There has been something of a trend towards outsourcing in the
legal profession in recent years, mostly in relation to back office functions
but sometimes also in relation to client work.
It is interesting therefore to see that two firms which have gone down
that route, Osborne Clarke (“OC”) and CMS Cameron McKenna (“CMS”) have both
decided to scale back part of their outsourcing agreements with Integreon.
OC set up its arrangements with Integreon in 2009, transferring a
number of its back office staff to the outsourcer. 65 of those former OC employees will return
to OC from Integreon following the changes to the outsourcing arrangements 4 years
into the 7 year contract. OC will bring
back in-house client relationship management, IT, and events management. OC is not cutting all ties with Integreon,
which will continue a number of functions including information services and business
intelligence. It is not yet clear how
many jobs will be lost in the process, but it is expected to be only a small
number.
CMS, who have used Integreon since 2010 after agreeing one of the
largest outsourcing contracts the legal market has ever seen (rumoured to be
worth £600 million), have announced that they are looking for a different
third-party provider to take over one element of the services currently
provided by the outsourcer. They did not announce publicly which service this
was.
So what should be deduce from all of this? Is it a sign that law firms are having second
thoughts about the outsourcing model? Or
is it that there are problems at Integreon which are unlikely to affect other
providers?
OC are bringing a team of people back in house, but are also
moving an element of their outsourced services to an alternative provider,
Mitie, whereas CMS are simply looking for an alternative outsourcing
provider. This would seem to suggest
that both firms still believe that outsourcing can be an effective solution,
but that they are not happy with all of the elements currently serviced by
Integreon. It is clear that neither of
the firms have lost faith in Integreon entirely – both were keen to stress that
they would continue to work with the company, and indeed it appears that CMS
are expanding the amount of legal process outsourcing that Integreon carries
out on its behalf, so Integreon would seem to be getting something right.
What I suspect that is
going on here is that firms are learning that outsourcing a huge range of
functions, both back office and in some cases client facing work, to a single
provider is a big ask. There are very
different skills sets required to provide an outsourced human resources
function, or an IT help-desk, than to have teams of legal researchers. Just because a business can run a top class out-sourced
office management function, does that necessarily mean it is also well equipped
to undertake client facing “KYC” requirements or document support? Whilst it might be tempting to take the easy
route of putting all out-sourcing requirements with one single provider,
perhaps the experience of CMS and OC is showing us that firms need to be
cautious about doing this if the range of services being out-sourced is
particularly broad.
