Law Firms Face Massive Overseas Move

Survey predicts £2 billion per year savings as 20% of legal workforce moves offshore

20% of law firms’ staff will be based in low-cost overseas markets by 2015, according to a report released today by outsourcing consultancy princeOMC (www.princeomc.com) and Legal Business magazine (www.legalbusiness.co.uk). 

This massive movement of legal and technical expertise to overseas markets will lead to a predicted saving of £2 billion per annum by 2015 amongst the UK and US’ top 100 law firms alone.

The princeOMC Legal Industry Outsourcing Trends survey in association with Legal Business asked more than 100 senior law firm representatives in the UK and US about their predictions for the future of outsourcing and offshoring in the legal industry. 

As well as predicting the massive scale of offshoring in the industry, the research also showed a significant acceleration in its pace and scope within law firms.  25% of firms are currently offshoring some aspect of their business (primarily IT and support services) but a significant 53% of firms predicted that elements of specialist legal work will be commonly offshored in the next five years.

The drivers behind the new pressure for offshoring in the legal industry were primarily financial, with pressure from clients to reduce costs (27%) and increased competition (22%) pushing cost-reduction to the forefront of legal business planning.

Ian Prince, CEO of princeOMC, said: “Offshoring has been a reality in many industries for a number of years, but its increasing importance in highly skilled and specialised markets such as the law is surprising for some. The potential for cost savings has always been there but what has changed has been the quality and specialisation of providers in regions such as India, Eastern Europe and The Philippines.

”The similarities between the UK and Indian legal systems means that the region is the destination of choice for many law firms looking to outsource.  This shared legal experience has led the shift in offshoring from mainly an IT and support services function to something that spreads to the very heart of the law firm.”

James Lewis, Associate Editor of Legal Business, said: “Ever-increasing competition to maximise profits is forcing the City’s leading law firms to consider more radical ways to reduce costs. In this context, offshoring is set to be a significant development and looks likely to transform the way law firms operate.”