LegalWeek last week published a survey of UK partner views on LPO. Partners seek new models but wary of LPOs opens “City partners increasingly believe the law firm model will have to be overhauled but remain sceptical that legal process outsourcing (LPO) will be a major part of the revolution.” First the findings, then comments on the survey, and finally the implications. 

Key Findings:

  • GROWTH. Asked about LPO growth prospects, 13% see “major prospects for growth” and 34% “considerable”. The remaining 53% expect little or no LPO growth.
  • QUALITY. Over 50% think LPO work quality “could be better”, 7% found it poor, 14% “good”, and 27% “ok”.
  • SERVICE LEVELS ONSHORE v OFFSHORE. 36% think service levels in the UK are “much better” than offshore; 38% “better”; 19% no difference among locations.

Comments on the Survey Instrument (or why you may not want to trust it)

This survey strikes me is yet another legal market survey of questionable validity:

  • LegalWeek provides no breakdown of who responded, so readers cannot determine if the sample represents the market.
  • Qualitative answers such as “considerable growth” and “major prospects for growth” are too open-ended. Respondents might, for example, have had in mind anywhere from 20% to 100% for either answer. It should have asked using numbers, for example, “More than 40% growth” and “Between 20% and 39% growth”.
  • Without knowing how many respondents have used LPO services, the results may merely reflect what respondents think other people in the market think.

Analysis Assuming the Survey Results are Valid

Let’s assume the results accurately reflect the large law firm market sentiment. In the old normal, meaning pre-economic crash, I would have said the mixed results could not last long. Large law firms in the US, UK, Canada, and Australia followed similar strategies: open multiple offices, merge, invest in similar technologies, build marketing operations, increase leverage, etc.

So if past is prologue and the new normal is like the old normal, then I think these results suggest LPO is tipping toward fairly wide spread adoption. Answers here could easily, with a bit of language tweaking, have been applied at one time to use of e-mail, law firm marketing, and doing e-discovery. As each of those new approaches started, lawyers were widely resistant and skeptical (and like, with LPO, typically without any first-hand experience). My rule of thumb: once a new thing gets to the point that major legal publications run just this type of survey, it almost inevitably means wide-spread adoption cannot be that far off.

Past may not be prologue. In my Integreon blog post last week, Law Firms Differentiate in a New Era I suggested we may see large law firms following different strategies. If so, then the survey could mean that LPO will only be adopted by some of the market. Then I would guess ½ of firms would adopt LPO based on the answers to the growth question and the fact that availability of onshore services will grow, which will satisfy those who think onshore offers better quality.