BT has begun an extensive legal process outsourcing (LPO) tender for its work in India and the US and is expecting to introduce a new provider for UK work as the telecoms giant moves to outsource over 30% of its UK global services legal work.
The move comes as the FTSE 100 company’s alternative business structure (ABS) arm, BT Law, has won three new contracts and looks to be used as a platform to turn the legal department from a cost to a profit centre, including potentially offering employment law advice.
BT general counsel (GC) Dan Fitz and new director of compliance Gareth Tipton say they are midway through the tender with providers including incumbent UnitedLex – which already takes on 30% of the global services division’s legal work in the UK. The process will take up to three months to complete.
Tipton took over as head of compliance and chief operating officer in February this year after Fitz’s appointment as company secretary last year saw the legal department expand from 400 to 500 staff.
The tender is significant as UnitedLex, which has since 2010 undertaken work for BT in the US and India, also acts as gatekeeper to triage legal work under what BT call its ‘front door’ policy. According to a pre-agreed criteria UnitedLex either retains the work, forwards it on to the legal team or reserves it for a dialogue over the appropriate recipient.
The model, under which UnitedLex works on BT’s standard products and services, including negotiating in writing with clients according to pre-agreed preferred forms, has enabled BT lawyers who were focusing on deals to focus on higher value work.
In a challenge to the more traditional in-house versus external law firm set-up, BT is moving towards a multilayer approach to staffing its legal work, including increasingly relying on flexible providers such as Obelisk, launched in 2010 and chaired by the former GC of National Grid, Helen Mahy.
Fitz said: ‘We’re testing all parts of the new legal landscape. It used to just be who is on the panel but more and more corporates will be looking at the entire ecosystem and for legal support that can flex up and down without spending a lot of money.’
The move comes as BT Law, which started out as BT’s claims management arm for its fleet of cars, has won three third-party contracts for companies with large fleets, including Network Rail, and is looking at extending its portfolio to personal injury and employment work.