by Beth Bacheldor

A U.K. Law Firm’s Big Outsourcing Deal

May 18, 2010
IT Leadership

CMS Cameron McKenna Inks 10-year, $852 million deal with Integreon. What’s it all mean?

Many in the industry have been saying that the big, multi-year IT and business-process outsourcing deals are a thing of the past. Don’t tell that to one U.K. law firm. CMS Cameron McKenna has inked a 10-year, Ł583m agreement with Integreon. That’s about $852 million, by the way – a big deal by any measure.

Integreon, based in India with offices around the world, will manage all of CMS Cameron McKenna’s back-office processes, which include all its non-billable tasks such as reports, research, accounting, human resources, marketing and communications, library and information services and technology functions. The work will be done by an Integreon team in India.

CMS is one of Europe’s top providers of legal and tax services, and CMS Cameron McKenna is its U.K.-headquartered firm. The firm’s lawyers practice all types of commercial law, such as banking and finance, immigration, private equity, and real estate and tax law. According to a press release from Integreon, CMS Cameron McKenna chose to outsource all its back-office functions and processes so that it could focus on its core competency – providing high-end legal and tax services. But it also says it chose to outsource its business infrastructure in order to handle its anticipated growth.

“With a broad and integrated services portfolio that is unmatched in the industry and a unique track record of success with leading professional services organizations, Integreon will meet our needs as a rapidly growing law firm,” Duncan Weston, managing partner for CMS Cameron McKenna, said in a prepared statement.

The interesting aspect to this mega-deal is that it isn’t just about providing a law firm with a business process and IT infrastructure and services platform so the firm can focus on its core business. This mega-deal has ambitions—ambitions that are behind the motivations of both companies. It has been reported that CMS Cameron McKenna will sublet a floor in its London offices to Integreon and transfer as many as 200 support staff into what’s being called a service center. And the law firm says the deal will serve as a business model for support services in the legal sector.

“This initiative meets our strategic goal of providing ‘best in class’ service to our clients and represents a true innovation in the delivery of law firm services for the future,” Weston said in the statement.

So, the deal gives Integreon a big edge up in the legal market, with an established center that’s leveraging lots of expertise and name recognition. And for CMS Cameron McKenna, it allows them to cash in on outsourcing. While I haven’t been able to uncover any details about the deal’s financial arrangements or fee structuring, my hunch is that it’s got some incentive-based pricing and sounds a lot like a joint venture or alliance. Such a deal could mean that both parties stand to profit. I’ll keep my eye on this and I hope we hear more details. Meanwhile, what do you think? Is this deal an anomaly in the current, and foreseeable, downturn? Or does it represent the start of something new?