Lloyds banking group to move into legal process outsourcing?
This story first appeared on Rees Morrison's excellent Law Department Management Blog yesterday and is by guest author Bob Unterberger – www.lawdepartmentmanagementblog.com
…The UK financial giant Lloyds Bank is close to buying CPA Global,
one of India's largest LPOs. The New York Times reports that Lloyd's
will purchase CPA Global for about $700M. Neither Lloyds or CPA Global
have confirmed a final deal.
The Lloyds-CPA Global deal occurs just as there's an LPO industry
shakeout. The smaller uncompetitive “mom and pop” LPOs are closing
down. Many boutique LPOs, generally specializing in only one or two
practice areas, failed to find the sweet spot. Some of India's larger
Business Process Outsourcing companies (eg call center providers)
have shuttered their LPOs out of fear of providing poor legal services
to current clients (and killing the relationship) or frustrated that
the legal “cycle” doesn't provide the immediate returns that BPO does.
Or both. Finally, a handful of India's larger stand-alone LPOs are
fighting for outside funding, and many are losing the battle. It's
worth noting that the Lloyds-CPA Global deal puts an actual value on
LPO. LPO numbers are dominated by misleading industry reports.
The shake up has led to deals like Lloyd's-CPA Global. Next, look
for India's BPO global giants to take on legal services in a big way,
having learned the lessons of those smaller players who dove into the
• Orange Rag Comment: Given that Lloyds is in the middle of some totally incomprehensible UK government prompted restructuring following the RBS and Northern Rock bailouts, anything is possible. We like the comment about “mom & pop” LPOs as, by coincidence, yesterday the Rag was contacted by PRs acting for three one-man-&-a-dog LPOs we'd never previously heard of, all trying to pitch us stories and get a mention on our hallowed pages – prompting us to wonder whether there are now more companies offering LPO services that there are law firms using them. CPA Global is one of the largest players in this market and its European staffers include Derk Kropholler (ex Aderant) and Jason Hulme (ex Informa).