A Dynamic UK Legal Segement

It has been another exciting week in the world of outsourcing for the UK legal market.

First, Allen & Overy announced their new outsourcing initiative. The engagement is for litigation support services and structured as a “suite of options [for clients] including offshore outsourcing,” according to litigation support specialist at Allen & Overy, Vince Neicho.

The Allen & Overy engagement is a great example of the growing number of firms who are starting to formally offer outsourcing as a part of their “suite of options” available to clients upon their request.

The second big piece of news out of the UK is word that Lyceum Capital is investing £25 million to fund a new on/offshore legal services vendor Laureate Legal Services (LLS).

This is one of the first big PE deals to come together in the UK as a result of the changing legal landscape and upcoming implementation of the Legal Services Act.

Lyceum managing partner Jeremy Hand provided insight to Lyceum’s investment strategy in the changing legal landscape for our recent book Implementing a Successful Legal Outsourcing Engagement. He is quoted in the book as saying, “In line with our core investment strategy, the legal services sector is large and fragmented, but maintains very high margins. Furthermore, this is an industry where the majority of clients are not happy and partners at law firms typically would not consider their organizations as ‘well-run.’ ” Hand emphasized the importance of firms proactively preparing for the implementation of the Legal Services Act stating, “In this market, the first-mover advantage will be key.”+

As capital markets recover, investment opportunities will increase for alternative legal service vendors who provide new and innovative solutions for the delivery of legal services. As these firms seek to leverage first-mover advantage, we may see several similar deals coming together shortly.

+Bell, Michael D. Implementing a Successful Legal Outsourcing Engagement. The Ark Group and Managing Partner, 2009.

Written by Fronterion