Picking the Right LPO Partner- Legal Process Outsourcing By Legal Eagles Global Group of Multispecialty Law Firms, [ a CWIIL Group Company ]

Posted on July 22, 2013 by CWIIL Group Global RHQ DK

This article describes how to find the right LPO provider. There are countless LPO providers in the market with very different delivery models, value propositions, and track records. Much like law firms, there is no single LPO provider who is the best choice for all law departments or all types of outsourcing. Instead, there are providers who fit specific corporate cultures and specific outsourcing objectives better than others. The steps laid out in this article will provide high-level guidance on how to narrow those hundreds of LPO providers to the few who merit in-person time from you and your team.

What Is Different About Choosing An LPO Provider

Choosing an LPO provider is a bit different from choosing a law firm, and it requires a bit more from the law department. Law firms generally pitch themselves relatively broadly, as being able to handle most or all of your outside counsel needs. They want to establish a trusted adviser relationship — someone who is ethically bound to protect your interests and brings their training and expertise to bear to anticipate and address the major risks in whatever regulatory-, transaction-, or dispute-related matter you bring them. By and large, they take pride in their ability to analyze a situation and come up with answers (or at least strategies to pursue on the path to those answers). When asked, most in-house counsel will say that they “hire lawyers, not firms” and that the personal and professional connection with key individuals at that firm is what drives their choices.

LPO providers, on the other hand, tend to make it clear that they are “not practicing law” but rather taking specific tasks that do not necessarily have to be carried out by someone admitted to practice and performing them more efficiently and with better quality control through the use of well-trained people, efficient processes, and leading-edge technology. They do want you to “hire the firm” and judge them on how well they meet specific, measurable expectations about their responsiveness and deliverable quality.

In some ways, selecting an LPO provider may have more in common with some of the things that your Sourcing & Procurement organization does for other parts of the company but with a couple of key differences. Legal services in general are different in some important ways from other kinds of services that Procurement may have more experience with, and LPO services in particular tend to require that the LPO provider work closely with both the law department and outside counsel. Both of these mean that there are critical nonprice-related components to the selection process; indeed, price may be a relatively small differentiator among LPO providers, even though the savings, when compared to outside counsel costs for the same services, may be huge.

Practical Tips For LPO Provider Selection

A good process for picking the right LPO provider to help you meet your objectives might include the following steps :

1. Taking what you have learned about the activities you are considering outsourcing during the creation of the business case and creating a “light” process map for each activity. This process map should show the major steps of the activity and the people who are potentially impacted by a change in that activity; “impacted” people are those who contribute information to the activity, those who access information impacted by the activity, and those who ask questions of someone in the law department who may be impacted by the activity.

2. There are many potential providers for common LPO activities, and it is likely impractical for you to contact all of them. Even if you were to try to do so, many providers likely would not engage with you due to a misalignment in project size, geographic or language requirements, or capacity. Thus, we recommend engaging in an initial exploration of the market to identify an initial list of providers who likely can meet your LPO requirements. There are multiple approaches to creating this list :

Network with colleagues at other companies or through ACC to find out who your peers have had success with.
Begin with a resource such as The Black Book of Outsourcing or India Business Law Journal, who each publish periodic lists of major providers and how they have ranked in surveys, and supplement this information with some web-based research to identify smaller providers who might also fit your requirements.
Consult an outsourcing advisor who maintains a database of providers and their capabilities and can counsel you on the suitability of different providers for different potential LPO engagements.

3. Once you have a sense of the scope and nature of the potential outsourcing and have identified that there is a set of providers who might meet your needs, you should develop a clear set of criteria with which to measure the providers against your stated objectives and determine the relative importance of each criterion to your selection.

Criteria will likely vary for different objectives, often significantly. This is why it is important to clearly define the tasks you may outsource and think with your team about your objectives for outsourcing before you deeply engage with providers : Only by first gaining clarity on your objectives can you be sure what to evaluate providers on.

Many companies find that the criteria they use to evaluate providers fall into two categories :

“Must have” capabilities that a provider must demonstrate in order to even be considered and which tend not to distinguish among “qualified” providers (often including items like IT and physical security, good confidentiality practices, and effective business continuity planning).
Criteria that often do differentiate providers from each other (often around pricing model, experience with particular activities or substantive areas, and delivery quality).

