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‘You don’t need to do this in-house’: Pinsents takes 20% stake in New Law outsourcing start-up

As general counsel continue to face pressure over costs, Pinsent Masons has acquired a 20% stake in New Law outsourcing business Yuzu, which was founded in January by former Colt group general counsel Robin Saphra.

The firm is providing seed funding and strategic support to start-up Yuzu, which offers clients the opportunity to transfer parts of their legal function out of the business in order to reduce fixed costs and benefit from further training, development and the use of modern technology.

Yuzu takes over all or part of a client’s in-house legal work, together with all or part of the team who currently carry out that work. The rest of the in-house team are then freed up to take on more strategic mandates.

According to Saphra (pictured), the type of work that could be done accounts for between 50% and 80% of the in-house legal team’s activity.

‘This could be commercial contracts, employment related work or property transactions. It will definitely tend to be activity that is high-volume and it will tend to be activity where you can bring a degree of process and systems to it to make it work more efficiently – but it is not the kind of work that is done by legal processing outsourcers – it is not just legal process, stuff like document review or low level work. This is the type of work that is core to an in-house legal team.

‘What I’m doing is saying to the in-house counsel: “You don’t need to do this in-house, I can provide a better service at a lower cost and give more investment to this in order to achieve that. And you can focus your activity on the top 10% – 30% of work which is really strategic and really important.”‘

The team which is taken on by Yuzu can be either based onsite with the original in-house team, moved to a remote location near the original site or placed with other teams which have been procured by the start-up. The company is also keen to explore flexible and remote working options as well as leveraging the capability of the team to service multiple clients, much like a law firm.

Alistair Morrison, head of client strategy at Pinsents will have a strategic input and consulting role in the start-up, along with other Pinsents partners.

Speaking to Legal Business Morrison said: ‘This is all very much in the philosophy of incubating and looking to build and develop the Yuzu business. What we have done is made a commitment in terms of the time input, resource and capability from our business in terms of key people helping Robin and the team at Yuzu.’

Although there are currently no direct competitors to Yuzu, the model is similar to the move by General Electric (GE) in January to enter into an outsourcing agreement with Big Four accountancy firm PricewaterhouseCoopers. GE is planning to move most of its in-house tax staff to PwC by April.

Meanwhile Pinsents has been a prominent investor in New Law models, founding flexible resourcing business Vario – which last week announced plans to open in Australia – and holding a majority stake in online compliance solutions business Cerico.