is one of the key enablers for LPO.

Tariq Akbar, CEO - LegalEase Solutions, was of the view that consolidation, captive units and scaling for high-end work are the trends. Tariq also talked about the three models that are currently employed by the in-house counsels in engaging LPOs. Sharing his ideas on VC interest in the industry, he agreed that startup money is hard to get, though there had been interest of VC’s like IAN, Sequoia Capital, Canaan Partners, Helion Venture Partners, Glenrock etc.

The next presentation was on the ‘Future of Legal Outsourcing’ by Ritvik Lucose, VP Rainmaker. He was of the view that talent is and will be the challenge for the industry where quite a chunk of graduates passing out every year are unemployable and should be addressed at the earliest.
I feel that with the advent of LPO, where you can mark your way regardless of whether you have a godfather or not (take away of one of the discussion), the serious employable talent may be around the corner. LPOs can also prompt people who wanted to pursue law, but were scared of facing the courts, as a reason to go ahead and still not compromise on their earning ability. This may be an overtly optimistic view, but even if this doesn’t happen this way, industry is gearing itself to work with legal education institutes to increase the employable talent. This was the consensus area. Some of them like Cobra Legal are already working with law schools to enhance the curriculum.

Next session ‘Opportunities of Legal Outsourcing in the Indian Domestic market from a banking perspective’ was presented by B. Gopalakrishnan, President & Head Legal Department, Axis Bank, wherein Mr. Gopalakrishnan presented the idea that Indian entities are also looking at opportunities to work with LPOs that can help them in reducing mundane work and look at the concerns of the banking industry. Though, he also stressed upon the importance of quality.

Over all two key themes emerged in the conference - quality and security, as they are the key challenges as well as hygiene factors for this industry. Training and grooming of right talent is must for the LPO growth. Though recession has provided the opportunity for selling LPO concept, it has also created challenges to scale-up by drying investment capital. As rightly said by Abhi Shah, ‘Current market gonna separate men from boys’
Over all conference spilled lot of enthusiasm for the LPO industry, for all the representatives coming from various locations across the globe. It would be very appropriate to mention the final words of conference from Michael Ford, ‘Phir Milenge - Alwida - Jai Hind’.

Rajiv Dogra, analyses markets for CPA Global's different business units including Legal Support Services.

Friday, June 19, 2009

Press Release : Rio Tinto signs legal services outsourcing agreement with CPA Global

New Delhi, India - June 12, 2009 - Rio Tinto today announced that it has entered into a legal services outsourcing agreement with CPA Global that is projected to save Rio Tinto up to 20% annually in legal costs.

Under the agreement, CPA Global, one of the world’s leading providers of outsourced legal support services, are providing a team of lawyers in India to support Rio Tinto’s in-house legal function on a global basis.

Initially, the work undertaken by CPA Global includes contract review and drafting, legal research, and document review. However, it is anticipated that the scope of work will expand to cover other routine legal services work traditionally handled in-house by Rio Tinto or shared amongst the company’s panel of law firms.

Rio Tinto’s managing attorney, Leah Cooper, said: “We took a long hard look at our internal costs and the amount we were spending with outside counsel and saw an opportunity to make significant changes to the way we deliver legal services to the group. We have developed a ground-breaking legal model with CPA Global that will generate tremendous savings and serve the business without compromising quality.

“By shifting work to CPA Global our internal team will be freed up to get involved in some of the more complex and challenging legal matters, which in the past might have been sent to outside counsel at significant cost.

“As more of our standard legal work is filtered though to CPA Global, we will have more time to lift our heads up from the day-to-day reactive delivery of legal services and focus on being more proactive. We will have more time to spend with the business, develop stronger relationships and understand what we can do to prevent legal issues developing in the first place with a stronger focus on prevention rather than cure.”

Andrew Loach, CPA Global’s Vice President, Legal Support Services, said: “We are delighted to have been appointed as Rio Tinto’s legal services outsourcing partner. Rio Tinto have really done their homework on this and recognised that there is a better, more cost efficient way of structuring your legal services work, without sacrificing quality or security.”

Director – CPA Global and Country Head – India, Bhaskar Bagchi, added: “CPA Global’s India team will serve as an extension of Rio Tinto’s internal legal department. They are handpicked, well trained legal professionals who will work on a whole range of Rio Tinto legal matters from across the globe.”

Commenting on the choice of CPA Global, Rio Tinto’s Leah Cooper said: “CPA Global provided us with fresh thinking about how to unlock real savings on our legal costs without altering the level of service we offered our internal clients. What we particularly liked about CPA Global was that they are legal outsourcing specialists, not generalists, with a global size and scale.”

