Held by a division of Saïd Business School (SBS), Globalisation of the Legal Profession examined the range of challenges that international law firms are currently facing, drawing ideas from a mixture of speakers from industry and the academic world.
SBS's Centre For Professional Service Firms – sponsored by specialist IP law firm Novak Druce – hosted the event. Speaking to IP Review Online, the centre's research director, Chris McKenna, said: 'The big news was that medium-sized firms are faring better than expected. We thought that the [recession's] squeeze would hit the middle firms, but they are actually doing quite well.'
That trend was underlined in a talk between five law firm chiefs. McKenna said that the discussion 'revealed a lot about the role of small or medium-sized law firms in the legal market, and how they are pursuing globalisation. The key point was that there is now so much diversity in the market that we are unlikely to see the dominance of three or four law firms that everyone had expected'.
According to Professor Mari Sako, who mediated the talk Opening and Transitions in the Indian Legal Market, LPO could be stimulated by another area of legal business. 'Litigation financing, where specialist companies subsidise clients' legal fees in return for portions of recovered cash, was mentioned as a potential step-change that could provide people with enough money to use LPO as an experiment,' Professor Sako told IP Review Online. 'At the moment,' she added, 'it's not so much the Magic Circle firms, but the boutique and medium-sized firms that are more amenable to using LPO providers.'
On the ongoing question of Indian liberalisation, Professor Sako revealed that clients could have a tangible influence on the process. 'When discussions turned to deregulation of the Indian legal market,' she said, 'timing was not thought to be as important as client organisations actively lobbying the Indian government for change. Everybody is waiting to see whether there will be a big shift to LPO, or whether law firms will continue to use LPO providers at the same level. If the markets do open up, though, LPOs and Indian law firms could end up playing quite similar roles.'
IP Review Online asked Derk Kropholler, vice president of business development at leading LPO provider CPA Global, to comment on the trends discussed at the event. 'Law firms should view LPO as an opportunity rather than a threat,' he said.
'Clients are increasingly pressuring them to reduce their costs, or offer their services at a fixed price. General counsels are telling me that if their law firms were more pro-active about managing down their costs, including developing their own relationships with LPO providers to benefit the client, there would be less need for the corporates themselves to go looking for alternative legal services providers. In fact, the law firms that do offer such alternatives themselves can even increase their "share of wallet" with clients who are pleased that their external counsel have responded positively to meeting the clients' cost-saving needs. By offering LPO services for some of the lower level activity, they can focus on doing the work that attracted their clients in the first place – and getting more of it.'
On the issue of mid-sized firms, Kropholler said: 'Mid-sized firms need to make sure that they keep having an edge on the bigger firms who are all looking at outsourcing right now in order to keep their clients. Some are realising that LPO can make them more competitive by enabling them to scale up their resources to bid for bigger projects that they might not have previously considered.'
