Outsourcing

Wales will today make its pitch as a new onshore venue where City law firms can cut their costs by locating back-office operations. Cardiff recently became the UK’s first and only dedicated financial and professional services enterprise zone.

Innovative legal business Axiom has become the latest to open an operation in Belfast, with £1.6m of government support. Unlike at other law firm operations in the city, the 100 lawyers and paralegals will be the primary client-facing fee-earners for global companies.

An innovative legal outsourcing business that uses former City solicitors to provide law firms and in-house departments with temporary support is set for a massive expansion, aiming to grow from 60 to 500 by the end of the year.

Merger and acquisition activity is becoming a far greater strategic priority among the largest law firms, new research has shown – although most still remain wary of alternative business structures. It also highlighted how top firms are being forced to offer fixed fees.

Our regular news round-up reports on a jailed solicitor’s appeal against his seven-year sentence, an SRA update on PC renewal, Integreon’s new LPO facility, the new Law Society advocacy section, pressure on HSBC over conveyancing and Herbert Smith expanding in Belfast.

The fallout from the financial crisis as well as growing threats from the legal process outsourcing industry is making it even more difficult for legal practices to juggle client expectations and fee income, says Peter Collins. Many are looking to manage their own resources more effectively.

The narrowing gap between wages paid in the UK and in booming Asian economies mean offshore legal process outsourcing providers are facing a growing threat from law firms setting up their own onshore operations, an LPO consultancy has claimed.

The Solicitors Regulation Authority is to roll out supervision of large City and national law firms through relationship management after a successful pilot. The year-long pilot also highlighted outsourcing as an issue to which the SRA needs to pay particular attention.

Our regular round-up of news you need to know includes the appeal court quashing an ILEX disciplinary ruling, delays for solicitors renewing practising certificates, a survey of young drivers on referral fees, a survey finding support for outsourcing and much more besides.

The relationship between large law firms and general counsel is likely to evolve in three phases, with the “endgame” around five years away, Professor Richard Susskind has predicted. He also expects the large accountancy firms to return to the arena.