Demand for Legal Services Outsourcing on the Increase
18 Apr, 2011
Demand for Legal Services Outsourcing (LSO) is increasing, driven by cost savings and by in-house legal departments seeking to make the best use of their resources. But many companies say they need help in identifying and separating out the legal work that can best be outsourced.
These are some of the key results announced today by leading LSO provider CPA Global, following a poll at the recent Law Department Forum, held in London by the Practical Law Company.
More than 80 delegates attended a discussion led by Leah Cooper, CPA Global’s Director of Legal Services Outsourcing, on the evolution of LSO. During the session, Cooper polled the delegates, mostly in-house counsel, on their business priorities, including ways for legal departments to create value, and current attitudes towards outsourcing legal work to LSO providers.
The poll revealed that:
- Adding more strategic value to their business was the key priority for more than half of delegates (52%), with 29% pointing to increased efficiency and 15% to cost savings.
- Around 20% of delegates were already outsourcing legal services, while a further 53% said they were open to outsourcing in the future.
- However, an overwhelming majority of 93% said they would implement LSO if it could deliver savings of £10 million – savings that CPA Global has quickly made a reality for several of its international clients.
- Nearly half of delegates (47%) believed that making the best use of their internal legal resources was the greatest benefit of using an LSO provider, while 27% cited cost savings and 22% pointed to the ability to scale up for unpredicted large projects.
- 59% considered the main challenge of integrating an LSO provider into their organisation to be identifying and assigning appropriate work, while 29% said it was managing the relationship.
Commenting on the poll, Cooper said: “The findings show that in-house counsel are looking for solutions that enable them to focus on more strategic matters, thereby adding greater value to their organisations and optimising how efficiently they can deliver legal services. Many are already recognising that legal services outsourcing can help them achieve this.
“An effective LSO engagement is designed to handle the lower-level work so that general counsel can get back to doing the job they are trained for – advising on legal matters. LSO should not create more work for the client, but rather integrate as seamlessly as possible with the team and deliver value from day one.”
Cooper added that the poll highlighted some of the challenges of converting the high level of interest in LSO into actual engagement. “It’s not the why, but the how,” she said. “Some companies are not always sure how to go about separating out the work between the in-house team, external counsel and LSO provider. We’ve helped many clients do exactly that to ensure that the right work goes to the right people, optimising both efficiencies and cost. We work as an extension of the in-house legal team and experience has shown that we quickly integrate into the team.”