Q&A: David Eveleigh, BT Global Services
- Outsource Q&As
- On April 5, 2012
This article originally appeared in Outsource Magazine Issue #27 Spring 2012
David Eveleigh is General Counsel, BT Global Services – BT Legal. In advance of his presentation at the Legal, Regulatory & Compliance Conference 2012, we spoke with David about his organisation’s use of LPO, some of the model’s pros and cons, and his thoughts on the expansion of the space going forward.
Outsource: David, you’re going to be talking at the Legal Regulatory and Compliance event; can you give us a bit of an insight into what you will be sharing there?
David Eveleigh: To begin with, I will be covering some of what we’ve done at BT, particularly on the area of utilising a better resourcing environment with a legal process. We have a pretty substantial legal team – over 400 people internally across the group – spread around the world, and we cover a range of activities from business services through to consumers. We did have a captive organisation called the GRT, a global resource team based in Delhi, but we had the same problem that a lot of other companies do with resourcing in India which is quite a high turnover of staff, so we decided to outsource that to an LPO provider.
We spent a long period of time assessing LPO providers and finally chose UnitedLex and we now utilise them across the group. They provide a range of services to us such as support on the legal side, support services on the regulatory side, and they do quite a lot of the activity particularly for the UK and the US teams (it’s still a bit of a challenge to utilise that in the main European countries and Latin America); it’s been very successful for us in keeping my internal headcount relatively flat and to reduce our costs, which has been very significant.
The mistake I think that a number of people make when thinking about an LPO provider is to assume they’re a body shop, and they’re not. They focus around process, technology, and then people (in that order because that’s where their focus is). As an internal legal function, while we do a good job and add real value to the company, we are never going to be viewed from an investment point of view as a priority. So an LPO provider is able to take a much more consistent approach to how they’re handling the volume of work we do, particularly around basic agreements and simple things like NDAs.
Increasingly we source a lot of the initial bid work that we do, and a lot of the initial responses that we make in bid work out from LPO providers; quite a lot of the work that we do with the filings, we do around the world and it has allowed us to systemise this very well which makes it more efficient and puts in place a considerably better cost-base than we would have traditionally had if we’d gone to a law firm for that kind of work. That’s been very successful for us, so we’ve renewed with them
and that relationship is going well.
O: You mentioned keeping headcount flat: does the figure of 400 people you gave include the outsourced team?
DE: It does not. We’ve expanded the business we cover, and what we’ve managed to do is effectively cover that growth with the existing headcount, without having to recruit significantly because we’ve taken a lot of the volume business away from people so they can focus on exactly what they should be doing – so new markets, new sectors or some of the more complicated work that we need to do, to go into more core legal services such as data protection and Corporate Social Responsibility. That’s also enabled us to focus more on the supply side, so that has really helped us.
Also they do a lot of the management of information that we need which has been useful; we do time recording and that enables us to do an assessment of how people are using their time; whether they’ve got the right focus, whether they’ve got the right efficiencies – again, a lot of the admin stuff they’re able to help us with, so as a relationship, I’d say it’s been successful to date.
O: With reference to the European and Latin American countries which, at the moment, lie outside the scope of that particular agreement, presumably you’re still running anything related to those geographies in-house?
DE: The majority of our work is still on the more traditional basis; if you look at our resourcing model, it’s a combination of internal team, external lawyers – or external suppliers, because there won’t always be law firms; it might be accountancy firms, or it may be people that are providing data or translation services – and then we have some secondees with a few contractors. What we are looking at is whether we can find an LPO provider that would be able to serve us on a follow-the-sun basis, based somewhere in the Americas for the US and Latin American market.
O: What do you think have been the biggest challenges integrating an LPO provision into your structure?
DE: Buy-in, I think is the most difficult thing; people see it initially as a threat, as though you’re doing this so you can rationalise the workforce – which is not the case; the buy-in part is getting people to utilise it and spend the time to understand it; you still need to invest the time to understand what is expected from you. Often, initially you have to have that conversation maybe two or three times with the LPO provider and the actual people within it, and then it becomes a lot more of a standardised system and approach. Once they’ve done that (the individuals that are using it – say from the UK), they are far more comfortable on repeat work.
I think we had underestimated the amount of effort it would take getting people’s buy-in to utilise it, because they can’t see them, they’re not next-door to them; they’re a long way away in India, and those are things that you have to invest time in breaking down. We have an account manager that now surveys our team so that we’re picking up on issues and trends, and he ends up being our interface into the LPO provider, making sure we’re always trying to improve our service both ways, so he can come back into our teams and say “listen, this particular work, what do you think? What went well? What didn’t?”. That’s been a good investment, to have that single interface, and it also takes away some confusion for the LPO provider as they haven’t got multiple interfaces into a large company like BT.
O: That’s buy-in from inside the organisation; looking at the industry from a broader perspective do you think that in-house counsels generally are buying into the LPO idea more and more?
DE: I think they are. There are a lot more people showing a lot of interest in this; if you look at an organisation like CPA Global, you have people moving from an in-house environment into some of these LPO providers. I think that most general counsels are under significant cost and efficiency pressures; our customers expect more for less from us all the time and internally so do the people I have to keep happy, and so we need to be always thinking about how to do that. Then once you start, there’s a vast range of additional work which is on the periphery of what a lot of legal teams do – everything from management through to compliance work – and again, you can utilise the skills sets of an LPO in that area.
O: How mature do you think the model is that’s being integrated into business? Do you think LPO’s growing up now?
DE: Yes, I think it is. I just see it changing in terms of the management of the people going into some of the providers; you’re getting people from good senior roles in law firms joining these practices, and that to me indicates that there’s a level of maturity that maybe wasn’t there beforehand. There’s a real attempt to put a differentiator into the legal market and I think that is quite telling. What we haven’t necessarily seen is how the law firms can work together with the LPO providers for the benefit of the customers. They may be doing it for their own back office, but we’re not necessarily seeing them tie up the LPO provider and say “this is where we add value, here’s where they add value, this is a combined service”. I haven’t seen that yet.
O: Obviously one of the things that customers have been crying out for LPO to do is to reduce costs; how successfully do you think that’s going to be able to be carried out when there’s always a big upward price pressure from the lawyers themselves – especially in the UK and the US?
DE: That’s a very good point. We’re not seeing that, that’s for sure. We’re not seeing it being passed on – and partly because I think they still have a lock-in approach and they’re struggling to get business and they want to keep their margins high. The benefit of the LPO providers is very attractive to a company like BT, as you get a far better and fixed cost, and you have a far better assessment of cost. We are a very cost-driven company, so it’s more sustainable for us to say as a community that this part of our legal cost is more certain – whereas even with discounted rates, the majority of firms are still on an hourly basis, so your ability to look forward is that much more difficult from a planning perspective.
Whereas if I know the fixed amount that I’m going to be paying an LPO provider, it’s also driving the LPO provider to be more and more efficient – which goes back to the comments I made earlier around process, technology and then people. That tension doesn’t necessarily exist in the law firm.
O: Finally, how important do you think the structure of your own organisation has been in terms of your ability to make the most of the model that you’ve chosen?
DE: I think because outsourcing is one of the things that we sell to our customers, and we have quite a lot of experience of that, that has definitely helped us. I think the thing that will be a game-changer for me in this space will be someone who is able to do this on an onshore basis at scale in the UK. Although we have a US operation, it’s not massive: our biggest operation is in the UK. Plus, a lot of the stuff we do is into UK government, and that inherently restricts you to onshore-type activity. Seeing someone that can break into that market, I think that will be a game-changer.