A partner in a Silver Circle firm comments:

Was noticing that while your site is very detailed in some areas, your discussions, views etc on LPO [legal process outsourcing] are very light. Although you could say that Susskind’s views overlap here? But is this deliberate from you? It seems to be finally moving and I would be interested to hear readers views. I work for a UK based Silver Circle firm although am planning to retire in 12 months and I have noticed the huge shift in the views on LPO from my partner colleagues. Where before it was a “good God no,” we are now looking at “what shall we give them” and “when shall we start.” I am not anti the idea at all and there seem to be some good firms out there, but it almost seems a bit under the radar. The corporates profess to be doing it, but the law firms are if not embarrassed then secretive in a furtive, hiding my drug habit sort of way. Is this your view of it, or is this just in the areas I mix.

So how many firms currently have the outsourcing habit? Are they outsourcing just back office functions, or is there significant legal process outsourcing going on? How much of the work is going offshore where the economies are greatest; how much staying onshore in the UK and Europe? And if there’s so much of it about, why are they being so secretive?

Legal Week recently published an Outsourcing Guide, describing how firms can best go about using legal process outsourcing to their advantage. The article cites a couple of examples of firms shifting substantial work offshore:

Magic Circle giant Clifford Chance has led the field by moving back office and secretarial support to its own office in India, in order to carry out much of the company’s administrative work. The outsourcing programme is expected to yield more than £9.5m in annual savings. Similarly, Pinsent Masons announced a deal to offshore its bulk typing and transcription services as part of a move to change the role of its secretaries.

An undated article in Outsourcing Times describes Clifford Chance’s operation:

In contrast to outsourcing efforts by other Magic Circle firms, Clifford Chances Indian staff are all direct employees of the firm. Its all fairly small,scale compared with what financial institutions have done, [with] 100 people in New Delhi … Two senior members of staff … have relocated to India to manage the office. By keeping the facility part of Clifford Chance, the firm maintains direct control while taking advantage of economies of scale.

The question for Clifford Chance is how much of its business it can transfer overseas. So far it has only moved IT and accounting operations out of London, with New York and Germany next on the list. … Outsourcing specialists … suggest that paralegal work could be handled from a lower cost base offshore; marketing materials or pitch documents could also be prepared from a remote facility.

The article must be somewhat out of date as Freshfields Bruckhaus Deringer currently says this about its outsourcing:

Our global outsourcing practice is one of the largest and most experienced in the legal sector and handles a wide range of transactions on both the customer and supplier sides. We have managed some of the most complex and international transactions and our work includes IT and business process outsourcing. We apply our strong M&A execution capability to ensure these transactions are structured effectively and run in the most cost-effective and commercial way.

It’s not all one way traffic. In the comments to the Legal Week article, Richard Bate of Voicepath cites an example of a firm moving work back onshore because of cultural and ethical factors:

Vizards Tweedie selected an offshore outsourced transcription company as its principal supplier but soon found the service had limitations. A spokesperson from Vizards told us: ”While there was a minimal time difference, we found that cultural factors still had an impact on the quality of transcriptions we received. Little things like typists not being able to spell ‘Piccadilly’ proved annoying, especially when we had paid the supplier a premium to give each document a second proofreading. More significantly, we also encountered a certain amount of internal resistance from fee earners, who had ethical reservations about sending work abroad. They felt that such work should be retained in the UK.” Consequently, Vizards began looking into the transcription options available closer to home and now employs our services.

And the Outsourcing Times also refers to the benefits of outsourcing IT closer to home:

Outside the Magic Circle, Eversheds has undertaken one of the most ambitious outsourcing projects, signing a deal last December [year?] with European IT services provider Computacenter plc to outsource a large chunk of its IT operation. … the move [was] largely cost-neutral. Instead, the drivers were access to more sophisticated IT systems and a realization that the IT function could be managed better by a dedicated supplier. … Although Eversheds hasn’t moved anything offshore, [they plan] to visit India later this year to assess various options. There is a hint of inevitability about it.

So that’s just a taste of what’s going on. Updates on these examples and other law firm outsourcing examples would be welcome.