A news item today explains how one large UK company has built its own “law factory”.
I periodically write about law factory as a way to handle high volume, lower value legal work. Whether it is suitable only for commoditized work or also ‘bread and butter’ legal matters remains, in my view, an open and interesting question.
On the lower end, Legal Week today reports on a fascinating development in Better out than in – how Carillion’s legal process outsourcing venture worked wonders for the company. The article explains how 30,000 employee UK construction firm Carillion developed, as the unexpected result of an acquisition, an owned-and-operated, 60-person, low-cost UK legal service center (in New Castle) that the company’s 12 panel law firms are required to use on employment matters. Furthermore, for “the in-house team, too, the move will free them up from much of the lower-level contract review work that is so prolific in a contract-driven business such as Carillion.”
The article reports that Carillion “has for the past few years had an ad hoc relationship with legal process outsourcing ["LPO"] group CPA Global.” It says that GC, Richard Tapp, believes the onshore solution “goes even further towards solving his quest to find a balance between the sheer volume of legal needs in a company the size of Carillion and the pressure to drive down costs.”
Coincidentally, last night I read, and commented on, a blog post by Steven Levy of Lexician, Offshoring and Legal: Lessons From the 787 Mess. Steve explains the difference between offshoring and outsourcing and argues that the benefits of offshoring are over rated. In my comment, I largely agreed with him though noted that I think there is still a good case to consider offshore document review for a high volume of documents in a review lasting reasonably long (probably months rather than weeks). I suggest you read his post and my comment for more details. What I should have said in my comment is that I also believe there is still a strong case generally for offshoring legal or business support for any high-volume tasks that can be clearly documented and objectively measured, especially tasks where the onshore professionals really do not need to interact directly with the workers (e.g., legal word processing or basic business research).
My take away from both items is that forward-thinking general counsels and law firms have plenty of opportunities in both the US and UK to reduce legal spend. They also have many good offshore options. Today, the question is not what options work but is there the will to act.