The State of Sourcing

Last week, Microsoft signed a contract with Integreon for legal support services. Integreon will provide contract review and offshore document review services to the software giant from its India and Fargo centers.

Under intense pressure from the current economic environment, corporations are evaluating various options to remain profitable. Corporations are adopting several strategies to cope with the changing marketplace. A quick look at how Microsoft is tackling these issues.

Continue reading ‘Microsoft-Integreon deal adds fillip to the LPO momentum’ »

Last year, Rio Tinto, a leading international mining group, created news by announcing its plans to offshore legal services to India. Following the footsteps of Rio Tinto, last week Microsoft announced its plan to send routine legal work to CPA Global.

While a team of 70 people from CPA Global has been offering services such as intellectual property and patent maintenance to Microsoft since 2005, this is a separate contract for the LPO related work. Microsoft engaged CPA Global for a pilot in October last year. CPA Global will be providing multi-jurisdictional legal support work and legal research to the tech giant out of its Gurgaon office.

Continue reading ‘Microsoft follows Rio Tinto’s footprints’ »

“Rio Tinto legal chief quits for a new role at CPA Global”, read today’s headline. This does come as a surprise but surely great news for CPA Global and the LPO industry.

Leah Cooper is the managing attorney at the mining giant Rio Tinto. She is responsible for the overall management of Rio Tinto’s multinational legal department (comprised of over 100 lawyers). Leah was the driving force behind the Rio Tinto-CPA Global deal. In May 2009, Rio Tinto awarded a contract to CPA Global. Rio Tinto offshored contract review and drafting, legal research and document review to CPA Global. When I spoke to Leah two weeks back, she sounded quite upbeat about the LPO industry. Talking about the outsourceability of the services, Leah said “Initially, the work undertaken by CPA Global included contract review and drafting, legal research, and document review. However, the scope of work is expected to expand to cover other routine legal services work.”

Cost control has become a pertinent issue across businesses. Corporate counsels have been worried about managing their external counsels and are building cost effective systems to handle their ad-hoc legal needs. Corporations are increasingly exploring alternatives such as contract attorneys and offshore service providers (LPOs), especially for certain services that require junior associates. Said Leah, “Cost was an issue but not the only issue to consider offshoring. We contracted CPA in May 2009. Since then, we have saved US$13.9 million. However, the main reason to offshore was the increasing work load. There was a point when the in-house lawyers were inundated with work and we thought that contracting an offshore service provider will help them reduce their workload.”

Continue reading ‘Winds of change?’ »

US President Barack Obama announced his decision to end tax breaks to American firms that ship out jobs abroad. In his first State of Union address, he said “To encourage… businesses to stay within our borders, it is time to finally slash the tax breaks for companies that ship our jobs overseas, and give those tax breaks to companies that create jobs right here in the United States of America.”

Since this announcement, there have been speculations about the impact of this move on the offshore service providers (especially the Indian IT and ITES industry) and the future of the outsourcing industry.

Continue reading ‘End of tax breaks! – Can outsourcing be wished away in this era?’ »

The newspaper and magazine segments are the largest contributors in revenues to the global publishing industry – contributing close to 52% of global publishing revenues. It would therefore be safe to assume that of all the challenges faced by the industry, none would be as altering (in terms of revenues) as the challenges faced by these two segments. The newspaper and magazine segments have already lost considerable revenues on account of dip in ad revenues. This is directly attributable to the global economic slowdown, which has led to decrease in consumer and corporate spending.

Continue reading ‘Magazines: Ad-ing up the losses’ »

The publishing industry has been undergoing a transition. Starting with increasing costs of production and print, the industry is struggling to address the increasing demand of digital content as opposed to print. In the midst of this transition, the global economic slowdown prompted lesser spending by consumers and corporate spenders.  Over the past few months, we have seen publishers try a variety of approaches – going digital, reducing print publishing, and cutting costs.

In spite of these measures, one thing comes across very strongly – the industry is yet to find that one formula/method that addresses all their problems. The lack of such a formula forced us to ask the question – will publishers outsource? Sure, some publishers already outsource certain aspects of their operations. But will they outsource more? Will they end up offshoring? And if they do want to outsource/offshore, what are the primary reasons for doing so? Are they hoping outsourcing will  be the ‘X’ factor while re-defining their business model?

Continue reading ‘Will publishers outsource?’ »

“Law firm axes attorneys, associates and staff positions” – News like this has been hitting the headlines frequently over the last one year.

Since mid-2008, law firms such as Clifford Chance, Eversheds started trimming their staff strength (lawyers, associates and support staff) while others like Thelen Reid Brown Raysman & Steiner LLP have discontinued operations. The market conditions had a severe impact on the financial performance of most law firms, who reported significant drop in revenues. Drop in legal spend, shrinking budgets and corporates moving their work in-house has impacted law firms adversely. Corporates looking to reduce expenditure are making attorney fees a soft target for cost reduction. The last eight months have been more severe for law firms and have further hit their revenues and profitability. As a result, several law firms (including Am Law 200, Magic circle firms and other law firms) resorted to cutting their staff strength. Law firms dealing largely with mergers and acquisitions are the hit hardest. With the housing market taking a dip, the US and UK conveyancers have seen a drop in their business.

A number of US and UK law firms, including Allen & Overy, White & Case and Shearman & Sterling, Clifford Chance, Freshfields Bruckhaus Deringer and Lovells have temporarily halted recruitment of associate positions and have announced corresponding cuts to starting salaries. (Some are also re-looking their compensation model!)

Continue reading ‘Challenging times for law firms’ »