Another large law firm announced today the opening of a low-cost service center. Torys is opening in Halifax. The Globe & Mail in Bay Street law firm launches legal ‘incubator’ in Halifax reports that the
“office will be charged with developing new, more efficient ways of doing this kind of legal work that can then be rolled out across the rest of the firm… From the start, it will charge only fixed fees, with the hourly rate banished – a revolutionary move for a major law firm”
Consider this on top of prior 2014 announcements:
- DLA Piper consolidated document production in Leeds
- Sedgwick announced a 100-seat center in Kansas City
- Reed Smith expanded its Pittsburgh support center by 17 heads to support its European office
- Hogan Lovells opened a 20-lawyer center in Birmingham, UK and a staff center in Johannesburg
- Berwin Leighton Paisner opened a center in Birmingham, UK
In September 2012, after Bingham opened a low -cost center in Kentucky, I asked if the “BigLaw market will soon tip in favor of centralized services, whether in an owned-and-operated low cost center or via a third party outsourcing provider?”
Since then some 10 firms have opened low cost centers. Doing so now does seem the norm. The surprise is most firms build their own centers rather than outsource. Arguments to outsource include avoid capital outlay, achieve scale economies, create the option to tap multiple locations, and gain from a specialist’s process and technology expertise.
So, are low cost centers now the norm? And why haven’t more firms outsourced? Comments welcome.