A few weeks ago RBS announced that they were only going to appoint Law Firms who had an LPO strategy. As a Scot (based in New York, but working in the UK every month) who advises Law Firms and General Counsel on their LPO strategy, the RBS story reminded me of how little attention I’d seen the Scottish firms pay to LPO (with one or two exceptions).
In theory, here is a Scottish bank that would not be able to appoint Scottish law firms to its panel. In reality there will always be work that RBS chooses to have done in Scotland, but the threat to Scottish law firms from LPO is here and it is real.
The line that RBS is taking is similar to that of many large corporates across all services, not legal services; they want their suppliers to demonstrate that they are using the most cost effective delivery mechanisms.
For Scottish law firms who want to supply services to any large corporate – in Scotland, the wider, UK, or globally – the question is going to come up more and more often, “Do you have a strategy for your use of LPO and do you embed LPO in your daily business practices?”
If RBS is asking that question this month, they will soon be followed by Lloyds, Standard Life, Barclays, etc. in the Financial Sector, and outside of Finance by companies like Aggreko, The Weir Group, Scottish and Southern, John Menzies, the Wood Group, etc. And don’t forget the research that Brodies’ presented 2 years ago that even the Public Sector saw Law Departments as being a priority to outsource.
LPO is an opportunity for Scots law firms, given their delivery location and what is happening in Northern Ireland. There is a short window of opportunity and firms like McGrigors, Biggart Baillie, Maclay Murray and Spens, Dickson Minto, Dundas and Wilson, and Shepherd and Wedderburn should understand exactly how big that opportunity is. For those that do, expect a big Pay Day 2-3 years down the line.