Transatlantic firm Hogan Lovells has put South Africa at the centre of its cost savings plans for clients, setting up a business support services function that will see new vacancies from Europe and Asia evaluated in terms of whether they could as easily be done from the lower cost site.
Announced today (3 February), the centre, which has been set up in the same building as recent South African merger partner Routledge Modise, follows a strategic view of how the firm provides business services support, and will initially provide a reasonably low-level range of services including conflict checking, client due diligence and research.
The firm is adopting a ‘seed and grow’ strategy with an expected 20 roles implemented in the beginning.
Chief operating officer Nick Cray said: ‘This means we will initially start with a small number of roles which we will then increase over a period of time as our experience develops. In almost all cases, roles will be transferred to Johannesburg only as and when people leave the firm. When a vacancy arises in London and in the future in other offices in Europe and Asia, we will evaluate whether that role could be done in South Africa instead.
‘We are working with our new colleagues in South Africa on setting up the service and beginning the recruitment process.’
The firm’s regional managing partner for UK and Africa, Susan Bright added that a ‘significant number’ of the business services the firm receives needs to remain close to its lawyers.
‘However,’ she added ‘it is also clear that we have a number of roles that can be easily performed from a remote location but that in order to provide high quality support we need to continue to provide it from locations in time zones on both sides of the Atlantic.
‘We chose Johannesburg as it has an excellent supply of talented people, is well placed in terms of time zones and offers good opportunities for cost savings when compared to London and a number of our other existing office locations.
‘We believe that this approach to how we deliver our business services is innovative, pragmatic and strategically sensible in light of market and client expectations.’
Hogan Lovells’ home grown low cost venture echoes closer-to-home nearshoring initiatives such as Ashurst’s business support centre opened in Glasgow last year and Herbert Smith Freehills 2011 launch of a centre in Belfast to handle its volume disputes work.
Led by the director of the Belfast office Libby Jackson, the Belfast office is already used to support work coming from jurisdictions such as Europe and Hong Kong. Its purpose was to test if time differences can be overcome and was initially promoted as a conservative project, with plans to train only around 20 fee earners, including a mix of solicitors and legal assistants. The successful centre now has 120 permanent employees, almost evenly split between qualified lawyers and legal assistants.