Strategic Legal Technology 
Legal outsourcing has made mainstream and legal media news for years. After blogging on legal process outsourcing (LPO) articles regularly I stopped because there were so many. Two articles in the Times Online today, however, caught my eye. A major multi-national has gone public about legal process outsourcing to slash its legal spend by 20%.
Rio Tinto’s legal switch puts pressure on London by Alex Spence reports on the fact. Rio Tinto deal heralds huge changes by well-known commentator and author Richard Susskind discusses the ramifications.
Spence reports that “Rio Tinto has hired a team of lawyers in India to try to reduce its annual £60 million legal bill by 20 per cent.” It is working with an LPO to recruit a team of 12 lawyers in India to “work for it on tasks such as reviewing documents and drafting contracts.” Rio expects to have 24 Indian lawyers within one year.
Susskind writes “the Rio Tinto deal suggests that imaginative pricing may not fully fix the more-for-less dilemma. Lawyers will need to go further and source their work differently, often by using less costly labour to do routine legal work…. People often assume that outsourcing and the options are applicable only to high-volume, low-value legal work. The Rio Tinto deal confirms this is wrong.”
For me, the Rio deal just adds to the list - literally - of corporations that offshore or outsource work. The list Outsourced Legal Services on this site shows 15 companies that offshore work to outsourcers or to their own offshore operations. So Rio is just one more company offshoring. Or is it? Specifically, this deal is announced with the intent of significant cost cutting and that feels new.
More generally, markets tip where the new and exotic become accepted and common. Geoffrey Moore’s Crossing the Chasm provides one framework for thinking about new approaches. Well before his work, however, you could see and model adoption of new high tech products (e.g., Polaroid cameras or Xerox-brand copiers) with S-shaped curves: slow ramp up followed by sudden acceleration.
The continuous (smooth) S-curve may not be a good fit for legal. Instead, a discontinuous step-shaped function may apply. Consider adoption in the legal market of e-mail, document management, marketing, lateral moves, or mergers. For each, there seemed to be only a few firms doing it and then, quite suddenly, many or all were. The “step function” reflects lawyer decision making: the first few adopters change slowly, gingerly, and quietly. Everyone wants to follow so once you have a dozen adopters, “the coast is clear” and the rest rush in.
Unfortunately, like calling the bottom of a recession (or the top of the market), it’s much easier to recognize the tipping point after the fact. Working at an LPO my view may be distorted, but it feels like legal outsourcing is at a tipping point. Of course, we won’t know for some time. Whether it is this year or beyond though, I am confident that, as with e-mail, marketing, etc., we will look at outsourcing and offshoring and try to remember what all the fuss was about.
