CMS Cameron McKenna (CMS) and Osborne Clarke (OC) have scaled back their legal process outsourcing (LPO) agreements with Integreon within days of each other. CMS is seeking an alternative provider while OC is looking to bring resources back in house.
The ten-year deal between CMS and Integreon, struck in May 2010, was the largest of its kind, worth £600m. CMS had hoped it would establish a revolutionary alternative model for legal support services by outsourcing its entire support staff function in areas including finance, human resources, and IT. The deal resulted in an estimated 9% of its support staff being made redundant, while a further 21% were relocated to either Bristol or India.
Duncan Weston, managing partner of CMS, confirmed at the end of March that the firm was considering turning to an alternative provider for facility services already provided by Integreon. Weston would not provide any details as to whether any staff would be affected or the name of the new third-party provider.
A few days earlier, OC had announced that it would withdraw the majority of its outsourced staff from Integreon and move them back in house, just four years into a seven-year deal. An estimated 65 of the 75 support staff first assigned to Integreon in 2009 will return to OC. Support areas affected include IT, office services, learning and development, events, document services and client relationship management.
Since then, OC has confirmed its Bristol and Reading receptionists will move to rival outsourcer MITIE, the current provider of its London hospitality services. Staff consultations began at the end of March and changes are likely to come into effect on 1 May.
A spokesperson for OC said there will be a ‘maximum of one or two redundancies as a result,’ adding that the ‘efficiency of the original contract means there’s little overlap between existing roles at Integreon and Osborne Clarke’.
They added that, as the firm has grown internationally since 2009, its ‘needs have evolved’ and so it ‘decided to move some services back in house’.
OC chief executive and managing partner Simon Beswick said: ‘We remain firm believers in the shared services model and look forward to continuing to work in partnership with Integreon. After four years of working closely together, it was the right time to review our needs, which have changed so much since 2009.’
‘Integreon continues to develop the shared services model and interest has increased along with support for the dedicated service model,’ said Bob Gogel, CEO of Integreon. ‘Our onshore, near-shore and offshore strategy continues to fit with the model for legal services support outsourcing.’
As far as Integreon – whose clients include global investment banks and corporate giants such as Microsoft, as well as Allen & Overy and Simmons & Simmons – is concerned, the timing of two firms simultaneously cutting ties is not significant. ‘Both contracts are continually reviewed to ensure all aspects of service provision to ensure efficiencies are maintained,’ said Claire O’Brien, global head of business services and consulting at the company.
‘Integreon is continuing to be a trusted and strategic procurement partner to both Osborne Clarke and CMS Cameron McKenna and it is in that capacity that we are leading the sourcing projects for new facilities providers for both. We see this as very much business as usual.’
According to one UK managing partner, the outsourcing model has not delivered the obvious cost efficiencies that were touted when LPOs became popular post-Lehman. However, O’Brien disagrees and said it had not been Integreon’s experience to date, adding that the work is not being scaled back ‘as reported in some of the news media,’ and that it is actually increasing its provision for legal process support.
However, senior figures inside Camerons have previously shown some ambivalence regarding the Integreon deal. One Camerons partner said that the agreement was regarded as having delivered considerable cost savings but had yet to live up to expectations regarding improved service levels.