Interview with Outsource Magazine on ‘The Rise of Legal Services Outsourcing’

This interview was originally published in Outsource Magazine.

Outsource Magazine: Does the industry need a book on Legal Services Outsourcing?

Andrew Burgess: Absolutely! If you look out there, there is very little guidance available to law firms and General Counsels about how they can get the best value out of using third party providers and, at the same time, minimise the risks that it can bring. There are plenty of providers and vendors trying to sell you something, but hardly any truly independent advice available. That’s what we were trying to achieve with the book.

OM: Tell me how the book came about

AB: I was presenting at an LSO conference a few years ago and made the acquaintance of Professor Leslie Willcocks of the London School of Economics, who many people will know is a leading academic figure in the world of outsourcing. He had just completed some research on ‘Accelerated BPO’ and I suggested that we should try and do something similar with LSO, which at the time was the ‘new kid on the block’.  Together with Professor Mary Lacity from the University of Missouri St Louis we wrote a couple of papers which went down well enough that Bloomsbury, the publisher, felt there was sufficient substance and depth, and market interest, to expand them into a book.

OM: Tell me about the collaboration with the London School of Economics

AB: The collaboration with the LSE was key. One of the central tenets of the book is that LSO will follow the same trajectory as BPO, so we used the LSE BPO research as our foundation. We then ‘brought it to life’ with data that we had collected from the market and interviews with customer / provider pairs – these in particular were very illuminating as to finding out what makes a successful LSO relationship. I then focused on how the legal sector can be different to BPO and therefore what different strategies and approaches need to be taken when building a ‘legal eco-system’.

OM: Can you expand on what you mean by a ‘legal eco-system’?

AB: Of course. One of the biggest challenges facing any legal department is giving enough time and space to the senior lawyers to focus on adding value to the business, without getting bogged down in minor tasks and administration. For them to become true ‘business partners’ the legal department needs to create a platform of transactional services that then supports those high-value activities: this platform will be built up from a combination of in-house shared resources and third party providers, including law firms, LPO providers, technology vendors and subject matter experts. We call it an eco-system because all of the parties are dependent in some way on all of the others, and it should evolve over time, to keep risks mitigated and to adapt to business change.

OM: You talk about the LSO ‘tipping point’ not quite being reached yet, as demand and the market are in continual flux. Do you think we will ever get to that point?

AB: I think we are closer than ever, but LSO is still not the default option when organisations are looking to re-organise. In IT, for example, outsourcing is very much ‘business as usual’, but there are still a whole lot of GCs and Managing Partners that need to be convinced of the benefits of LSO. Hopefully this book will give them some confidence that it should be considered as the rule rather than the exception.

OM: Who’s driving the market for LSO now?

AB: This is definitely coming from the GCs. The ‘enlightened’ ones can see LSO’s potential and are demanding more from their service providers, particularly in moving up the value-chain with regard to the activities that they carry out. And many providers are reacting well – we are seeing a new breed emerge that are flexible, responsive and very capable – we just don’t have the necessary scale and momentum yet – and each one is doing something a bit different to the others so that it’s almost as though we have many ‘categories of one’. Alongside all of this you have the new providers being created as Alternative Business Structures (ABS) that will have the ability to practice law without being part of a law firm partnership.

OM: What do you see as the next big thing in LSO?

AB: Although it’s still early days, the ABS market is bound to have a big impact, both on law firms and service providers. With the likes of EY and PwC either planning or achieving ABS status, the traditional law firms need to watch their backs very carefully – it’s not too hard to  imagine the Big 4 firms getting their formidable sales engine focused on stealing the legal work from the law firms in their client portfolios. And, with a healthy appetite to exploit technology to deliver better quality services (something with which law firms are not renowned for) then I think the power will definitely start to shift toward the big consultancies as legal service providers.

OM: Can we expect to see a follow up to the book at any time?

AB: As you’ve probably gathered, the LSO market is constantly changing, therefore I expect we will do an update to the book at some point in the future. Hopefully by that point we will have reached the proverbial tipping point and there will be enough change in the market, with LSO simply being ‘business as usual’, to be able to write a follow up book that focuses on innovation and transformation through the legal eco-system. I think, for the legal sector’s sake, this phase in its evolution can’t come soon enough.

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