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Crunch drives LPO activity

The credit crunch is driving an upsurge in LPO business enquiries, according to a major law publication. Legal outsourcing specialists have said that law firms are using LPO as a means of relieving pressure and lowering fees; meanwhile, companies are actively publicising how much work they are farming out in order to show that they are cutting costs.

This trend falls in line with findings in a recent Eversheds report, Law Firm of the 21st Century – compiled from interviews with partners, in-house counsel and clients – which emphasises cost savings and international activities as key factors in the new legal landscape.

Asked what they thought was the greatest challenge for leading law firms, 41% of clients said that it would be for lawyers to control costs and justify their fees. An anonymous client was quoted in the report as saying: 'The demands [law firms] have made in terms of their fees in the past few years are simply enormous and it can’t go on [forever].'

Over half of the clients surveyed considered that lawyers should be able to tailor their services to suit individual businesses rather than continue to be dependent on briefings: a change that would make them more commercial, and more conversant with the commercial world. Fortunately, 36% of partners felt that internationalisation was as important as client retention, and that meeting the demands of global clients would continue to be an important challenge. These results hint at productive conditions for the emerging LPO market.

Andrew Loach, vice-president of business development for leading LPO firm, CPA, said: 'Law firms recognise times are getting tougher and clients are demanding more creativity when it comes to billing.'

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