Tuesday, February 06, 2007 9:59 AM
Globalization continues to drive change across many industry verticals. Thus, it is a fair question to ask about globalization and the legal vertical. There seem to be three schools of thought forming in response this question: 1] Globalization will be a disprutive force; 2] Globalization will force some changes, but the regulatory aspects/protections of/on the practice of law will ensure only some changes; and 3] Globalization will have no effect.
It is hard to pin down legal into neat categories. For example, a solo lawyer typically targets a completely different client base than a global law firm. And, that client base's needs and expectations may dictate whether globalization is a factor or not. Also, the type of law being practiced may or may not lend itself to globalization in the form of offshoring research, document coding and similar services.
Regardless of these issues, I am convinced that the entrepreneurs of the world (including a lot of lawyer-entrepreneurs) will make an ongoing and concerted effort to ensure globalization is a disruptive force within legal. I don't mean that the practice of law will be disrupted. Instead, I mean the businesses and people working for and within the legal vertical will be disrupted (or they themselves will be the disruptors).
Take a look at this recent report on Wipro, a growing Indian outsourcing/offshoring company.
Wipro: Why It's Sexy To Be a Nerd in India. Ashish R. Thadhani (Gilford Securities) recently sent a note to clients reiterating his raised ratings, target and estimates on Indian outsourcing firm Wipro Limited (WIT).
Mr. Thadhani's note included this: On January 30, Wipro hosted its annual Analyst Day at the New York Stock Exchange. The event featured Chairman Azim Premji, veteran CFO Suresh Senapaty and presentations covering key topics: Business Update, Consulting, Human Resources, Acquisitions and BPO.
Here were some of the highlights I called out (but click through above to read everything, it is worth it).
Organic growth. WIT's organic growth is benchmarked to match or surpass industry leaders. Indian IT + BPO export revenue appears on track to advance from $17.2 billion in fiscal 2005 to $60-80 billion in fiscal 2010 (source: NASSCOM), implying 28-36% compound growth.
Global footprint. Low-cost centers span China, Vietnam, Romania, Portugal, Brazil and – possibly in the near future – university towns and downsized defense establishments across U.S. states such as VA, GA and others!
BPO. The Indian BPO industry is forecast to grow at a 39% compound clip in fiscal 2006-10, from $6.7 billion to $25.0 billion...Recent wins include the entire Finance & Accounting back-office function at a Fortune-100 manufacturing company.
All told, we cannot argue with management’s observation: “It’s pretty sexy to be a nerd in India these days!”
The above is just one assessment of one Indian IT/BPO company; it could mean nothing. But, here is the thing. These companies (and there are lots of them out there, of all sizes) have not really focused on niche verticals like legal yet. But, they will. Perhaps they will start by focusing on large law firm back office functions. Or, on document processing for large litigation matters. Or on any number of other things I haven't even thought of yet.
And, as the note above suggests, no one saying that Indian, Chinese, Brazilian, Romanian, etcetera companies will be the long-term winners in this industry. It could well be United States, European or Australian companies and locations.
Take a look at this recent press release: Global Law Firm, Foley & Lardner LLP, Selects LexisNexis Data Center for Systems Hosting Services.
LexisNexis announced today that Foley & Lardner LLP has selected the LexisNexis data center in Dayton, Ohio as its primary systems hosting center.
A leading law firm with more than 1,000 lawyers in 17 U.S. and two international offices, Foley & Lardner selected LexisNexis to host their primary data center, using their own data center as back-up.
"IT has become such a critical part of our client service offerings that an 'industrial strength' 24x7x365 data center was quickly becoming a necessity. Operating globally there is no longer room for downtime," said Doug Caddell, CIO at Foley & Lardner.
Outsource your data center to a 100% uptime, hardened facility. Your current data center becomes your backup site. Makes some sense to me. This might be a good topic for a future post. For now, my only point is that outsourcing/offshoring is an aspect of globalization that law firms striving to become global service providers are obviously exploring for their own business model and processes. And, outsourcing providers based here in the U.S. are more than willing to assist in this exploration; it is good business.
In the end, whether you are globalizing your own operations or facing new competitive forces that globalization is bringing forth, the increasing pace of the changes being faced only seem to be increasing. Why? Because the world's entrepreneurs are on the case.