Outsourcing Adviser: Law Firm Helps Clients Manage LPO Services
Posted Dec 1, 2012 2:00 AM CST
By Deborah L. Cohen
Yuson & Irvine is betting U.S. companies could use a little help navigating the increasingly thorny world of legal process outsourcing.
The boutique law firm, which specializes in helping clients wring efficiencies from their legal operations, launched a practice dedicated to LPO management in June. Services range from assistance selecting appropriate vendors to soup-to-nuts development of an LPO strategy and oversight of the work.
“What I’m doing is sitting down with clients and walking through what their particular goals are for their outsourcing initiative,” says Kevin Colangelo, managing partner in charge of the New York City-based practice. “I’m scoping out what is it they want to do, what activities are they going to give to this company, … making sure internally we’ve asked the right questions.”
Colangelo says there is often a gap between objectives expressed to the LPO vendor by a company’s general counsel and the younger lawyers charged with overseeing that service provider on a day-to-day basis.
“We go through this in a 360-degree manner,” he says.
The firm’s move comes at a time when LPOs are increasingly gaining ground. Corporations’ external spending on alternatives to law firms is set to increase from a current 8 percent of their outside legal budget to 10 percent over the next two years, according to a recent poll from Acritas, a market research firm specializing in the legal industry.
“No longer are [companies] sending the bulk of high-value work out to a top-tier firm, but they are thinking more carefully about the appropriate quality required for each piece of work and where efficiency can be achieved,” says Elizabeth Duffy, an Acritas vice president. “Essentially, clients have more choice of legal suppliers.”
And as LPO services move higher up the food chain from commodity offerings such as e-discovery to more complex functions like contract drafting and diligence for mergers and acquisitions, Colangelo says it’s increasingly important to ensure that companies identify service providers with a strong cultural fit.
He should know. He spent six years helping to build Pangea3, the LPO pioneer that has grown to become the world’s largest global provider of such services. Pangea3 was bought by Thomson Reuters in 2010.
Colangelo—who says Yuson & Irvine is the first law firm to develop an LPO management practice—is focusing on industries ripe for LPO growth, including banking and pharmaceuticals.
“There’s an urgency around those entities that are highly regulated because so much is coming at them,” he says, noting that recent regulations such as the Dodd-Frank financial reform act have added to the burden of legal diligence. “They’re pouring money out the door to keep on top of it.”