Some of Orbys’s clients have ambitious growth plans over the next few years, in some cases increasing their turnover by over 30%. This will mean that the legal departments in these companies will come under increasing pressure from significantly higher workloads, usually without the required increase in headcount For those organisations that are, for example, heavily dependent on intellectual property or are developing businesses in emerging markets, these stresses will be much greater, and could, if it continues to operate in the way it is today, eventually take the legal department to breaking point. So, it is clear that something major has to change in the way that they do legal if their businesses are to exploit their growth opportunities.
Outsourcing has, and still is, been seen primarily as a cost-cutting strategy. And whilst it can certainly deliver on this, the additional benefits of flexibility and scalability are often neglected to the point that the outsourced services become a barrier rather than an agent of growth. The trick, of course, is building those objectives into your sourcing strategy so that the necessary mechanisms and levers are put in place at an early stage. But that will only get you so far.
So, how can the tools, approaches and methodologies of outsourcing be applied to the legal department in a way that will maximize flexibility and scalability? One answer is not to bring in a bunch of LPO providers to carry out a range of legal processes for you – this approach may provide some benefits in some areas, but a much more holistic approach is actually required.
The secret lies with TOM, or the Target Operating Model. This approach defines the structure and relationships between the different in-house and outsourced functions. It needs to cover all the interested parties, including the ‘business’, the in-house counsels, the in-house administrators, the external law firms and the LPO providers. It is the intelligent building-block approach to outsourced services that delivers the scalability, and it is the dynamic management of the flow of work through the TOM that provides the flexibility. Get all of this right and you have a lean, flexible and scalable legal department that is ready for anything.