Larger Firms being necessitated to look at LPO

The LegalEase blog has an 'unconventional' trend to report: that of larger law firms being adopters of LPO to differentiate themselves in the new workd - marred by financial unease. To quote:

The trend that we're seeing take root is that of large firms actively aligning with an LPO to then present their services to corporate counsel in a convergence that benefits each party. The large firm gains an advantage over their competitors with the significant savings the LPO provides; the LPO benefits by the association with well established domestic firms; and the in-house counsel enjoys the dual benefit of cost savings managed by a firm with whom they already have a business relationship.And it doesn't seem unreasonable to conclude that the driving force behind the trend is the recent financial crunch, which has forced corporate counsel to demand changes from the firms they traditionally hire.

I met a partner from a large law firm a few months ago whose straight question was: I don't have a doubt that LPO is good, but how do we (the firm) benefit from it? The answer, it appears, is easy to come by when competitive forces start to show up. Differentiate yourself.

LPO: The new survival kit for the law firms

Martin L. Sandel, formerly a trial lawyer of more than 25 years experience, is President and CEO of SENDLAW.com. He in his article “Legal outsourcing-Politically correct? Or Politically Incorrect?” cites the example of three law firms that had to shut down because of exorbitant fees they demanded from their clients. As a result, a lot of attorneys were laid off as the companies couldn’t afford such high fees and eventually the law firms had to shut down some with a history of 118 years in the business.

The lawyers are generally perceived to be the custodians of traditions. And one of the age-old traditions appears to be making the clients pay heavily for services they offer. In this time of recession, cost-effectiveness is the mantra that people in the boardroom seem to be chanting. There isn’t evidence of Heller Ehrman, Thelen LLP and Thatcher, Proffitt & Wood LLP, three of the firms that had to close down, using legal offshoring. Compare this to some of the Magic Circle firms such as Clifford Chance that have gone ahead in embracing outsourcing, it is surprising to see that some legal firms harbor prejudices against the LPO industry.

Charles Darwin said “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” Legal process outsourcing as Martin correctly points out is “another tool (like computers, word processing software, voice recognition technology, e-mail) to enhance efficiencies and improve the bottom line for law firms and their clients alike”. It is time that course of winds of change is understood and a serious objective analysis is undertaken to comprehend the benefits of the LPO industry and to make the best decision so that (sadly) the end result doesn’t come out to be a closure.