You should also consider weighting criteria based on their importance to your achieving your outsourcing objectives. While there is no “rule” on how to weight the very different kinds of criteria we often include, keep in mind that sometimes non-price criteria can be as important (or even more so) than cost.

4. Once you have established your evaluation criteria, you are ready to engage the potential providers directly. There are a number of approaches to doing so, depending on the scope and complexity of the outsourcing, your own resources, and whether you can obtain productive support from Procurement for the exploration. Three possible approaches are described below :

For a very small scope or when you are uncertain even of what activities it makes sense to outsource, it may make sense to engage directly with a small number of providers to discuss the opportunity and obtain their feedback. Large providers are generally able to have a good discussion with you even early in the process, and though they will ultimately want to sell you services, they also have an interest in maturing the market for legal outsourcing; they often will share some basic information and practices with you.
For complex or very large outsourcing, it may make sense to begin with a Request for Information (“RFI”). This can be done relatively early in the process and will allow you to begin to engage providers about the potential tasks, encourage them to share information and ideas with you, under a non-disclosure agreement and allow you to evolve your vision for the outsourcing before you commit to a Request for Proposal (“RFP”). An RFI can be fairly short and informal. It should, however, share enough information about your organization and your objectives such that providers can be responsive in ways that you will actually learn something from the exercise.
For outsourcing that involves relatively standard types of tasks for an LPO provider (e.g., document review, data entry and management, contract management, due diligence support, some components of IP portfolio management, contract redlining, document coding, etc.) and is not exceptionally large, it may make sense to proceed directly to an RFP. Because an RFP typically asks for a firm commitment from the provider for a defined scope of work, it will tend to occur later in the maturation of your own thinking than an RFI might.

5. As you review information from providers and measure them against your criteria for each objective, you might end up with a table like the following that reflects the key evaluation criteria you have selected, the appropriate weights for each criterion, and your team’s evaluation of specific providers for each criterion. Note that the first column reflects a “must have” criterion (i.e., pass/fail) while the other criteria selected are all “differentiators.”

6. Once you have a sense of who are the strongest potential providers, perform some due diligence on those few providers. Good practice includes calling named reference accounts, conducting research on the ownership structure of your top candidates, and consulting ACC peers or an outsourcing advisor about the companies you are considering working with. Normally, LPO providers will visit you for an in-person meeting and give you an opportunity to meet or speak with some of the delivery staff and/or delivery supervisors. Visiting one or more finalists and conducting on-site due diligence prior to contracting is also important, especially if you are contracting with a smaller or less well-established provider.

In some cases, especially when you have a complex set of activities being outsourced or when you have multiple very strong providers, you may choose to have an additional exercise to help you decide among the final few providers. The form of this exercise will vary depending on your outsourcing objectives and the size of the outsourcing. We have worked with clients who have created daylong interactive sessions with providers to explore capabilities, learn what it would be like to work together, and assess cultural fit. Other clients have created a “virtual data room” and asked providers to review and / or provide a work plan and cost estimate for completing a task relating to the documents in the virtual data room. What kind of diligence is “due” depends in large part on what your objectives are and what activities are potentially in scope to be outsourced.

7. Based on your assessment of provider capabilities, their performance against your evaluation criteria, and their success during your due diligence activities, you should select a provider and begin negotiations. Sometimes it will make sense to begin parallel negotiations with two providers instead of just a single provider. We do not recommend negotiating with more than two providers; it is difficult to manage the negotiations effectively, and it is not entirely fair to the providers.

Once the negotiation of an agreement is completed, there can be a tendency to think the hard work is over and the provider will “do the rest.” In our experience, a great deal of value can be lost at this point if there is not a thoughtful transition process and a robust, fit-for-purpose approach taken to managing the provider relationship over time.

These materials are not intended and should not be used as legal advice or other recommendation. If you need a legal opinion on a specific issue or factual situation, please contact a lawyer. Anyone using these materials should not rely on them as a substitute for legal advice.

Consulting Team – Legal Eagles, either directly or through the professionals in any CWIIL Group of Companies, for any / all your legal matters, ensures advise based on highest level of knowledge which are given to you by a team of select research-oriented experts whom each will do their own assessing of your matter, and also assess it together, thus ensuring that in case a mistake has been made by one, it will be noticed and corrected even before it is being passed on to you. Receiving incorrect and unknowledgeable legal advice can be disastrous and thus should be avoided.

