Foges on Deloitte’s LMS: ‘The Sky is the Limit to How Big We’ll Get’

Artificial Lawyer spoke to Emily Foges, the new lead partner of Deloitte’s Legal Managed Services (LMS) group. We explored the group’s growth plans, how it will serve clients, leveraging legal data, not using the billable hour, and how it will work with its US-based Deloitte counterparts.

There is a full AL TV recording of the interview below.

One of the key insights is that the LMS group, nominally based in the UK, but serving Europe and the Middle East as well, has won their first major client since Foge’s arrival, a FTSE 100 business.

And that of course puts in context Foge’s headline statement that ‘the sky is the limit to how big’ the LMS can get. However, it’s important to note that this is basically right, Deloitte can scale up the LMS group as much as it wants in order to meet demand. As long as it’s making money and meeting client needs a business the size of Deloitte, which has revenues of around $46 billion per year (i.e. far more than the entire top 100 UK law firms combined), could easily accommodate a very substantial LMS group.

If that’s raised your interest levels, then here’s the AL TV interview. Press play to watch/listen inside the page, (23 mins in total).

AL TV Productions. Sept 2020.

So, how will they serve their clients with the LMS? Foges continued that they will be providing a range of work including areas such as contract review and remediation, among other services.

Legal data will be gathered and studied. They will look for things such as negotiation patterns and that will in turn help to improve their service and also feed back useful insights to the corporates.

And team size? At present they are just limbering up and Deloitte had been under a hiring freeze because of the pandemic. But, now things are rolling again.

There is no ‘mothership’ base as such, and much of the LMS staff are distributed remotely around the UK and Europe. And that’s an interesting point in relation to costs. Deloitte won’t be buying a new, super-expensive office in London to house the LMS group.

And the billable hour? How will the LMS charge clients? Foges noted that: ‘We don’t want to bill by the hour.

They will charge on volumes and fixed prices for now, but ‘would like to have a subscription model’.

She also noted that: ‘How corporates are consuming legal services is changing dramatically.’

If it’s dramatic for all is open for debate, but some certainly are embracing everything the evolving market has on offer now – and that is going to be an increasing challenge for law firms with a more traditional outlook and that don’t move with the times.

In terms of tech and process improvement, Foges added that in the long-term: ‘The price of legal services will come down. That’s what automation does.’

And finally, the US. Naturally, the US equivalent of Deloitte’s LMS cannot provide regulated legal services, although it can do plenty of work that is within the local barriers. What the US business and the UK/European LMS group can do however is refer work to each other where it makes sense.

As Foges pointed out, there could be a global, US-based company that is working with the American Deloitte legal business services team, and then sends over some work to the UK where the regulated lawyers in the LMS can help, perhaps because it’s an issue that goes beyond local US legal jurisdictions.

The final question was: could the UK team build an American legal services capability to then serve the US, thereby avoiding any Bar problems? Foges stated that they haven’t specifically looked at this yet, but didn’t rule it out in theory if Deloitte’s regulatory and risk teams allowed it.

Of course, we are not there yet, and in fact are a long way from anything like that. For now the focus is on growing the client base and then scaling the team in tandem to meet that demand.

This is just the beginning, but Deloitte has certainly chosen the right moment in history to expand this business. Conditions have never looked so supportive of this type of approach. Maybe the sky is the limit for this one. We shall see.