Outsourcing, globalisation on Australian GC’s radars
Outsourcing continues to emerge as a theme for Australia’s corporate counsel, including to offshore providers, as the impacts of globalisation also affect big business.
Globalisation, outsourcing and panel management were some of the key themes emerging from a recent Australian survey managed by Deloitte, especially in terms of how work is being managed and how far general counsel are embracing such trends, including social media.
The NSW Law Society’s Corporate Lawyers Committee assisted Deloitte with the survey, which confirmed emerging attitudes to law firm relationships that CDR has covered previously.
In the firm’s 2012 Corporate Counsel Survey – ‘Embracing a changing world?’ – key findings showed 96% of respondents had outsourced at least some legal tasks to external providers, with an emerging trend of work being outsourced to companies such as legal process outsourcing providers (LPOs).
That facet was a feature of AMP’s recent panel review, for example.
Deloitte partner David Lombe said the survey results confirmed legal service outsourcing, whether to law firms or the newer breed of providers, remained critical for corporate counsel.
“Just as the economic environment remains uncertain, and external and internal pressures remain for Australia’s private and public sector organisations, the legal services landscape is experiencing significant change,” Lombe said.
Meanwhile, more than 90% said that as a result of economic conditions over the past year demand for legal services within their organisation had increased (48%) or remained the same (44%), leading Lombe to comment on the growth of opportunities by international law firms in the region.
Areas of legal work expected to be busiest in 2012 included commercial, regulatory compliance, and dispute resolution and litigation.
To react to such growth, energy, natural resources and dispute resolution capabilities.
Other UK firms seeking mergers include Ashurst’s proposed tie-up with Blake Dawson, while Mallesons announced a tie-up with Chinese law firm King & Wood.
The survey showed 41% of respondents said both routine and complex tasks were outsourced, with litigation and contract management both routinely outsourced.
Lombe said: “In this environment, and at the top end of the legal services supply chain, corporate counsel are having to deliver more for less as they maintain a strong focus on providing high quality but still cost effective legal services.”
He added: “Being open to different ways of doing things, including outsourcing tasks here and overseas, is one way in which they are able to further improve their cost management.”
Commenting on panel review issues, Joshua Box of Ocean House Consultants said that general counsel were “generally more educated buyers of services” and “under more financial pressure to manage outside counsel spend more effectively.”
He added the introduction of LPO meant there were more options for clients, leading to a more rigorous process for law firms generally.
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