Saving on Law Firm Costs Not the Canadian Way

Just when I had given up on major law firms doing something that makes them more efficient and innovative, international law firm Bingham McCutchen LLP relocates 250 of its staff from around the globe (if they choose to move) to Lexington, Kentucky into a former IBM building on the University of Kentucky’s Coldstream Research Campus business park.

The firm decided to move its finance, accounting, human resources, information technology, knowledge services, marketing, operations and risk management staff into one location to save costs, improve coordination and become much more efficient.

Certainly the $6.5 million in tax incentives from state and city governments didn’t hurt either.

In the past, a few other firms have done similar things: years ago San Francisco’s Orrick, Herrington & Sutcliffe LLP moved staff to Wheeling, West Virginia; Wilmer Cutler Pickering Hale and Dorr LLP recently created a business services center in Dayton, Ohio; while Pillsbury Winthrop Shaw Pittman LLP is in the process of creating a global operations center in Nashville, Tennessee. On a similar note, Axiom decided to create an office in Belfast, Ireland based on tax and other incentives offered to the firm and Riverview Law in the UK has a large operation in Wirral, near Liverpool, to take advantage of cost savings.

The precedents are there, yet are Canadian firms listening?

Probably not.

Canadian lawyers typically don’t compete by reducing their own costs – that type of competitive advantage is lost on them. Gowlings seems to be the lone Ontario exception as they opened operations in Hamilton, Ontario (quite some time ago) for reasons that must be related to costs savings. There still seems to be a notion that moving non-legal, or even legal functions to low cost centres is not the Canadian way.

And Canadian consumers of legal services are all the poorer for this mentality.