By now, most of us have heard about the benefits of “unbundling legal services”—by matching the right resources to the right job, in-house counsel can save significant amounts of money and can leverage lower cost resources to achieve more with their limited, or perhaps declining, budgets. Instead of having to treat each transaction or piece of litigation as a single integrated whole that has to be handled by a single firm, clients can now take advantage of improved technology to move particular tasks or activities to and from different firms, be they local or far away. This allows in-house counsel to choose the firm they want for the right blend of expertise and cost, without necessarily having to apply that firm’s rate card all the way through to the most basic and routine activities that are nonetheless a part of dealing with that matter. Outsourcing and globalization have arrived in the Legal Department.
What few people are talking about, however, is what happens after you unbundle a matter and outsource some of its different parts to different providers. Eventually, what is unbundled has to be reintegrated, and that reintegration has not only to proceed smoothly and efficiently, but given the subject matter, it may also have to be defensible in court. Who should be responsible for such integration, and what does it take? For one view on that issue, I’m going to shamelessly direct you to a piece that Connie Brenton, Chief of Staff for Legal Operations at NetApp, and I recently wrote for the National Law Journal.
For a practical place to start thinking about what you can count on outside counsel to do about integration, and what capabilities you may have to develop yourself, let me suggest a few questions to ask outside counsel when they say that they are willing and able to partner with you in outsourcing some work to legal process outsourcing (LPO) providers. These are not meant to be a checklist or a list of requirements, but rather a way to initiate a constructive dialogue about what it may mean for your outside counsel to be “ready” to integrate the work of third parties.
- Which aspects of this matter do you think are suitable for off-shoring, and which really should be kept on-shore? Why?
- How do you define and communicate specific requirements of the work to the outsourced provider?
- What steps do you take to make sure the outsourced provider understood those requirements and is able to meet them and make the appropriate trade-offs among time, quality, and cost?
- How do you handle matter-specific training of the provider’s delivery team?
- Have the partners or associates who will be working with the provider on this matter ever visited the provider’s delivery center? Would they travel there for this engagement?
- Do you have a documented process for working with third parties that describes how and how often you communicate about the project, who makes what kinds of decisions, how you resolve disagreements, and how you learn from experience and improve the process over time?
- What are the trade-offs between working with your preferred provider and using one we have selected?
If there is one thing that providers and customers of outsourcing have learned over the last 25 years or so in outsourcing IT and business processes, it is that good governance is the difference between a deal that works and one that brings nothing but trouble for both parties. LPO deals, although generally smaller and shorter in duration than the typical outsourcing arrangement, are even more complicated because of the three-way relationship among customer (in-house counsel), provider (LPO firm) and outside counsel. Add to the mix technology providers and a counter-party to the transaction or dispute, and you’ve created a complex multi-party environment in which to manage any number of differences in perceptions and expectations, as inputs and outputs flow to and from multiple service providers that use different technologies, manage across many time zones and cultures, work under different billing models, and have different assumptions about what “done” looks like. If you want the benefits in cost, quality, and timing that unbundling legal services can deliver, you must be prepared to face the challenge of re-integrating those services.