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Global 100 UK Firm Goes Public On Legal Outsourcing

by Mark Ross

The reported on June 22nd that acclaimed Global 100, U.K. law firm Pinsent Masons, was to outsource litigation work to South African LPO, Exigent. Comments on the article from interested readers, ranged across the entire spectrum, from negative fear mongering to positive endorsement. I have highlighted a few below. Click here to access the full article, entitled Pinsent, First Firm to Offshore Work of Qualified U.K. Lawyers.

“It WILL result in unacceptable drops in quality. Being unable to communicate properly with the people doing the work offshore will lead to the same frustration, errors and delays that arose when the callcentre industry started outsourcing.”

“How can any professional body be expected to protect the public from unscrupulous practitioners who cloak themselves through offshore arrangements?”

“If a document can be reviewed by a senior south African lawyer more cheaply than a junior English associate – or even trainee or paralegal – just how is the client suffering?”

Following the announcement of the Pinsent deal, and the subsequent wave of publicity, I’m delighted that Mark Surguy, Pinsent Masons' Legal Director, and one of the driving forces behind the firm’s outsourcing initiative has agreed to indulge me and be interviewed for the blog. I interviewed Mark on 9/7/09 while he was still in Cape Town supervising the recruitment of the offshore team leaders. My questions are italicized.

Mark, first of all, many many thanks for agreeing to contribute to my blog, I’m sure my readers will find your insight illuminating. Perhaps you could enlighten my readers on your own background and how you developed your personal interest in legal outsourcing and technology?

I have been a commercial litigator for over 20 years. My own interest in globalization, technology and how these two forces impact the legal profession goes back to my time working for the legal arm of Arthur Anderson. The innovative use of technology together with forward thinking colleagues and the way that they performed their work opened my eyes to the possibilities ahead. Since joining Pinsent Masons I have been banging the tech drum among my colleagues now for a number of years.

So why now, what has tipped your firm over the edge so to speak, not only to actively embrace legal outsourcing, but to do so publically?

The decision was made partly due to pressure from clients, but primarily because of an internal desire within the firm to provide our clients with an innovative, cost effective solution to the legal problems they are facing. As far as the legal profession is concerned the recession/credit crunch is the most significant event by far over the last ten years. Corporations are now bypassing law firms and going directly to LPOs and contract lawyer agencies. As far as billing inflated, junior associate hourly rates for routine document review work, clients are now routinely saying to us “we won’t pay those fees to do this type of work”. I have personal experience of clients saying exactly that to me.

As to why we went public, we wanted to have the first mover advantage, offering something to the market that is more efficient and cheaper. After the initial press frenzy, we discussed internally the comments circulating for example, on the website, and yes there was a lot of negative feedback, but there were many positive comments as well.

Many law firm partners I speak to privately acknowledge that they view LPO as a threat. An operating model that takes food from the table that has traditionally fed them. You don’t see it this way, do you?

The desire to provide our clients with added value is paramount. Our model going forward will involve fees for the management and supervision of the services since we are taking responsibility for the work, we are supervising the work and we are assuming the risk. Of course this is all done with our clients’ consent and agreement. I see this as a way for the firm to make money and save our clients cost –a win win.

You’re in Cape Town right now, getting the ball rolling, so to speak. What particularly attracted you to South Africa as opposed to say India or the Philippines?

Correct, I am in Cape Town for an initial period of two weeks recruiting two team leaders and to all intents and purposes training the trainer. We chose South Africa because of our own existing relationship, the availability of common law trained talent, and the time zone similarity. Initially we are looking at document review work, however if it is successful, this might be expanded further to include other practice areas.

Mark, you mentioned that initially you are focusing on document review. Why did you choose this practice area as opposed to any other?

Document review - certainly at "first pass" level - is a relatively low level exercise. It is carried out by paralegal and junior staff already and the only issue has been supervision. A low level exercise that can be done by junior staff subject to the right supervision is ideal for offshoring. It is possible that we will expand the range of outsourced services in the future.

As I understand it, unlike in the U.S. there are very few, if any, domestic based providers of large scale document review staffing services. Do you have any thoughts as to why this might be the case, and do you anticipate that this market will also develop domestically?

Electronic disclosure is relatively recent in the UK compared with the US. The market is therefore less well-developed. Furthermore, clients have been happy to have all aspects of the litigation or investigation process carried out by one firm on UK soil (or at least within a branch network environment). However, the volumes of ESI have been increasing substantially which has in turn increased the legal costs. That combined with the economic downturn has been sufficient to bring about change. There is every chance a market will develop domestically as there are many lawyers now out of regular work who if innovative might look to develop this area.

What has the feedback been like within the firm following the announcement?
As regards internal feedback I have already conducted a couple of roadshows and will be doing several more following my return to the UK. We have received mixed reactions ranging from “we’re exploiting poor people in Africa”, to “are people in the UK going to lose their jobs”. We have explained to our employees that neither is the case.

If I can indulge you for one final question, and please feel free to prophesize, looking into your crystal ball, where do you see the document review practice area, the LPO industry and the legal profession as a whole five years from now?

There is no doubt in my mind that the volumes of ESI is a real problem. The volumes are continuing to increase and I see no reversal in that trend in the next 5 years. What will change is how corporate clients and their advisers will respond to the problem, which has been an ever increasing problem for 5 years or more. A more targeted and proportionate approach will develop and the use of technology will increase. Technological development may automate more of the document review process but it cannot be completed without some human intervention. The Courts will require the parties to adopt suitable technology and will penalise lawyers who do not. Document review will become more organised, streamlined, acutely measurable and hence increasingly commoditised. Document review will perhaps therefore become a specialist area for specialist service providers. The technology companies may also expand their services to offer review services.

As far as the LPO industry and the wider legal profession is concern, we’re looking at a serious restructuring of the profession, driven by the market. You can’t just withdraw from the market. The market will decide. We will see less people employed on a full-time basis, more people employed on a project basis, some firms will merge and some will go bust. As far as LPO is concerned I believe the industry is set for huge growth.

About The Author

Mark Ross is a UK solicitor and Director at LawScribe, one of the world's leading legal process outsourcing companies. Mark is Chapter Chair of the International Association of Outsourcing Professionals (IAOP) Legal Outsourcing Chapter, and a regular speaker at legal conferences on the subject of legal outsourcing. Mark has had numerous articles published by leading legal journals including American Bar Association, Association of Legal Administrators, ILW.COM and IAOP. Mark's blog has become one of the leading resources for information relating to offshore legal process outsourcing.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.