Today inhouse counsel at Sun Microsystems shared hands-on experience with legal outsourcing. This is the best legal process outsourcings (LPO) presentation I have seen to date by an actual customer. 

The Legal Process Outsourcing Chapter of the International Association of Outsourcing Professionals today held its second webinar, chaired by Mark Ross of LawScribe (his recent blog post describes the event).

Connie Brenton, Assistant General Counsel for Sun Microsystems, provided an in-depth case study of Sun’s decision to offhsore a large-scale document review project, from the search for the provider through the RFP process and concluding with Sun’s analysis of the projects outcome. High points of her presentation include:

  • The drive to reduce cost motivated Sun to look at outsourcing starting in 2005 and to travel to India in 2006 to learn more about providers.
  • The first offshore project in 2006 was a contract review. It did not go well but Sun learned many important lessons about how to outsource. {Editorial note: corporations understand that problems are learning opportunities, not failures; law firms find this idea difficult.}
  • The second project was much better because Sun provided and required much more training and process guidance. Sun looked beyond the management of LPOs, who are often experienced US-trained lawyers, to assess the skill level and training of Indian lawyers. Sun also provided a project manager and contract templates. {Editorial note: Ms. Brenton did not use these words, but it sounds like first project was classic “lift and shift” outsourcing, which almost always fails, and second was a re-thinking of how to use different resources to do work a better way.}
  • Beyond the savings from labor cost arbitrage and process improvement, Sun cut costs even further through a “dynamic bidding event” (DBE), a real-time, web-based process in which providers bid on the work. Total savings of offshoring coupled with DBE were 78% relative to budget. Project was “wildly successful.”
  • Sun continues using LPOs. This year, it improved its approach, refining task delegation, pricing, and how it prepared and presented requirements to the LPO. In evaluating vendors this time round, Sun saw that leading LPOs are very flexible and highly sensitive to quality results.
  • The company is committed to continue using offshore resources. Sun may insist that is US outside counsel work with offshore providers.

The process Ms. Brenton laid out is a great road map for other law departments that want to outsource.