Global Legal Support Location Strategies

Legal firms are looking at ways to optimize their legal services as the conventional way of working 100% in the office has been radically challenged during the pandemic. Now, many legal firms expect growth across most global geographies and are re-evaluating their location strategies. Right-shoring turns out to be different for different players.

Legal and Business Support Centers Footprint

Opening Legal and Business Support Centers in onshore, nearshore and offshore locations has been regarded as a cost-effective strategy since the turn of the century. Since then, many leading global firms have built their own business and/or legal support centers in locations all over the globe finding their own niche in locations such as the Philippines, Northern Ireland, Scotland, Florida or South Africa to mention just a few.

Top trends

There are 5 top trends for the future of legal support services and their impact on location strategies of legal firms.

These legal support services trends have an impact on the location strategies of legal firms:

• The evolution of services, moving from largely centralized to largely distributed and decentral ways of working, integrated services and a focus on customer, experience and value. This will result in a global strategy with several distributed local and/or regional solutions.
   
• The move from single function legal support services to Global integrated Business Services with a worldwide approach to services, but allowing for regional or local flexibility. This will lead to multiple integrated regional delivery centers that require in most cases a nearshore solution to assure cultural affinity.
   
• The use of new legal technology (such as digitalization, the automation of basic administrative tasks and new e-discovery tools) leads to less transactional and more complex processes remaining in legal support centers and results in a reshoring or nearshoring location strategy.
   
• The increased focus on access to talent with a technology and service focus. Also as labor markets around the globe are becoming tighter, having access to the right talent is an important driver for many legal firms. Location strategies move from a cost to a technology & service focus. Focus on markets with more technical skills and lower saturation rates, which are most often found closer to home: bringing centers back re-shore and nearshore.
   
• The Working from Home trend as kickstarted by the global Covid 19 pandemic will have an impact post-pandemic too. The higher % WFH leads to smaller hubs with better access to larger labor pools onshore and nearshore with smaller hubs with virtual spokes.

Right-shoring Strategies

Where the legal support industry started with (mostly regional) consolidated centers onshore in large tier 1 cities, they soon followed a more cost driven strategy with offshore solutions in tier 1 and tier 2 cities. Now, we see more a focus on technology and services which results in reshoring and nearshoring solutions in tier 2 and tier 3 cities. Some experts claim that technology will replace labor in total for which smart or well-connected digital cities are required. Also, there is this current Covid related wave that will very probably lead to more working from home – also in the future. However, especially low(er) margin business continues to seek the lowest cost locations, i.e. attractive new locations with deep labor markets and attractive/low cost.

Conclusion

Many legal firms expect growth across most global geographies and are re-evaluating their location strategies. Right-shoring turns out to be different for different players. An increase in reshoring and nearshoring the coming years can be expected (at the expense of offshoring legal support services) as these markets provide better access to talent and technical skills.

In case you are interested in receiving your copy of the White Paper ‘Global Legal Support Footprint & Right-shoring Location Strategies’ please contact Josefien.Glaudemans @bciglobal.com.