About CPA Global
With clients in over 100 countries, CPA Global is one of the world’s leading providers of legal process outsourcing (LPO) services. Now celebrating its 40th year of operations, CPA Global provides lifecycle management services for intellectual property such as patent, design and trademark searching, watching, renewals, and portfolio strategy. CPA Global is also a leader in the growing market for outsourced document review, contract management and litigation support services, helping law firms and corporations to realise value by managing risk, cost and capacity. Founded in Jersey, Channel Islands in 1969, CPA Global today employs more than 1,200 people in 16 offices in eight countries. For further information, please visit: or contact our media relations team:

Garima Misra
Ogilvy Public Relations Worldwide
Mobile: +91 9910106993

Karishma Dawar
Ogilvy Public Relations Worldwide
Mobile: +91 9873178498

About Rio Tinto
Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.

Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.

For further information, please contact:
Media Relations, London
Christina Mills
Office: +44 (0) 20 8080 1306
Mobile: +44 (0) 7825 275 605
Nick Cobban
Office: +44 (0) 20 8080 1305
Mobile: +44 (0) 7920 041 003

Media Relations, Americas
Tony Shaffer
Office: +1 202 393 0266
Mobile: +1 202 256 3667

Investor Relations, London
Nigel Jones
Office: +44 (0) 20 7781 2049
Mobile: +44 (0) 7917 227365
David Ovington
Office: +44 (0) 20 7781 2051
Mobile: +44 (0) 7920 010 978

Investor Relations, North America
Jason Combes
Office: +1 (0) 801 204 2919
Mobile: +1 (0) 801 558 2645


Susskind writes about Rio Tinto and CPA Global deal

Richard Susskind, the author of The End of Lawyers? and Visiting Professor at the Oxford Internet Institute, commented on the recent path breaking deal between Rio Tinto and CPA Global.

He said “it is evidence of a profound change in the legal world. In-house lawyers are under great pressure to reduce their head count and to spend less on external law firms, but, at the same time, their workload is increasing.

Clients, in short, need their advisers to provide more-for-less. One way to meet this challenge is for external lawyers to charge less. Most firms are indeed cutting their hourly rates and offering fixed fee arrangements; while many clients are driving down fees through e-auctioning and other devices. For now, it is a buyer’s market.”

This deal has been perceived in the legal market as one of the ground-breaking move that might change the way legal offshoring industry is perceived in the European market.

Point to be noted …

In the recently conducted Financial Times Legal outsourcing roundtable two main issues came out in the discussion. First, what is the line of separation between KPO and LPO and second the future of newly qualified lawyers in view of the recent changes in the legal industry such as LPO, the Legal Services Act, alternative billing etc.

Mark Ross has in his write-up spoken about in detail about these points. The nature of work done by LPO is not solely dependant on the fact that the purchaser is a law firm or corporate legal department. Ross in his article talks about various services that otherwise are being outsourced by the law firms but are of HRO and ITO nature.

And with respect to the education and future of the law graduates one has to keep in mind that the sole aim of education is to empower. Outdated syllabus and perspective belonging to the bygone era will only prove detrimental for the students when they would have to face the dynamic reality of the legal industry. The emphasis in the curriculum should be based on the forces of demand in the legal domain rather than archaic thinking of the syllabus setters. IGNOU’s step towards providing a diploma in LPO can be seen as an avant garde venture into the new legal education arena.

Simmons and Simmons to rock the LPO industry

Simmons and Simmons, one of the major law firms, is considering the option of using qualified lawyers in low cost jurisdictions to get the benefit of 50% cost saving.

Managing Partner Mark Dawkins said “We’re not going to defend a business model that clients don’t want to have to pay for.” This time the company’s “three-year strategy” is to maximize efficiency. In light of this vision they are thinking of “… new ways of working at the top end of the market”. And the step to move work offshore will come as one of the decisive decisions not only for the firm but also for the industry. It would set a precedent for other law firms in using agency lawyers in offshore locations.

Report by ValueNotes - 3% of law firms in UK, US offshore back-office work to India

In a recently published report by ValueNotes, 3% of law firms in UK, US offshore their back-office work to India. This number though less is in no way discouraging. Because of the fact that reasons attributed to it aren’t impossible to deal with. The first is the quality of work. With companies getting ISO certification and growing emphasis on quality one can gauge the sensitivity shown by offshore LPO service providers towards the clients’ concerns.

The second major issue is data security. LPOs deal with highly confidential matter. Thereby it becomes imperative that documents are handled in a sensitive manner. Companies have started following ISMS policies and are aware and alert to the potential dangers of leaking of information.

The third issue is lack of conviction about the benefits of offshoring. In order to tackle this many companies have opened offices on onshore locations so that communication can happen in an effortless way. Also the recent trends in global economy and successful cases of offshoring such as CPA Global dealings with the Microsoft and SDD Global Solutions role in the Los Angeles libel case against HBO’S “Da Ali G Show” are indicative of the changing time.