Remember, no problem has a quick fix solution. Thus, always ensure to consult highly knowledgeable group of professionals whom would provide you with a collective advice, never individual advice. This group advise and approach is unique with all Legal Eagles Solutions and is in tune with the overall Management Philosophy of all CWIIL Group Companies, including but not limited to only Legal Eagles Global Group of Multispecialty Law Firms [ a CWIIL Group Company ].

Legal Eagles Global Group of Multispecialty Law Firms is part of CWIIL Group Of Companies, a global group of multi-specialized units with diversified interests and activities, wherein each company is a separate legal entity registered under prevailing laws in different parts of the world. The Group is active in a multitude of business verticals, and its legal unit by the name of Legal Eagles Global Group of Multispecialty Law Firms, provides comprehensive full scale legal services completely under the single window system across many verticals / specialties including, but not limited to, dispute settlements, debt settlements / recovering, finances, civil, criminal, contractual, tortuous, to name a few.

For Further Queries or to Request a Personal Quote Feel Free to Contact :

Mr. Mohammad Mukhtar Mustafa,
Deputy Global Director, No. 4,
CWIIL Group European Operations, Denmark
Email : deputy.gd.4@cwiilgroup.eu
Voice : +45.8176.1923

CWIIL Group Global Regional Headquarters Denmark,
Address : No. 1, Klokkebjergevej, DK6900 Skjern, Denmark
Voice : +45.5148.3608
Fax : +45.7014.1498
Email : corpcomm@cwiilgroup.eu
Web : www.cwiilgroup.eu

Office Hours :
Monday to Friday : 10.00 – 17.00 CET.
Saturday : 10.00 – 14.00 CET.
Sunday : Closed.

The Corporate Communications Team would require minimum a fortnight for Reviewing & Responding to Queries, which please note.

LPO – Building The Internal Business Case – Legal Process Outsourcing By Legal Eagles Global Group of Multispecialty Law Firms, [ a CWIIL Group Company ]

Posted on July 22, 2013 by CWIIL Group Global RHQ DK

This article describes how you can begin to assess whether LPO makes good financial sense for your in-house law department : Do the benefits outweigh the costs? In many companies, a positive business case will be required for deeper exploration of LPO, and there is no reason to let the development of such a business case become a barrier.

Why Build A Business Case Early

Building a business case can indeed be complicated, and each organization will have its own rules on how to allocate costs and calculate benefits. However, the steps described below represent a good common-sense approach that will often satisfy both financial and business stakeholders and allow you, the law department, to determine whether to proceed with further exploration of LPO.

Once you and your team have identified a set of tasks that might make sense to outsource and are confident that the potential value from outsourcing should be sufficient to justify it, an important next step is to take a closer look at the business implications. The purpose of this business case is threefold :

To validate and document your financial case for outsourcing;
To provide a tool to engage key internal stakeholders around the costs and benefits of outsourcing;
To begin to build some of the information an outsourcing provider will need in order to propose some outsourcing options.

The business case should be a living document, not a one-time calculation, and as such, it makes sense to begin it early in the process and update it as you learn more.

It should be noted that in this section we focus primarily on the business case for outsourcing activities you are currently doing in-house, as opposed to shifting activities such as document review that you are currently having done by outside counsel. The savings to be achieved by the latter are straightforward.

When building out the business case for outsourcing some in-house activities, we recommend beginning to think about costs and benefits soon after you identify tasks that may potentially make sense to outsource. The reason for this is twofold :

This ensures that investing time in exploration of outsourcing is justified;
This helps you learn the strengths and weaknesses of your business case so that these can inform decisions you make along the way about scope, provider selection, and contract negotiation.

Initially, many of the key inputs into the business case will be rough estimates; this is normal and expected. As the exploration process continues, you will obtain a significant amount of new information, and your perspective on some of the tasks and benefits may change. This usually results in a number of the inputs changing.

A few examples of where new information may come from during the outsourcing exploration include :

Input from other (e.g., non-legal) internal stakeholders;
New opportunities identified by the law department;
New risks that must be managed which are identified during the exploration process;
Information from outsourcing providers that changes your estimation of both costs and benefits;
Changes in your company’s business that may make outsourcing more or less valuable.

Keeping your business case updated will ensure that you are evaluating how changing information impacts the overall decision to outsource and will inform where you may want to seek additional clarity from stakeholders or potential providers about new information that is received.

