Support Services Outsourcing: Understanding the Processes, Mehtodology and Lessons Learned. That’s the topic of a panel discussion at the ALM Outsourcing Conference 10am session.
[This blog post comes to you live from the ALM-sponsored Legal Industry Outsourcing Forum (May 23, 2007, NYC). Notes and comments are real time with minimal editing and posted as a session ends. I am taking notes in Microsoft OneNote, so use the outlining format.]
1. Panelists (full details here)
a. Moderator: Jim Lantonio (Visiting Professor, Stony Brook University; former Executive Director, Milbank Tweed)
b. Jason Brennan (VP, Legal Services, Office Tiger – OT)
c. Sal Curreri (COO, Mandel Katz – MK)
d. Patrick Fogarty (VP, Business Development, William Lea – WL)
2. Introduction by Lantonio
a. Outsourcing has been around for a long time
b. Already in the 1960s, Archer Services started with bicycle messengers. It eventually evolved into duplicating and other services and into bigger companies
c. Offshore outsourcing is just another phase in the gradual development of outsourcing
i. In the 1980s, law firms resisted outsourcing inhouse copy centers
ii. Lawyers worried about letting non-employees have access to confidential documents
iii. Today, this is a non-issue
iv. But now we have the same reaction to sending work to India
d. Market is at a turning point now
e. Wants perspective of suppliers (Office Tiger and William Lea) and of customer (Mandel Katz)
3. Williams Lea perspective (Patrick Fogarty)
a. Williams Lea in business since 1820; started as financial printer. Become full business process outsourcing company in 1980s
b. W-L is now a corporate solutions company – people and process enabled by technology
c. Services: office document services (eg, copying), IT (help desk, asset management), word processing and document production, litigation support (scanning, coding, e-discovery / EDD, data mining, forensics)
d. Lantonio asks about W-L onshore capabilities
e. Fogarty says many law firms resist going offshore
f. To respond to this, W-L acquired Orrick’s word processing operations in Wheeling, WV
g. This has been a terrific success – over 100 people in Wheeling. Serving 3 firms now; 3 are about to commit
h. W-L need to leverage labor arbitrage but keep jobs in US
i. The challenge is to demonstrate value of outsourcing to law firms. One or more years into the deal, you can begin to introduce the offshore element (though the interface is still with US personnel).
j. Domestic / onshore aspect works well and continues to grow
4. Office Tiger perspective (Jason Brennan)
a. Cultural differences among firms are significant with respect to preferences of onshore versus offshore
b. O-T was originally more offshore (India and Philippines). In response to customer demand, we now have onshore capability
c. Surprised at the number of firms that are not even interested in domestic option
5. How firms respond to letting go of work (Sal Curreri – MK)
a. One response to confidentiality issue: many internal word processors are actual freelancers. (One partner, when told that, said “I wish you hadn’t told me that.”)
b. Biggest lesson in years of outsourcing experience: the law firm manager still owns the process, costs, and the results. Law firm manager must be engaged with the service and communicating changing needs to outsource provider.
6. How should we deal with objection of taking jobs away from Americans?
a. Brennan (OT): I don’t hear that argument very much anymore. I do hear concerns about what will happen to long-standing employees
b. Fogarty (WL): Agrees that law firms don’t focus on this consideration. With big financial concerns having their own operations in India, many objections have dropped. Concern is more about managing data security and controlling the spin of the outsourcing deal. Firms want to avoid any negative PR. As clients outsource, law firms have less basis to object
7. Quality issues – he found offshore quality was BETTER than domestic work. It took a while for lawyers to internalize this. Yet a perception continues that offshore quality is not as good. Some of this perception stems from call centers based in India and personal / consumer negative experiences with customer service based in India. How do legal process offshore companies (LPOs) deal with this issue?
a. WL: this perception is definitely an issue in LPO space. There are cultural differences. One step we take is having Brits or Americans running operations in India. WL also has domestic facilities that handle many customer facing interactions. One step to take is to have law firm customers visit domestic operations centers. Our clients have experienced increased quality and service. The outsource and offshore model allows law firms to provide the same level of service across far flung offices.
b. OT: Most of our engagements involve onsite personnel. Lawyers and staff typically interact with someone locally. You have to deal with this issue in the planning and negotiation stage. We have to coach law firms not to think about outsourcing people. The focus needs to be on tasks and where each task is most efficient to perform. Even when looking at the call center world, the airlines, Dell, and others have not retreated from India even with the widely publicized problems – they have modified how they operate.
8. There is a perception that outsource services are targeted at very large law firms. There are now more than 1 million lawyers in US. 60% are not in major metro areas or in big firms. Can LPO offer these 60% outsourced services?
a. WL: Law firm consolidation will not end, so firms will be bigger. We can also re-scale our services. Even some of our work for large firms starts with small jobs. We are learning to say no to some of these “opportunities.” We are likely to evolve our services to be able to offer them to smaller law firms.
b. OT: There always has to be some scale to make outsourcing pay off. Big firms initially came to us to save money or faster turnaround. I now see mid-size firms coming to use for resource availability. They don’t have the scale to have 24×7 service centers. Many firms still have silo support services – all services local in all offices. Some are now seeing that model makes no sense – they want to consolidate. Or they don’t offer these services in all offices and want to do so.
c. Audience member: a few mid-size firms are coming together – almost as a co-op – to have joint outsourcing services. Three firms of about 300 lawyers each are doing this. They are overcoming confidentiality issues and making the joint effort work.
i. OT and WL think this model is not common and will not work widely. Too much concern about confidentiality; scalability is harder across organization