Top 10 outsourcing predictions for 2010
We've got some legal process outsourcing (LPO) predictions in from a US outsourcing consultancy called Fronterion – not sure if we fully agree with all of them as we reckon UK law firms are being more adventurous than their US counterparts when it comes to outsourcing – but here you go, food for thought…
According to market research carried out by Fronterion, more than 85 per cent of LPO vendors are located primarily or exclusively in India. However, increasing interest in South Africa will make it India’s leading competitor for legal outsourcing in 2010, especially for law firms in the UK, which benefit from concurrent time zones, shared cultural affinity and a maturing vendor landscape. While currently a minority percentage of LPO vendors are based mainly or entirely in South Africa, South Africa and the Philippines will continue to build on their positions as prominent offshore destinations.
Fronterion say other market‐changing developments to emerge in 2010 include: the rise of LPO as an attractive alternative career path for legal professionals as pay and prestige increase; increased transparency around the LPO industry, including possible additional ethical guidance from industry bodies such as the American Bar Association; and a shift in the role of the lawyer from providing pure legal advice to managing the procuring of a number of different legal functions both within and outside the traditional law firm structure. Fronterion managing principal Michael Bell says “The year 2010 will be an exciting and watershed year for outsourced legal services. The economic volatility over the past year has caused legal professionals to step back and genuinely assess how they are providing and procuring legal services for their organisations. In 2010, legal outsourcing will be an increasingly important factor in these decisions.”
The Top 10 Trends for Legal Outsourcing in 2010 are, in brief:
1) A dynamic legal landscape. Economic pressures and the changing regulatory environment will continue to put pressure on organisations to turn to outside vendors.
2) Alternative legal delivery. Traditional delivery of legal services are unbundled allowing firms to offer clients new, streamlined services and create greater efficiencies.
3) Shift in focus. Legal organisations will take a more strategic approach to their outsourcing arrangements as opposed to an ad hoc, cost‐focused approach.
4) Expanded work flow. Projected increases in litigation and rising economic activity will prompt organisations to source more work to LPO vendors.
5) A proving opportunity. In 2009, legal outsourcing caught the media limelight. 2010 will be the acid test for the legal outsourcing industry, when it must prove its value to new consumers.
6) Engagement structures. For 2010, the primary avenue for law firms and corporate legal teams to participate in outsourcing arrangements will be through third‐party vendors and virtual captives.
7) Emerging sourcing destinations. The leading LPO location India, will face competition from emerging nations like South Africa and the Philippines.
8) Dynamic vendor landscape. Increased competition as traditional business process outsourcing (BPO) providers ramp up their LPO capacity. Mid‐size LPO providers face a choice between consolidation and specialisation.
9) Talent Development and Migration. As legal outsourcing vendors gain prominence in 2010, they will have much greater access to talent as more lawyers consider outsourcing as a genuine career path.
10) Industry Transparency. 2010 will mark an increased focus on transparency that will result in more efficient markets and heightened credibility of legal outsourcing initiatives for both buyers and vendors.
For full details of the Top 10 Trends for Legal Outsourcing in 2010 see www.fronterion.com/TenFor2010