New Zealand Nicely Positioned as New Legal Outsourcing Model Emerges
Matthew Sullivan is a well known thinker and writer on legal outsourcing. He recently wrote a piece ‘New Locations Offer a New Twist on Offshoring Legal Services’ in his blog (http://globallegal.wordpress.com) that positions a “new breed” of providers amongst the range of legal outsourcers.
Matthew summarised by writing “Within the legal services market, a new model of outsourcing has emerged to supplement the more well-known models that include combinations of onsite, onshore, and offshore. Outsourcers in Israel and New Zealand have positioned themselves between the higher cost, onsite & onshore vendors and the lower cost, offshore vendors. The higher prices that onsite/onshore vendors have been able to command are not so much a function of their geographies, but of their relative skill with the substantive and procedural aspects of the U.S. and U.K. legal systems. This new model reorders these assumptions by providing knowledgeable and experienced western legal resources from individuals who have moved to, or returned to, medium cost locations like Israel and New Zealand.”
Matthew goes on to identify examples of these types of providers, including Innodata in Israel who offer legal services to US clients, and Latitude South in New Zealand who provide services to UK clients. Alternative locations were also the topic of discussion at The Lawyer’s inaugural Legal Process Outsourcing and Offshoring Conference in London recently: (see http://www.thelawyer.com/first-lpo-conference-creates-debate/1002696.article).
These types of providers distinguish themselves from pure Legal Process Outsourcers (LPOs) by providing substantive legal services, rather than providing process services to legal clients. The value proposition offered by these “alternative” providers is quite distinct. LPOs tend to offer deep discounts on low risk, voluminous and repetitive (often paralegal) work. Providers like Innodata and Latitude South however offer healthy discounts on certain substantive legal tasks that require legal resources experienced in western jurisdictions.
Substantive legal tasks clearly make up the vast majority of the work a UK corporate, for instance, would currently send to an external UK legal service provider like a law firm. As a result, a healthy discount on a wider range of legal work through outsourcing will yield significant savings in real money terms. Most UK organisations regularly send substantive work to a UK law firm, so outsourced providers of this type of work must replicate the skill set, experience and operating environment found in such law firms, but deliver the product as cost-effectively as possible.
NZ’s Latitude South, for example, hires those who have practiced in top UK law firms or as in-house counsel in notable multi-nationals, and are now based in NZ. Team-members are the type of staff that UK corporates and law firms have readily hired into their own onshore teams, so they can naturally be looked upon as an extension to a UK-based legal team, but in a lower cost location.
Set out below are some further reasons why New Zealand, as a legal outsourcing destination, is worth a closer look:
- Not only are the NZ and UK legal systems similar, the professional culture and language are highly compatible.
- NZ has a wealth of legal professionals with UK experience. It is relatively easy for NZ lawyers to live and work in the UK, and a large number typically do so for many years to progress their careers. New Zealand lawyers have a great reputation in the UK, and that reputation doesn’t dissipate when they return to NZ.
- NZ is a developed country with a stable political, economic and regulatory framework, mature infrastructure, and a solid, transparent education system. Inflation is low, and currency fluctuations normal, making NZ a relatively predictable environment in which to operate. These types of socio-political and macro-economic factors are considered by UK clients looking to partner an outsourced provider.
