A recent article in the National Law Journal described the reasoning behind litigation partner Gregory Evans’ decision to leave his practice at the firm Milbank, Tweed, Hadley & McCloy. He has decided to leave to start his own firm, Integer Law Corporation, to offer a greater focus on client relationships, and most importantly better serve clients to combat their desire to save money from traditional billing methods.  Upon reading the article, it occurred to me that all of the academic inspired articles and blogs we’ve been reading have been foretelling an increased number of real examples focused on lower cost alternatives to traditional law firm billing.  And all within the LPO community expected that legal process outsourcing should play a role in cost cutting initiatives, but it is not the entire answer, but rather one tool in the toolbox for firms and legal departments.

LPO’s role in a firms spend control program should complement the other areas it will identify as low hanging fruit across its cost centers.  It could stem from IT spend, salaries, support services, office space, insurance, and even something as trivial as postage.  Ok well, postage is not likely going to add up to residing in the top three cost centers for a firm, but you get the idea.  The idea is to understand where in the overall picture could legal outsourcing of certain activities fit in.  That picture painted by the firm would allow for the necessary clarity for both the legal process outsourcing provider as well as the client to map out the right road for a mutually beneficial relationship. 

LPO may not be central in the early stages of a cost cutting initiative, but it can become the main focus over time once the easier to handle cost centers are taken off the plate.  The need to address the higher value areas of wages, salaries, and even office space expansion may all lead to legal outsourcing, but it would require careful consideration.   Not to forget to mention the investment of time and resources to ensure the relationship between the firm and the LPO provider will see its share of success. 
The cost advantages of legal outsourcing will take some work, especially at the outset, but it will pay off as time goes on.   The ultimate sign to look for that LPO has contributed positively beyond cost alone will surface when the firm’s clients are increasingly satisfied with the new found relationship they have with their counsel – at a lower cost to them. 

That’s when you know the alternative has paid off. And perhaps soon in two or three years we won’t be labeling the firm’s engagement with legal process outsourcing providers as ‘alternative’ anymore.

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