http://www.youtube.com/watch?v=cv8o3LM8gm4&feature=youtu.be See the video here The Bingham McCutcheon announcement has stuck in my head …"/>

Bingham: Saving $22.5m for any Amlaw 100 firm – LPO/Legal Outsourcing

If not now, when?

http://www.youtube.com/watch?v=cv8o3LM8gm4&feature=youtu.be

See the video here

The Bingham McCutcheon announcement has stuck in my head for the last week or so. I know that every client situation is different, but I also thought the legal world had changed.

Here’s why I have issues with their strategy.

Turning the clock back a few years, the funding situations of law firms (as with the rest of the world, I guess) was a lot more stable than it is now. While the Dewey event is likely to be a very large one-off, I had expected it to focus Law Firm leadership on one thing – growing profitable, value-add business.

While moving 250 staff to Kentucky can certainly be a model for cutting costs in the long term (and winning more work based on price), it is an expensive way to do it. I’d always thought that spending $22.5m would be about growing high value, profitable work, not doing lower value-add activities more cheaply.

Our 2012 Global LPO study clearly showed that GCs are valuing Law Firms’ lower-value activities more as a commodity, with alternative sources able to deliver them better, faster, and cheaper. This is a battle that I don’t see Law Firms winning.

What startles me more is the time between “Flash” (making the decision and starting the spend) and “Bang” (getting the benefits from the spend). This means that the entry point to those lower costs is 12 months away, and that is just the start of the journey.

Next there is the issue about when an internal delivery option will actually reach optimal levels. In years of doing this, the internal option takes 12+ months longer to get to a good standard of delivery. The more time that I spend with Suppliers, the more I realise that even that level is way below what the specialists can deliver.

Strategically, Bingham are actually creating an asset that can be easily sold off at the right time. In the Shared Services sector of the Corporate world, this has been a common route. Fortunately for Bingham, the sheer lack of similar capabilities in the US makes it a valuable asset.

However, $22.5m later, the strategy leaves them with no Offshore option for their clients and consigns them to many years of Executive focus and $$$ getting to a level of quality that they could have bought, off the shelf, today.

To close, at least Bingham have made a strong, bold move. They are still ahead of 90% of their competitors in taking a strategic approach to the real threats. More will follow…

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