A good approach to building the internal business case for LPO focused on shifting tasks you currently complete in-house to a provider might include the following steps:

1. For each task that your team determines is a potential candidate for outsourcing, ask your team to develop an estimate of how much time they spend on each of those tasks today. This represents the total time your department might be able to free up by outsourcing that set of tasks.

Remember to think broadly about the implications of a task shifting to an external provider in terms of reduced time managing junior staff, reduced burden on administrative staff, and reduced use of IT and other internal resources.
Unless your organization has a rigorous task-code billing or other structured time management process, these estimates will likely be only rough ones. This is fine for initially scoping the potential benefits, but they may need to be refined during the internal alignment process.
If feasible, it may be useful to break down your time estimates into unit costs (how much time does a task take) and volumes (how many times is that task performed) as opposed to just knowing that X number of FTEs go into a task. With slightly more granular numbers, you can play around with options that may simply reduce volume instead of replacing who does it and also look at whether there are seasonal patterns to take into account (e.g., peaks at end of quarter).
Eventually, you will need to map the processes or services under consideration in some detail to fully understand the potential implications of outsourcing and ensure you realize the benefits. This is a task you can begin on your own and perhaps let the provider help you complete later as part of their detailed solution design.

2. Determine how you might value success from outsourcing. What benefits are you seeking? Remember, there are different kinds of value available from outsourcing, and you’ll need to apply a slightly different approach to valuing each.

If the benefit is reduced headcount, calculate the value of the reduction, including benefits, bonuses, and overhead costs.
If the benefit is access to best provider practices or new resources, estimate what you think these would be worth. Would they translate into law department efficiency improvements or direct benefit to the business?
If your primary objective is freeing up more staff time within the law department, review the list of tasks your team wished it had more time to pursue, and determine how you might value these activities. Some questions to consider include: How might I quantify the value to the business of earlier/deeper law department engagement? What costs might be avoided by earlier/deeper law department engagement? Can we help improve some business processes? Might there be greater efficiency or effectiveness within the law department, and if so, how might I translate that into dollars or FTEs?
If you are focusing on repurposing your own staff, you might consider the avoided cost of not having to hire more staff as a good proxy for those other higher-value tasks they might turn to after you outsource some of the less valuable activities.

3. Develop a rough estimate of the additional costs that may result from outsourcing. This assessment should include three different categories of costs :

Exploration costs that are part of making the strategic decision whether or not to outsource; these are usually considered separately from the outsourcing business case itself because they are costs you would incur even if you ultimately decided not to outsource.
Transition costs that are one-time costs incurred during the shifting of tasks to a provider.
Ongoing incremental costs, which are “new” or additive costs you incur as part of managing and supporting the outsourcing provider.

4. One important cost category concerns the annual fees to be charged by the outsourcing provider to complete the tasks, which are eventually decided to be “in scope.” There are a number of ways to obtain this information, even early in the process :

For some tasks, providers, advisors, or others may have current unit cost information available which you can use if you have good volume estimates.
Once you have sketched out the tasks and approximate number of FTEs/average time per year per task for each, you can get “ballpark” pricing from outsourcing providers themselves.

As mentioned above, the business case is not a static document. One point in time where it is especially important to revisit the business case is when you have engaged providers and learned their perspective on how to most efficiently deliver the activities you have described. Providers sometimes will suggest other ways they might be able to provide value to your company (e.g., access to proprietary databases, additional tasks that are very low cost to provide alongside some of the in-scope activities, etc.).

In sum, managing the creation and updating of a business case can be time-consuming and will likely require engagement with Finance, HR, and external providers. Some law departments find it helpful to consult external advisors during this process; whether or not that step is warranted for your law department, the creation of a business case is an important step in building organizational support for LPO and for making a wise decision on whether to proceed in your own exploration.

For Further Queries or to Request a Personal Quote Feel Free to Contact :

Mr. Mohammad Mukhtar Mustafa,
Deputy Global Director, No. 4,
CWIIL Group European Operations, Denmark
Email : deputy.gd.4@cwiilgroup.eu
Voice : +45.8176.1923

Office Hours :
Monday to Friday : 10.00 – 17.00 CET.
Saturday : 10.00 – 14.00 CET.
Sunday : Closed.

The Corporate Communications Team would require minimum a fortnight for Reviewing & Responding to Queries, which please note.