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Legal Outsourcing

Opportunities and Issues


ALM Web Audio Conference May 16, 2007

Ron Friedmann Prism Legal Consulting, Inc.


ron@prismlegal.com 703.527.2381

Agenda
Why Outsource? Delegation v. Outsourcing Legal Outsourcing Today Guidelines for Success The Future

Why Outsource
Cost Skills availability Quality Turnaround

Delegation v. Outsourcing

How Lawyers Work

Specialization (Adam Smith)


Efficiency, effectiveness Domain expertise

Delegation
Common once a firm has more than a few lawyers Legal and non-legal tasks

Administrative Delegation
Secretaries Landlord Facilities

Copy center, mail room, food service

Payroll service Benefits administration Secretarial

Substantive Delegation

Finders, Minders, Grinders


Find business Mind relations Grind out work

Lawyers already delegate In larger firms

Granular specialization Cross-office work Human resources may be far away

Delegation v. Outsourcing

Admin

The line has been crossed long ago

Substantive
Delegation outside the firm is not so different than in the firm Both require process, control, and QC

Legal Outsourcing Today

Administrative Outsourcing
Payroll Insurance and benefits Document keying Facilities Travel Catering IT Secretarial

Substantive Outsourcing
Objective coding Legal research E-discovery

Collection Processing Hosting

IP support Contract lawyers

Domestic Locations
Big cities Small cities Nearshoring

CBF in Fargo Orrick operations in WV (insourcing)

Offshore Locations
Chile Hong Kong

India

Mauritius New Zealand + Australia Phillipines Sri Lanka

Source: Outsourced Legal Services, Prism Legal

Why Offshore?
Talent Availability Cost Turnaround

Offshore Examples
Contracts Dictation + transcription Document review Due diligence IP Legal research Litigation support Secretarial

Whos Offshoring
Corporations Law firms Owned, captive, vendor

Examples

Corporations

Accenture, American Express, General Electric, Microsoft, Morgan Stanley, Motorola, and Oracle
Allen & Overy, Clifford Chance, Bickel & Brewer, Milbank, Orrick 70 vendors at Prism list

Law firms

Vendors

Guidelines for Success

Guidelines - 1

Document your requirements


Specify deliverables carefully Fix process before outsourcing Consider need for SLA

Screen and vet suppliers


Processes Management Reputation + references

Guidelines - 2

Ramp up slowly
Test, test, test Verify deliverables

Metrics and feedback loops Change management

Risks
Performance Quality But compare to alternatives!

Your own lawyers and staff Domestic providers

The Future

Tasks Most Likely to Move


Document review Simple to moderate drafting Due diligence More IP

Limitations
What limits? Talent Transaction costs

Indias Edge Goes Beyond Outsourcing


Headline: NY Times, 4/4/07
increasingly the jobs of Western white-collar elites in fields as diverse as investment banking, aircraft engineering and pharmaceutical research have begun flowing to India and a few other developing countries
As Indian back offices become more sophisticated, Western companies are finding that large parts of their work, even high-end tasks, can also be done from India.

Issues
Ethics QC Marking-up rates Where is the line?

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