Legal process outsourcer (LPO) in the legal
Joseph J. Lambert is a Managing Director and the General Counsel of UnitedLex, one of the leading so called „Legal Process Outsourcers (LPOs)“. The company operates in the US, UK, India, and Israel. It offers a wide range of services to its clients, such as e-discovery, document review, contract drafting and reviewing, services in IP and immigration law, or legal research. The company has been growing fast in recent years and has also received numerous rewards for its achievements.
Joseph has over 25 years of experience in academia, law firm practice, and as an in-house legal consultant. Before joining UnitedLex he served as General Counsel for Deloitte Touche Tohmatsu, as a member of the Deloitte global Management Committee, and as a Principal for Deloitte US. Joseph holds an LLM and a PhD degree from the University of Cambridge, where in the early years of his career he also used to be a research scholar. He was interviewed by Leo Staub.
Leo Staub: Joseph, how did it happen that the market for LPO-services providers has grown so remarkably in certain markets, such as the US or the UK?
Joseph J. Lambert: First of all, corporate clients of first tier law firms just were not willing to go on paying high hourly rates for work that could have been done for a much lesser expense by lawyers, and non-lawyers, utilizing technology and process, and a different cost structure entirely. Additionally to that, these clients were also looking for means to have that kind of work done a lot faster and in better quality. Take e-discovery or document review in litigation. Quick and reliable results depend more than anything else on intelligent and powerful IT systems, as well as process-trained professionals, that even sophisticated law firms cannot match. Here we come in.
You claim to be an important ally to law firms by helping them to better serve their clients. However, listening to you brings up the question if you are not – at the same time – a competitor to these law firms.
That could be true if you look at the business of first tier law firms as it used to be carried out for decades. Traditionally, so called “Full Services Law Firms” provided all legal services their corporate clients needed and required. They could charge every hour used on these mandates to their clients, no matter if the services required qualified partner attention or were rendered by (even first year) associates. These times are gone and they will never come back! So, many business law firms these days aim to deliver high-end legal services to their clients, mostly generated by partners and senior associates. They – and clients push them – outsource less sophisticated work to allies who can provide it at substantially lower costs. This is a typical win-win situation: Law firms can bill high hourly rates for work that actually justifies the rates, we – thanks to our streamlined processes, specialized staff, and powerful IT systems – cover the rest. So, “legal art” and “legal commodity” marry in a most beneficial way for all parties involved, for the law firm, for the LPO-services-provider such as us, and – most important – for the corporate client.
Well, it is quite obvious that this business model works just fine for high-end legal services delivered by first tier law firms. What about the large segment of second and third tier law firms who are serving their corporate clientele as full-services-providers?
There is a problem, indeed. Since companies like UnitedLex are on a very strong growth path, the market for mid-tier law firms clearly gets tighter. At the same time it is becoming more difficult for these firms to climb up the food-chain, as first-tier law firms focusing on complex legal solutions gather superior competence fast. They could find themselves in the famous sandwich-position, but many of these firms have become innovative. They have learned faster than some of the largest firms to team up with others – eDiscovery specialists, for example, to go to the clients.
Where will this development take us in the near future?
I strongly believe that we should avoid talking about the “annoying” fact that LPOs are speedily gaining market share on law firm’s account. The developments we see are happening due to the dramatic change in demands from our corporate clients. I do not know where this will lead us, but the marketplace, and the law firms, understand that these changes are here to stay. What I know is that UnitedLex recognizes huge opportunities in all strategic fields. In the kind of services we can offer, in the client segments we can serve, in the markets that wait to be explored, and in the ways our services can be delivered. All these opportunities are generated from the great challenges our clients face, be it quality, speed, transparency, and – last but not least – cost. These challenges create specific client demands, and we see us in a great position to satisfy them by partnering up with the best law firms in all segments of the market – each to do what they do best!.