I have to admit to divided and confused loyalties. As a Scot living in New York, but spending a good chunk of each month back in the UK, I can at least pretend to be impartial. With that perspective, it is surprising to see how far ahead the London law firms are when it comes to Legal Outsourcing/LPO compared to their New York equivalents.
The difference is black and white. New York law firms have largely ignored Legal Outsourcing, except on a tactical basis; London firms have openly investigated and adopted strategic approaches to Legal Outsourcing (with a range of delivery models chosen – see future blogs).
As our Global LPO Research showed, (you can buy it at http://thelpoprogram.com/), there is a significant shift in buying patterns as General Counsel move to buy transactional services from LPO Suppliers. This move is large already, but is only the start of a massive sea-change in GC’s behaviours.
So, why are NY and London law firms so far apart in their strategies.? To keep it short, the answer is partly the economy, but mainly the liberalisation of the UK legal markets. While, stating the obvious, liberalisation of the US legal markets has not happened, the facts are:
- NY law firm clients are facing even greater cost pressure now – and that won’t change in the short term.
- GCs are already changing their buying patterns away form law firms – and this trend has only just started
- As a recent conversation with a Harvard law professor reinforced, liberalisation of the legal market will happen in the US. It won’t happen this year or maybe even next year, but it will happen
While the London legal market is by no ways at the end of its evolution, there really are some great lessons to learn from the London firms. First and foremost, NY law firms have a chance to use LPO strategically, and use it now, to grow their business. Moving from a Tactical to Strategic approach in 2012/13 means accepting that change is and will happen in the legal market – it is a question of whether you want to be prepared for the change in the market or have to play catch up at some stage in the future.
Our clear view is that there are unusual, and never to be repeated market opportunities for innovative NY-based law firms. It is just a question of when, rather than if, they have to copy the London model.
Contact [email protected] to understand what steps you can take today.