Inside View: The rise of legal process outsourcing, with Nigel Kissack, Pinsent Masons
First Counsel looks into Pinsent Masons’ groundbreaking decision to outsource litigation work to South Africa.
For many of us, digesting Christmas dinner means catching up with the Queen. But post-Christmas dinner 2008, Nigel Kissack, head of the dispute resolution and litigation team at Pinsent Masons, resisted the allure of the sofa to go out walking. Perhaps it was the crisp Yorkshire air that helped lodge the stroll in his memory. Or perhaps it was because it was then that he came up with a quite transformative idea and certainly the first for a law firm: to outsource aspects of its litigation work to South Africa.
‘We’d had an unusually large number of big trials that year involving a lot of court action,’ Kissack explains. ‘Every one of those cases required significant work identifying the relevant evidence and dealing with e-disclosure.’ The challenge was made greater by the on-going move to electronic rather than paper storage of files. With firms no longer retaining relatively easy-to-retrieve paper files, teams have been increasingly required to trawl through a huge volume of e-mail traffic – a uniquely modern problem Kissack adds. ‘The task was disproportionately putting the cost up compared to the rest of the work we were doing. So I was walking along thinking “if we’re not careful we’re going to price ourselves out of the litigation market”,’ he says. Conveniently, the firm already had a relationship with outsourcing provider Exigent, to whom the firm had been outsourcing its transcription work for several years. The South African outsourcing operation now appeared as an ideal answer to Kissack. ‘I rang our friends Exigent in South Africa and asked if they could recruit us some lawyers, how expensive it would be and whether we could set them up to do this kind of work? Could they have web-based access to a UK-based document platform? And could they do it cheaper than we can here? And of course the answers were yes, yes and yes.’
For Kissack, it seems that the solution was relatively obvious. In fact, when asked whether it was daunting to be the first to set up such an LPO project, Kissack admits that he didn’t really stop to think about it. ‘I thought carefully about the risks and the issues, and as long as the IT and contracts people were happy, and I did all the usual due diligence… I mean I didn’t even think we were the first. I just thought it was a sensible idea and so why not get on with it? That’s the honest answer.’ While Pinsent Masons may have been the first with a project of this kind, the firm will unlikely be the last. LPO has been described as the ‘next big thing’ for several years, but the recession may well have accelerated the shift as firms increasingly look for more cost-effective ways to service their clients. Only in October, The Lawyer was reporting that even the most traditional of partnerships, Slaughter and May, has drawn up a panel of three LPO providers with a view to potentially working with them depending on client demand.
And it is the client demand that may well be critical to the development of LPO. ‘The recession has made clients look at their legal spend more closely and demand that their lawyers find some new and more cost-effective ways of working, which will also protect the quality of the work,’ says Kissack. He also agrees that the pressure on firms to specifically consider LPO is coming directly from the clients. ‘Or it might be from lawyers trying to get ahead of their clients, but there’s not many of them,’ he says.
But for many firms, outsourcing administrative work may be one thing. In the wake of the recession, we have already seen firms such as Eversheds announce outsourcing projects affecting business services divisions. But to outsource legal work still concerns many. Some critics have pointed to the threat to UK lawyers’ jobs; others argue that it is taking valuable work from trainees. Kissack, however, is keen to counter such fears. ‘What I have done so far - and we are extending it – isn’t in the least threatening for any lawyer,’ he says ‘People think that this kind of work has been a training ground for lawyers for many years – when I started this 18 months ago, I got some emails from young lawyers saying that it was taking the bread out of their mouths. But it’s nonsense. It’s not as if I or any of my colleagues spent hours opening and closing e-mails for months on end to see if they were relevant for any particular issue in litigation. This is a new phenomenon. In the short term, it was dealt with by firms hiring lots of paralegals and that was more cost-effective than having lawyers or trainees doing it. But those paralegals in turn were too expensive for the repetitious nature of this work.’
He also has few fears about outsourcing legal work to such a different geography, either in terms of quality or security. ‘We chose South Africa mainly for the language because when you’re reviewing documents you have to have English as a first language and the South African accent is easily understood by Brits. Also working in the same time zone is important,’ he says. As for quality, Kissack argues that the core South African team are lawyers supported by a team of paralegals who are all trained in the Pinsent Masons’ way.
‘We use a primary UK-based document platform, the provider of which went to South Africa for a week and gave dedicated training. We also have on-going training and a quality assurance manual, processes, online systems and online supervision at each stage. They can’t download or print in South Africa, so the documents never leave the UK. There are a whole variety of issues that we have implemented from the outset to ensure both quality and our client’s confidentiality,’ he says.
That the firm considers Kissack to have successfully managed the LPO project is evidenced by the recent addition of ‘head of enterprise’ to his title. The role builds on the work of the LPO project in looking at a host of different ways in which the firm can deliver better value and ‘smarter’ work to clients, at a price they want to pay and from which they will see value. ‘The board could see it was quite a big job to analyse, review and implement projects that would make a real difference to the way we work, and make our firm a better place for clients to come. So over the summer I’ve been doing the analysing and thinking and reporting bit, and have proposed a variety of ventures that the board is pondering,’ he says. It may be fair to say that the firm has adopted Kissack as something of the creative spark in the business operation. But it is the LPO project that has enabled him to shine.
Looking to the future for law firms in general, Kissack thinks that other areas of work will no doubt be unbundled and done elsewhere. But he also thinks there might be a rise in a contract attorney market – something that has been happening in the US but may increasingly move over here. ‘As the recession passes, the question is whether there will be more of it, especially as Generation Y demands increased work/life flexibility,’ he says. ‘Maybe we’ll build an army of contract attorneys in the UK who can be used by law firms as a flexible resource to meet client needs…’
It is clear that Kissack’s thinking hasn’t stopped since that walk on a cold Christmas day – and his LPO project will unlikely be his last innovation for Pinsent Masons. The question is whether lawyers like Kissack are unique to a typically risk-adverse profession or whether he represents a growing number of legal professionals who have their finger on the pulse of market forces, and are willing to drive through change.