A should cost model is an all-important technique for deriving and forecasting the actual cost of a product or service over the forecast period. It serves as a competitive edge for supplier negotiations by determining the actual price for the cost components. The outcome helps procurement leaders to understand the detailed fact-based cost drivers for the category.
In the LPO category intelligence study, we have estimated the pricing for the key cost components. Lawyers’ fees are the largest cost component of LPO services. They account for more than 35% share in the overall service cost. Lawyers’ fees are significantly affected by the Covid-19 pandemic. Firms that use cloud-based portals and CRM systems to increase client access performed better than conventional firms, which were forced to charge lower rates due to the pandemic. Moreover, lawyers working in law firms witnessed lower fees growth (~1-2% per year) compared to independent lawyers (>5% per year).
Every organization and its procurement team wants to negotiate the best deal while procuring a set of products or services. Rate benchmarking uses price/cost comparison of more than one set of products/services to analyze the most efficient combination, thus helping the procurement team to achieve an optimum rate.
Geographic location is one of the most important aspects while analyzing the rate benchmarking of legal process outsourcing services. In our research, we have analyzed the fees of lawyers across 48 U.S. states. Using rate benchmarking analysis, we found that Washington, New York, California, New Jersey, and Delaware have the highest lawyer fees. The lawyer rates in these states are approximately 30% higher than the U.S. average. Meanwhile, states such as West Virginia, Iowa, and Oklahoma have 23% lower lawyer rates than the U.S. average.
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Labor is one of the key components of costs incurred while offering a product or service. As such, understanding the pricing structure of salary is important for organizations when selecting an appropriate supplier and building a negotiation strategy. It is also essential in determining whether the category under focus should be outsourced or built in-house.
As per our research, legal associates at Morae Global and QuisLex earn 22% higher salaries than those working in other leading companies, such as UnitedLex and Mindcrest. However, the YoY increment rate in such companies largely depends on the KRAs.
The continuous tracking of developments in the supplier landscape can be a cumbersome task for organizations. Our newsletter service helps organizations to stay abreast with the latest developments and innovations, enabling them to avoid disruptions in the supply chain. Outsourcing such activities enables clients to focus on their core offerings. Our research on the legal process outsourcing market has identified the following developments:
In September 2021, UnitedLex, a leading technology and legal services company, announced the acquisition of BlackStone Discovery. With this acquisition, UnitedLex added BlackStone's range of innovative offerings to its portfolio. The offerings include services in forensics, eDiscovery, investigations and incident response, trial support, and managed review.
In August 2021, Morae Global Corporation, a leader in digital and business transformation for the legal industry, announced the expansion of its North American and Asian operations and business with the strategic acquisition of Adaptive Solutions, Inc., a Philadelphia-based information management provider.
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Component wise cost break down for better negotiation for the client, highlights the key cost drivers in the market with future price fluctuation for different materials (e.g.: steel, aluminum, etc.) used in the production process
Offering cost transparency for different products / services procured by the client. A typical report involves 2-3 case scenarios helping clients to select the best suited engagement with the supplier
Determining and forecasting salaries for specific skill set labor to make decision on outsourcing vs in-house.
A typical newsletter study by capturing latest information for specific suppliers related to: M&As, technological innovations, expansion, litigations, bankruptcy etc.
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