Tag Archives: outsourcing

General Legal IT, Legal

North, SaaS, East and West – split-shoring

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So I’ve had a poll on this blog for a few months now asking “When do you think a top 10 law firm will take the plunge and move to the cloud for documents or email? (e.g. netdocuments, office365 etc)”. The results show a clear feeling that this will happen in the next 5 years (68%), 41% think it will happen sooner.

I’ve posted about Office365 previously and how some large companies are already on the platform, but the push for cost reduction and innovation in law firms at the same time surely means there has to be a move to focus staff on the new technology rather than the utility technology (and by the way I really dislike that term as it has connotations that this technology is old, unimportant or a simple commodity, it isn’t but it is the technology that people like Microsoft are now delivering as SaaS – Software as a Service).

This week also saw the news that Freshfields was looking for space in Manchester to set up a 80,000-100,000sq ft office to house back office and possibly a legal support centre. Legal Week (no link as it’s a paywall article) talked of a an initial squeeze on the market in terms of available talent, but that this will be offset by more lawyers coming into Manchester given the attraction of big names like Freshfields. But what about the squeeze on Legal IT? Manchester has a number of mid-sized law firms with IT depts in the city, I’m sure the draw of the Freshfields name will be a pull for some in Legal IT but it’s not as if Manchester is a backwater small city that is suffering from higher supply than demand in the IT sector.

I wrote a post back in 2011 on near shoring, it was around the time of Allen & Overy’s move to Belfast. I finished that post with a comment that still holds true. The lack of movement of the big London firms to shift resources out of the capital. This goes beyond law firms, but where as in recessions business is capable of rationalising their staff they still seem to miss the obvious efficiencies of moving out of the capital. Given a lot of big law now runs offices from the US to Australia and most places in between, there seems little technological reason for those functions not needing client contact to be located outside of the high cost capital city.

Now you may be reading a conclusion into this post already? But let me first throw in the other 22% of the votes on the poll, those that said big law would “Never” move to cloud based SaaS for the core document and email systems. I presume these were based on one of two things a) the feeling that law firms aren’t tech savvy enough to take the plunge (sorry but this is as tired and as untrue as the “Manchester United fans don’t come from Manchester” line!) or b) security! I can see the latter point being an issue, but I can’t help feel we’ll bust through this one at some point soon. It isn’t as though the clients won’t be considering this kind of move.

So what is my conclusion?

Well I haven’t one. As with anything in IT there is never a one size fits all solution, what works for one doesn’t necessarily work for another. But I do have a couple of thoughts:

  1. If you’re a small firm without a dedicated IT dept then surely SaaS is for you. I can’t think of many cons to this choice.
  2. If you’re a London based firm who has yet to think of moving their IT out of the capital you have to ask has the boat already sailed? Should thought be placed to a combined move North and SaaS move? (Split-Shoring?)
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General Legal IT

Outsourced!

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Another week another outsourcing of legal support staff story, or so it seems in 2011. At the time of writing the latest is Allen & Overy and their move to outsource to Belfast. This follows other firms, like CMS Cameron McKenna giving it’s support staff the choice of Bristol or India.

It’s like the mid 90’s all over again. Well for me it is. At that time I was starting off in IT in the utilities industry. In the UK the government had privatised the regional electricity companies and they were suddenly in a competitive market. Very similar to the position law firms find themselves in now, a time when a fairly comfortable profitable market was suddenly plunged into an arena that was getting very competitive very fast.

The mantra was to cut costs and quickly. As a reader of Janders Dean’s blog points out “They’re doing this to cut costs aren’t they and if that means cutting some of the flab out of the headcount so be it. This is a business after all”. And as in the utilities then, it’s the same in law firms now, target headcount and target support functions.

I totally agree with the point in the quote above, that business needs to cut flab to remain competitive. And although not nice for those involved, good companies do tend to handle this well and look after the employees affected.

But it always reminds me of the story of East Midlands Electricity and what can happen if the sole focus of an outsourcing deal is money saving. You can read more details of what happened here and here, but the summary is that EME didn’t see the business changes that the deregulation of the UK’s domestic electricity and gas supply market would bring. And when those changes came they realised that there was no substitute for experience of an internal IT department and that there was a need for them to take direct control of all business-related IT projects. This led to a cancelation of a 12 year deal some 5 years early and a recreation of an IT department.

I think maybe A&O’s response is a better play, I’ve often wondered why a number of the London based UK firms persist in maintaining support functions in the capital, where the cost of offices and staff is much more expensive. So rather than outsource why not shift the functions to cheaper parts of the UK, say for example Yorkshire!!

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General Legal IT

Where will the law firm IT department be a year from now? – part 1

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I noticed a thread on a Legal IT forum over on LinkedIn last week posing the question “Where will the law firm IT department be a year from now?“. I started to post a response and realised I had much more to write than I could fit in one forum post, in fact there was so much that I’ve split it into a couple of blog posts.

This one looks at outsourcing and the overall purpose of a legal IT dept, then tomorrow I’ll post up some thoughts on the core technologies and what next.

Will IT stay in house or become an outhouse?
What are the options for outsourcing in the legal market in 2009? Personally I suspect many law firms IT depts will consider this, from an IT service perspective there is no real difference from a law firm to any other firm.

I don’t think that many law firms will try to outsource the whole dept, some have tried with other support functions (e.g. A&O’s 2003 move of document production to India) and almost all avoided outsourcing the whole function.

Some firms may find an outsourced help desk works well, others an outsourced data centre or development team. This is probably the most sensible approach, I don’t think the legal IT market has reached maturity yet and thus is still changing too quickly to be run as a pure “utility unit”, which leads too….

Will IT be run just to keep the lights on or will they install lights that are better than their competitors?
I read an article a while back in the Harvard Business Review (Your Next IT Strategy, October 2001 – no online verion) explaining how IT would slowly turn into a purely utility function for business and be thought of like the electicity, just some cost you pay.

Is this the future for law firms IT depts? In times like the current economic crisis, if you just look at pure “numbers” then it is tempting to feel this is a sound proposition. After all IT is a large cost on the balance sheets. There is an argument to say this could start to happen in 2009, after all most of us now use a DMS (Document Management System), a financial system, a CRM system etc Most of which are the same, so why not just keep the same stuff going as a service you buy?

But if everyone has it and does nothing new with it, this loses some of the key things technology can bring. A competitive advantage for your lawyers. The legal IT world is nowhere near as advanced as say financial services, where IT is ingrained in the business model. But I think the law firms that start treating IT as a pure utility will soon find firms that innovate using IT start taking their clients as the economy begins to pick up.

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