Osborne Clarke IT director Nathan Hayes says that firms should focus on service, not cost cutting in The Lawyer’s 60-second interview on key topics from the upcoming Business Leadership Summit.
Are you surprised by this apparent sudden rush to places like Warsaw and Manila?
Not particularly. It is about time that law firms with large London-based business support or paralegal functions looked to relocate them to lower cost locations. Where best to locate them, whether simply outside of London, near or off shore will be dependent on the size and nature of the firm.
For large truly global firms, off shoring from London would appear to have a significant cost differential, but such an initiative has to be coupled with a greater focus on improving and developing innovative services to clients. No firm will succeed by cost cutting alone.
Is the vocabulary that firms are using i.e. ‘relocating roles’ misleading, in that the reality is these are simply job cuts?
I don’t think it’s misleading. The roles are most likely being relocated as described, but that doesn’t mean there won’t be a human impact on the people in the UK whose roles are being relocated.
What do you think is the salary differential between say Warsaw and Manchester?
Not as significant as the differential between say Warsaw and London – so Dentons and Norton Rose Fulbright seem to be in a good position to make a success of their initiatives. Any firm that is offshoring from somewhere like Manchester to Warsaw will, I am sure, be hoping that the differential stays significant enough over the next few years to offset the substantial one-off transition costs involved. I’m not overly convinced it will, but DLA will be of a different opinion.
Other than costs reduction, what are the biggest advantages of Warsaw over Manchester or Belfast?
If the skills are accessible, I can’t imagine that any other advantages would have as significant an impact as the reduction in costs.
What sorts of roles do you think will be affected?
Back office staff mainly, but I should imagine that those involved in such an initiative will be looking for as many roles as possible to be affected in order to provide as much support as possible to the business case.
Does the fact that the numbers are so large reveal that these firms were over-staffed?
Only firms with large teams are in a good position to glean the benefits of offshoring. So it’s no surprise to me that the number of roles involved in the recent offshoring announcements are so significant.
What job prospects do you think there are for the people who lose their roles in these cuts?
Within legal in London job prospects are patently not as strong as they were before the recent spate of offshoring announcements.
What sorts of challenges does a move like this create for the lawyers working in head office?
Unless the current service is substandard I would suggest in the short term during the transition process that service quality will drop although in the longer term, as long as the initiative is a success, they will no doubt recover and possibly exceed the current arrangements.
Do you think we’ll see more of these moves by other major firms?
Yes. Any firm with a large London based business support or paralegal function should be looking at relocating those services at least to a UK region outside London if not to a near shore or off shore location.