Moving with the times – outsourcing: why GCs can't have their cake and eat it
If someone were to set out now to create a new elite City law firm from scratch, chances are it would bear little resemblance to the form most leading UK firms currently take. Junior staffing levels, remuneration systems and equity partner numbers would all be very different to those commonly in place today.
April 18, 2013 at 07:03 PM
3 minute read
If someone were to set out now to create a new elite City law firm from scratch, chances are it would bear little resemblance to the form most leading UK firms currently take. Junior staffing levels, remuneration systems and equity partner numbers would all be very different to those commonly in place today.
Consultants, of course, would argue that firms should be taking radical measures now to create a law firm fit for the future, irrespective of the potential fallout. But regardless of what would be best in the long term, there is a limit to how far firms are willing to move – and certainly how quickly.
Just look at outsourcing. Recent years have seen numerous firms adopt some level of outsourcing, and yet the stigma around the issue refuses to go away. CMS Cameron McKenna's decision to outsource the bulk of its back office functions to Integreon has always been controversial. Hence naysayers pouncing on news that its contract – along with that of Osborne Clarke – is being scaled back.
In addition to attracting a flurry of comments online, partners have also expressed their doubts about outsourcing in our Big Question survey this week, arguing external companies simply cannot compete with firms' own offerings.
And this resistance, compounded by a fear of reduction in quality, is inevitable given it appears to be shared – and perhaps even driven – by the in-house community, as demonstrated by our in-house feature this week.
But let's be practical. Not only should law firms be moving with the times in the same way as any other industry – which could well mean accepting that their strengths lie in practising law and leaving administrative tasks to others – but general counsel also need to be more realistic.
The whole more-for-less challenge is well-documented. Corporates want to continue to employ the same firms, in the same places, to carry out ever-more international work. But they want all of this for less money. And then on top of that, they want to restrict how firms make use of outsourcing?
Clearly they can't have their cake and eat it too. Something has to give and BPO and LPO – or, at the very least, own-firm near-shoring ventures which strip some of the costs out of London – are the inevitable consequences of squeezing pricing.
Given cost pressures will always exist, experiments in outsourcing will continue, with the types of service on offer from external providers getting more sophisticated. So everyone – law firms and in-house counsel alike – may as well embrace it.
That's not to say there can't be criticism. But the focus should be on what providers are doing right or wrong and how they can improve, not on indiscriminate condemnation of the concept.
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