From Cape Town with Love(lls)

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18 June 2010

Posted by Neil Rose, Editor, Legal Futures

Cape Town: football is the big thing today, but longer term it could be outsourcing

Little more than few hundred yards away from Green Point Stadium in Cape Town, where England play Algeria tonight, are the offices of Exigent, the company at the forefront of proving that business and legal process outsourcing (BPO/LPO) is not a purely Indian phenomenon.

Hogan Lovells, Pinsent Masons, Eversheds and a host of other English firms, large and not so large, outsource a range of operations to South Africa, presumably attracted by the time zone (just an hour ahead of the UK), the language and the skills available at lower cost than at home. In South Africa for a mix of work and football, I used my trip to witness an outsourcing operation first hand (I should thank Hogan Lovells for introducing me to Exigent).

I’m not sure what I expected from an LPO provider, but I was surprised by just how mundane it is (in a good, non-threatening way). It is simply an office the like of which you will find up and down the UK. Some firms demand dedicated, secure areas for their teams, but other teams are located with others in an open-plan office, and I can see no real problem of confidentiality in such an arrangement. Staff sign both an Exigent and a firm-specific confidentiality agreement, and there are protocols in place in the event of a conflict, although I was told that it has not yet happened that different teams find themselves working on opposite sides of the same matter.

Exigent currently focuses on three main areas: document production (ie, typing), document examination (proofreading) and document review (for the purposes of disclosure). But it is steadily expanding into areas such as due diligence, general research and, interestingly, fixed-fee road traffic accident work, which it is currently piloting. This echoes the efforts of well-known solicitor Kerry Underwood to encourage smaller firms to outsource routine, low-margin work like small personal injury cases and conveyancing to his Law Abroad operation, also in South Africa. Law Abroad is a Legal Futures Associate.

Almost all of the staff in the LPO side of Exigent’s business are qualified lawyers. To many solicitors, the kind of work on offer here might seem menial, but I was told that South African law firms generally have highly traditional structures where advancement is very slow; the lawyers at Exigent have chosen instead to work in a corporate environment where what they are doing appears to be more of a job with prospects for a management role than a legal career, if you get the distinction. There is flexible working and paid overtime, quality controllers and service-level agreements – basically, this is not, and does not pretend to be, a law firm (except that Exigent bills on a time basis).

The service-level agreements are challenging – Hogan Lovells’ typing has to be turned around in four hours, while they have three hours in total to do the road traffic work, any time beyond which is done at Exigent’s expense. But the very friendly women I met – virtually all of the nearly 200 staff appear to be women – seemed happy and motivated. They have ‘Thank you Thursdays’ where staff are recognised and rewarded, while there was lots of talk about a global Hogan Lovells’ charity bake competition and sale today which they are taking part in.

Quality control is an interesting issue – this appears to be rigorously done at Exigent, with typing checked by a quality controller before being sent out, for example, along with 2% of documents reviewed for disclosure. I suspect many law firms are not so hot on this, certainly not in such a systematic manner. Further, all fee-earners back in the UK are asked to complete a satisfaction survey after work is returned, which is fed into performance reviews.

There appear to me to be two strong reasons to consider outsourcing. One is simply the chance to reduce costs of certain tasks – maybe allied with lay-offs back at base. The other, more positive, reason is to allow both fee-earners and PAs to focus on more valuable work in the office. This chimes with what I see as perhaps the central theme of the legal services reforms: where is the added value? This means, at the top level, why should I instruct a solicitor rather than a new, alternative provider of legal services? But BPO and LPO show that it is an issue that the legal profession needs to consider at every level.

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