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Outsource magazine: thought-leadership and outsourcing strategy | April 28, 2017

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Some thoughts on the legal market in Belfast

Some thoughts on the legal market in Belfast
Outsource Magazine

The first time I visited Belfast, over 20 years ago, the Troubles were still at full tilt and my over-riding feelings were of a friendly, but particularly edgy, city. On my recent return, I found that the city has been transformed into a commercial centre in which – whilst a tiny proportion of the edginess still exists – the friendliness is now overwhelming. This is despite the city being caught up in the worst recession in a generation, but which is now partly responsible for driving a new market for nearshore legal services.

It is to gauge the credibility and capability of this new legal services market that I was impelled to visit the city last week. (My trip was hosted by Invest Northern Ireland, and, although they set up and organised the meetings, I was free to drive my own agenda with the interviews). There have been a couple of headline moves in the last few years, notably Allen & Overy and Herbert Smith, two London-based law firms who have set up legal, and technology, service centres in the city. Talking to a wide range of people, these can only be seen as successes for the region, but I was keen to understand what was beyond those deals: what did the next few years hold for Belfast’s legal services market?

First, let me tell you what Belfast has going for it, when you consider it as a nearshore legal services location, and particularly when compared to the Indian outsource providers:

  • A well-educated work force: around 500 law graduates a year come out of the two universities, Queens and Ulster;
  • Salary costs significantly lower (up to 40 per cent) than the rest of the UK, particularly in the legal sector;
  • A strong familiarity with English law (many lawyers are dual-certified);
  • Same currency, same time zone and same native language as mainland UK, and;
  • Availability of a number of grants and subsidies to invest in the region (that’ll be the folks at Invest NI).

And, when you combine the hunger for business borne out of recession with an inherent warmth and openness of its population, then the proposition starts looking pretty attractive. My first meeting was a discussion with Anna Moss, Managing Director and General Counsel at Citi Belfast, and the person who set up, and is now managing, their legal shared services team in Belfast, so I asked her whether, if it is that attractive, will the region simply run out of good people once the word is out? Her answer, which was reflected in similar responses throughout the day, was that this was not a problem now and wouldn’t be for the near future.

There are, essentially, four sources of staff available to Anna and her peers: new graduates from the two universities who tend to be Northern Irish and are keen to stay in the region; ‘under-employed’ lawyers who do not wish to leave the region; lawyers who form part of Northern Ireland’s returning diaspora, and; those with non-law qualifications that can be trained to carry out legal processes or even to be lawyers themselves (this latter option is the one that best suits Anna’s operation). This theme of a population that hardly leaves, and always returns, home is one that is repeated throughout my trip. It would seem that the region is a long way from running out of good people.

My next meetings were ones of contrast between the ‘old’ and the ‘new’. I sat with Norville Connolly, President of the Law Society of Northern Ireland – the surprise here being that someone who runs such a venerable institution should have such forward-thinking ideas, particularly when it comes to getting the most out of the region’s legal resources. Then it was lunch with Conor Houston, Chairman of the Northern Ireland Young Solicitors Association – a man who is able to personify the future of Northern Ireland’s lawyers with so much energy and passion. Between these two organisations there is a definite intent to do the right thing for the region’s lawyers, even if they do come at it from different angles.

That shared ambition may not be so obvious when you compare the city’s law firms and the new kid on the block, Axiom. I met partners from two of the largest firms in Northern Ireland as well as representatives from Axiom. Whilst there was a genuine openness from the law firms, there was also that insularity that I have seen afflict firms in London as well. A&O and Herbies are generally welcomed and seen as good for the region, but that’s because they are only processing transactions from non-NI clients. “Northern Irish people like to buy from Northern Irish firms” I was told on more than one occasion, but this is bound to change as the market opens up. Pinsent Masons’ residency in the city causes more worry as they bring the backing of a London firm to the practice of NI law in the region.

And then there is Axiom. I was actually quite surprised about how little was known about this legal services provider in the region. Axiom presents a potential problem (by wanting to recruit from the same pool of people) for Citi and the law firms – Axiom plan to grow to over a hundred people in their Belfast delivery centre by 2014. Whilst all competition is good, this will shake up the dynamics of the labour market quite dramatically. And then there is always the possibility of another provider moving in to compete with Axiom.

It’s clear that there is plenty of potential in the region, and enough advantages to put Belfast on any UK firm’s short-list of nearshore destinations. It’s also clear that this is just the beginning of the story. The law firms in Belfast will start to feel real pressure from the likes of Axiom and Pinsents, and cost pressures will (eventually) have them looking to their own shared or outsourced services. Axiom seem to have their act together with regard to recruitment, but it won’t take much (such as expansion by one of the existing residents or the appearance of a competitor) to make that a whole lot more interesting. But for Belfast, being part of a transforming market and creating healthy competition can only help the cause. Rather than a region obsessed with it’s past, it exciting to see it looking eagerly to the future.

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