Legal services fragmentation speeding up

The current economic crisis is accelerating the fragmentation of legal services, opening up further opportunities for outsourced legal support, says leading legal commentator Richard Susskind.

Speaking at the 2009 American Bar Association (ABA) Techshow, Susskind told delegates to be prepared for a period of dramatic change in the legal industry that will play itself out in tandem with the global slowdown. The changes he foresees are set to have an impact on IP-related processes that form the majority of outsourced legal work.

Susskind predicts that the traditional law firm model of bespoke services, customised for client needs, will be unbundled and broken down into a series of standardised products. As these products are teased out of the traditional mould, they will be offshored, outsourced or multi-sourced as appropriate, echoing the manufacturing process behind consumer goods. This proliferation of services is set to intensify the global sourcing market, he says.

In Susskind's view, the end of the economic crisis will not signal a return to traditional norms. 'When the storm lifts,' he told the Techshow, 'the terrain is going to look wildly different. What we're seeing courtesy of this dreadful economy is an acceleration of what many of us have anticipated in legal services. And that is the introduction of all manner of efficiencies, largely due to the impact of information technology.'

Jack Diggle, partner at Prince OMC a management consultancy that has advised on outsourcing contracts gave IP Review Online his reaction to Susskind's speech. 'I share Richard's vision of the industry,' he said. 'Law firms are under a lot of pressure from general counsel to deliver cost-effectively. This has forced them to look at legal processes with a critical eye and think about ways of dividing them up. It has also ratcheted up the pressure on firms going in for client pitches.

'It's still very early days and there's a lot of experimentation going on,' Diggle added. 'IP portfolio management does lend itself to commodification, and if any part of that isn't standardised, it should be. Enforcement or advisory processes will probably take longer to commodify. There are quasi-legal functions that law firms are looking at outsourcing, but firms are generally educating themselves fast about which parts of their businesses are value-added and which parts can be commodified. If you set up an outsourcing arrangement, the whole challenge of the contract is to retain control.'

If Susskind's vision comes true, that challenge will be heightened by a more diffuse legal landscape: one that will require shrewd IT skills to navigate. 'I believe that some version of social networking will come to dominate the way professional services are delivered and will transform legal services,' Susskind said in his speech. 'Clients are going to harness the power of online community, and much of the work that used to be distributed to law firms in a conventional way will be displaced by a community-based sharing of legal experience.

'Technology [is] coming to the heart of our society, the heart of our lives, the heart of the way we work. And I see no reason to think the legal world should be exempt from these changes.'