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Survey highlights gap between law departments and their firms on offshoring

PrinceOMC, a UK-based management consultancy providing sourcing consulting to professional services companies, polled over 100 in-house counsel at FTSE100/DJIA30 businesses and leaders in UK and US law firms. According to the press release of PrinceOMC

”The impact of the downturn on law firm’s perceptions of outsourcing or offshoring parts of their business has been mixed. Whilst more than 50% of in-house lawyers think that law firms should use offshoring to cut costs, more than 70% of law firm partners say they have no plans to offshore or outsource any of their legal processes.” Law firms, if this is true, are at risk of being disintermediated: general counsel will seek their own offshore capabilities and bypass law firms that are out of step.

The press release continues: “However, on closer analysis it seems that outsourcing of support services is increasingly in favour, with over 36% of law firms polled having already outsourced, or are currently actively considering outsourcing IT, over 43% word processing and 30% knowledge management. Over 45% said they would be considering their finance function and a highly significant 61% said they would be assessing commoditised legal work.” Law departments will benefit most directly from commoditized legal services being handled overseas (See my post of June 25, 2008: offshore with 27 references.).