LPOs Stealing Deal Work from Law Firms
Feb. 8 (Bloomberg Law) — Legal process outsourcers (LPOs) and other alternative legal service providers are beginning to take the bread-and-butter of large law firms — handling whole mergers and acquisitions, not just the due diligence aspects of deals, according to law firm consultant Kent Zimmermann of the Zeughauser Group.
For smaller deals, clients are finding “they don’t need perfect, they need good enough,” and are increasingly willing to hire LPOs rather than higher-cost traditional firms, he says.
On some deals, clients are “adding insult to injury,” asking their traditional outside counsel to supervise the work of LPOs, he says.
Major U.S. firms are scrambling to deal with the new competitors. One AmLaw 100 firm plans to layoff 25 percent of its associates firmwide over the next three years, as clients shift low-value work to LPOs, he says.
Other firms are partnering with LPOs to win business. A Washington, D.C. firm is now bringing LPO representatives with it to pitch meetings with potential client, to demonstrate it can do the work at lower costs than other traditional firms, he says. Zimmermann talks with Bloomberg Law’s Lee Pacchia.