Northern Ireland and Scotland have become a legal process outsourcing (LPO) hot spot for law firms and service providers in England and Wales.
What's the attraction?
One of the region's major attractions as an LPO destination is that it has an untapped, highly educated, pool of approximately 600 law graduates per year. It is difficult for these aspiring lawyers to gain training since there are only 148 available training places to become a solicitor. For example, in Belfast there are three times as many law students graduating each year than there are law firm jobs, so Belfast has a significant number of skilled young lawyers looking for work. In addition to skilled workers, Northern Ireland does not present linguistic or cultural obstacles, the legal system is extremely similar, travel is cheap and quick, and currency and infrastructure are the same. All of this leaves the door wide open for the LPO market expansion.
While Northern Ireland is not necessarily a low-cost LPO destination compared to regions such as India, it is still substantially more cost-effective than other regions around the UK. On average, salaries in Northern Ireland are 20-40 per cent less than in the rest of the UK.
Northern Ireland encourages Legal Process Outsourcing
Northern Ireland is proactively trying to attract law firms and corporations to its shores by offering UK clients the unique benefits of a blended off-shore model. Essentially, the work is kept onshore but has all the perks of traditional off-shoring. Sweetening the incentive, the local government is offering financial rewards to companies and law firms to invest.
The model is catching on with law firms. It was reported that Allen & Overy was granted £3 million in public funding from "Invest Northern Ireland" for the creation of 300 jobs, and Herbert Smith was given £734,000 to create £3.1 million annually in salaries by 2016. Earlier this year, Ashurst opened a legal service support center in Glasgow while significantly trimming numbers in London. It is due to receive up to £2.4m in government assistance if the firm creates 300 jobs in Glasgow in the next five years. Ashurst's move came after one of its major clients, the Royal Bank of Scotland (RBS), underscored outsourcing in its latest panel review, requiring law firms to demonstrate that they have sufficient outsourcing arrangements in place.
LPO providers, such as Axiom, Integreon, Capita, and many others are opening shops in Northern Ireland as well. At the tip of the spear, LPOs themselves recognize what the region has to offer, and they see numerous opportunities to attract new clients and strategic partners.
The future looks bright
There is plenty of potential in Northern Ireland, and enough justification to put the region on any UK firm's short-list of near-shore destinations. With new law firms and LPO providers coming into the market and both Northern Ireland and Scotland offering subsidies to firms to set up their own service centers, the local LPO market looks promising. As law firms and in-house legal departments look to adopt strategies to optimize legal service delivery, there is surely more to come from Northern Ireland in the coming year.
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