Skip to content

“Co-sourcing” – a Much Needed Lifeline for BigLaw?

May 21, 2014

The legal world becomes a far better place when you take deep breaths and surrender to the BetterLaw mantra:

Right people.  Right skills.  Right place.  Right price.

Those four very short sentences are your path to legal enlightenment, i.e., getting the most bang for your legal buck.  Better yet, and a sign that the universe is vibrating in oneness, the mantra works equally well for BigClient AND BigLaw – when done right.  When done wrong, or out of balance, your legal experience will be similar to to that of an inexperienced yogi pulling a hamstring on a poorly-executed Downward Facing Dog.

 

Lifeline

 

But sensei, the new legal world is so confusing, what path should we follow:  BigLaw, MidLaw, NewLaw, Outsourcing, Insourcing, Offshore, Onshore, Captive, etc., etc.?  And if we go with Offshore, do we choose India, South Africa, Ireland, Argentina, or Timbuktu?  How is this in any way better, or more simple?!?!  Sounds more like a recipe to add new layers of cost to an already incredibly expensive system.  Patience, grasshoppers, let’s not get too ahead of ourselves on our search for nirvana.  The answer for most BigClients and BigLaw, at least in the near-term, is the emergence of “co-sourcing.”

Co-sourcing relies on [outside] service providers creating dedicated teams within their own organisation to undertake the work for each specific client, working as an extension of the firm’s remaining office function, rather than as a completely outsourced substitute, with little or no contact.

Firms considering adopting this innovative approach, will often have accepted the benefits of outsourcing business processes, but may worry the quality and level of service delivered will not match that of the in-house support services, despite the potentially significant cost savings.

– Maxine Park, “Co-sourcing and the quest for greater profitability,” in The Global Legal Post

Ms. Park was specifically talking about back-office functions, but the same concept can, and is, being implemented on front-of-the-house legal work.  Successful co-sourcing is based on developing long-term relationships and emphasizes values traditionally associated with “partnering” rather than with “vending.”  Co-sourcing mixes internal and external sources to deliver services more efficiently, effectively, and at a lower price to the client, while at the same time allowing everyone to make a profit. Win-Win-Win.

Of course, for BigLaw, this means facing the new normal reality.  The days of wine and roses are over. The glory years decades of pillaging and plundering BigClients’ coffers are over.  You can no longer have teams of associates running amok on mundane tasks at whatever spine tingling price you deem sufficient to support your grotesque AmLaw PPP numbers.  You’ll now have to compete on the open market with hungry NewLaw players.  You’ll now have to deliver quality outcomes at a fair price.  No more blank checks.  Sit down, because this one will really be a gut punch, but you’ll actually have to put your clients’ interests first.  No, really.  No more lip service.

Now, I realize that most of you won’t be able to do this because of greed, arrogance, selfishness, inability to adapt, short-sightedness, infirmity, panic, etc.  You know who you are – all those firms in real decline, but who are desperately “cooking the books” to keep those falling profits appear the same.  But, de-equitizing partners, cutting support staff, raising rack rates to counter discounts, and freezing summer associate programs do nothing to address the underlying problem that the old legal model is in it’s final death throes.

All is not lost, however, and instead of going down with the ship, a few BigLaw firms are grasping the co-sourcing lifeline as a way to transition from the old model to the brave new legal world.  These intrepid and innovative few realize that co-sourcing allows them to utilize one of BigLaw’s core strengths, providing an end-to-end solution to BigClients’ legal needs, but now doing so at a fair market price.  Of course, to deliver at this competitive price, they have no choice but to partner with one or more NewLaw providers.  Done right, that co-sourcing, or strategic partnership, can, take a deep breath, and repeat after me, provide the right people, with the right skills, in the right place, at the right price. BigLaw wins, NewLaw wins, Client wins.  Namaste.  Heck, now that I’ve essentially solved the legal industry’s biggest problem, maybe it’s time to move on to global warming or bringing about world peace.

While I’m off doing research on climate change and communes, some of you may want to take a deeper look at some of the following real-world examples of legal co-sourcing, including:

Please feel free to add more examples of co-sourcing in the comments below.

 

My earlier post in the “21st Century Law Series” is:

Welcome to the Future – the BetterLaw Mantra.”

 

 

 

 

 

 

7 Comments leave one →
  1. May 22, 2014 3:22 pm

    Excellent article, Mike. Totally agree when you say that most large firms “won’t” do these things. It amazes me how many lawyers are willing to go out of business before recognizing that their approach is outdated and doesn’t work anymore.

    [Originally posted on Lawyers on G+ on Google+]

  2. May 23, 2014 12:11 pm

    Love the yoga references, Mike. I have recently taken up yoga. It helps me manage the stress of working with tradition-bound BigLaw lawyers, training them in Lean and legal process optimization, and helping them adapt to the new legal landscape.

    The first three elements of your mantra are at the core of one of Lean’s 8 categories of waste: non-utilized talent (check out http://gimbalcanada.com/free-guide-to-going-lean/). Focusing on getting the work done by the right people with the right skills helps overcome the inefficiency and associated cost of allocating work to people either over- or under-qualified for the particular task.

    As a variation on your mantra, consider that Lean’s processes improvement methodologies are all about providing:

    What’s needed,
    When needed,
    In the amount needed, and
    Using only the minimum resources required to add value.

    Thanks for another great article.

    Happy Memorial Day to all our friends in the US.

    • May 27, 2014 9:44 am

      Great points, David. Always insightful when you look at a problem from different perspectives and come to similar findings/solutions. Keep up the good fight!

  3. May 26, 2014 4:37 pm

    Very interesting article Mike.

    Like Cognition, we have also been working with McCarthy Tetrault to put together a proposal for a large client in Alberta.

    Both firms realized they could not, separately, offer the best option for the client, but working together, could turn this challenge into a true win-win for ‘BigLaw’ – McCarthy and ‘NewLaw’ – Simplex Legal Services, with the client at the centre stage. We can’t wait to hear the client’s feedback!

    I think we will see a lot more of these ‘co-sourcing’ partnership in the near future. Exciting times for all firms – ‘BigLaw’ and ‘NewLaw’ (and for the clients obviously!) of those law firms and legal service providers who dare to think and act different.

    The wind of change is blowing..

    • May 27, 2014 9:42 am

      Thanks for the comment, Martine. The old cliché seems apropos – the whole is greater than the sum of the parts. Gotta love synergy: Win-Win-Win for BigLaw, NewLaw AND Clients.

  4. Allison Williams Esq. permalink
    June 2, 2014 12:27 am

    A very interesting article. It truly is amazing how many lawyers would rather go out of business rather than admit that their approach are outdated.

    • June 2, 2014 10:36 am

      To your point, Allison, many firms (and lawyers) are afraid to engage in process improvement activities for fear that doing so, if discovered by their competitors, or worse yet their clients, will be taken as an admission that what they do now is somehow less than perfect!

      Far from being shocked by any such realization, clients tend to be relieved / pleasantly surprised when their external counsel finally acknowledge what clients have long believed to be a fact.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: