He remembers Fred Duncan, a next door neighbour in Wollongong, who returned to Australia after surviving being a prisoner of war in Changi. Fred, he says, was the man who nudged him onto the path to becoming a lawyer.

“He would talk to me about fairness, and lies, and things like that. I’d hit my soccer ball or rugby league ball over the fence and kill his tomatoes and he’d make me argue why he should give my ball back,” Osborne says. “He wanted me to be aware that when you say or do something, you affect other people. I was only 10 but I understood some of it.”

After graduating with a commerce and law degree from the University of New South Wales, he went straight to a law firm in Wollongong called Russell McLelland Brown, which was then still a small law firm of about 20 people. Now called RMB Lawyers, the 132-year-old firm has around 130 lawyers and staff, and 11 offices across New South Wales. Osborne is currently RMB Lawyers’ managing partner.

Osborne is also the founder of Unison Outsourcing, the country’s first local legal outsourcing business. Since its launch in 2015, Unison has been getting quite the warm welcome in the industry, he says. The business is also helping break down the “Berlin Wall in law.”

Breaking down the wall

Osborne has been a lawyer in regional New South Wales for 30 years. Over that time, he has come to use the expression “Berlin Wall in law.”

“The ‘Berlin Wall in law’ is that all the corporate work from the largest corporations in Australia is performed in capital cities. The ‘Berlin Wall’ for me means none of that work will ever get past the wall and be produced in regional Australia. And there’s some very, very talented lawyers and people in regional Australia,” he says. “Unison was designed to break down the ‘Berlin Wall.’”

About nine years ago, he started studying the LPO market and model in India and less so in the Philippines. He started to do his own financial modelling for an LPO business in regional Australia and realised it could work.

“My modelling showed that we could produce large volumes of low-end commercial work that always come from capital cities in regional Australia. I do it in Wollongong and Nowra at similar pricing to India but at what I believe is a higher quality, because we understand the nuances in Australian law and the cultural nuances in Australian law,” he says.

He and his team then calibrated Unison under the codename “legal dome.” RMB Lawyers sent a whole heap of work to the dome and after 18 months, Unison got accreditation from regulators. From the start, Osborne thought the business could achieve some significant goals.

One was to perform high-quality low-end commercial work for capital city-based corporations and legal firms, and another was to break down the wall so that commercial work would come to regional Australia rather than going outside of the country. It could also help a lot of young lawyers just starting out.

“There are a lot of young lawyers coming out of universities and the jobs that they would normally go to in the city are not available because the work they would normally do is now being outsourced,” Osborne says. “So we could preserve jobs and the economy by keeping the work in Australia and giving people the perfect training ground to later work in a large law firm. Aside from giving a great service for low, fixed fees [at a] high quality and high volume, it’s also a fabulous training ground for people coming out of university to learn how the commercial world works.”

Warm reception

The market has so far been very supportive of Unison, Osborne says. That’s both from looking at how clients have reacted to the services they provide and how the staff feel about working in the company. He says that Unison attracted business even though it didn’t get to promote its services at first.

“I think we’ve been really lucky. We opened the doors and we were just about to do some marketing and we didn’t get a chance. We were approached immediately by two of Australia’s biggest corporations independent of each other … in August 2015. We’re still working for both of them,” he says.

The work Unison is now doing has also gone beyond what traditional outsourcing firms have been getting.

“A lot of that work has never been sent to a law firm before. It’s work that’s done internally that’s quasi-law that they don’t outsource ever. Some are very menial tasks and some are more sophisticated tasks,” he says.

Businesses particularly love the idea that when they get additional projects, they won’t incur hiring, training, office space, setup, and exit costs, Osborne says. Companies are now also realising that it doesn’t matter what building teams are in Australia, he says.

Unison’s people also appear to be quite happy working at the company, even though there were first-day jitters.

“The staff initially was nervous because we were looking for work and we had just a couple of jobs and it was fairly new to us. But everyone is at a different space now. They’re confident about the work. They like the work. Because they do a range of projects, even though some of the work is quite repetitive, you move from project to project,” Osborne says. “The new lawyers and the law students are very engaged by just about anything. They’re just so keen and grateful to be getting a start working in the commercial world.”

This has made maintaining morale easy, Osborne says. It has also led to an impressive retention rate.

“So far, the morale and staffing has been very easy. I can’t remember the last exit we’ve had. I don’t think we’ve had an exit in the last year, which is phenomenal in law,” he says.

Untapped potential

Osborne sees a lot of potential in regional Australia that isn’t being utilised. That potential could significantly benefit the business of law and myriad other industries, he says.

“The possibilities and opportunities for outsourcing to regional Australia are huge. It’s not just in law, it’s in everything you can think of. It’s in logistics, warehousing, decentralisation of government, software production, accelerator models, and accounting,” he says. “It’s all about the low cost base with high-quality, well-trained people who just choose to live in an area where there’s less commerce.”

Big centres in regional Australia, like Wollongong, offer a lot of incentives, including better “work/life integration.”

“There are very significant and stable employment pools. Unlike capital cities, people in regional Australia are prone to stay in the same job for longer periods, which is excellent and absolutely fundamental to running an outstanding outsourcing business. They get to live in the country where it’s cheaper to live so they get what I call work/life integration. I don’t like work/life balance. I like work/life integration. Work/life balance tends to indicate that people are lazy or don’t want to work hard,” he says.

And Unison is working because of these factors, even though it’s located in areas that some people tend to misunderstand.

“It starts with Unison financially works because we have a much, much lower cost base in regional Australia than in Sydney, Melbourne, Brisbane, Perth, [or] Adelaide. It’s just a fact of life. It doesn’t mean we’re stupid or we’re not good. It just means houses cost half as much, groceries cost less, transport costs less, and we can walk to work,” he says.

Interesting trend

Osborne is actually seeing an interesting trend, with capital city lawyers becoming increasingly interested in moving to regional centres exactly because of those advantages.

“Australia and the world is kind of just realising how much value there is to outsourcing to regional Australia. In many ways, regional Australia haven’t had a lot to shout about over the last 10 or 20 years. Regional Australia loses resources, loses its talented people, [and] loses its services,” he says. “But in the last five years, I’ve noticed something really significant. I’m getting more applications from city-based lawyers who want to come and live in regional Australia than I could have ever dreamed of. They’re at all stages in their career. They’re at the beginning, they’re at the middle and some of them are more towards the end. It’s extraordinary.”

Osborne says that among the last 10 lawyers he’s hired, five have been over 50 and four of them have been from capital cities.

“I’ve not seen this at all before. It’s a new one for me,” he says, adding that housing affordability and planning ahead for retirement could be driving people to regional Australia.

Unison is benefiting from this trend, and the fact that outsourcing suits globalisation, Osborne says.

“I think when globalisation became a phenomenon and then the global financial crisis came along and butted heads with globalisation, everyone thought the answer was to have mergers and acquisitions in capital cities across the world,” he says.

“The outsourcing model absolutely suits globalisation. It is a tremendous assistant to globalisation because you have to become more efficient. You’re working with a lower cost base that seems to become commoditised. You have your fantastic talented workers in your capital city, but you also have a ton of work teams that just down the internet from you…that’s really part of your organisation that you can turn on and off. And you don’t have the costs of leave, sickness, hiring, and exits. It’s consistent flow in your production.”

The challenge of commoditisation

Osborne considers commoditisation to be the biggest challenge the business of law is facing.

“I’d say commoditisation of law is the biggest challenge because we’ll all be working with smaller profit margins than we had in the past,” he says. “That doesn’t mean you can’t make a lot of profit. It means you have to change your processes to reduce the cost of production to make a smaller profit margin sing.”

It doesn’t help that some lawyers are averse to change.

“With commoditisation, the major challenge with that is lawyers of all ages refusing to believe that part of their work is becoming commoditised and refusing to even consider the need to change to keep a business and a brand sustainable for the next generation of lawyers. Unfortunately, I’ve seen lawyers day in, day out getting toward the end of their time saying, ‘Why would I change? I’ve done very well, thank you very much. Do I really care what happens to my firm when I go,’” he says. “So it’s commoditisation, getting lawyers to accept it and do something about it, to change processes, and develop your legal brand in those circumstances.”

The business, Unison, is staffed by Australian lawyers, law students and paralegals.

According to a statement, the location of the business allows it to take advantage of the significant employee pool from the university’s law school. Its location also sees it nab the benefits of lower leasing costs, which it notes are half that of Sydney, and the higher staff retention rates with staff commuting shorter distances and enjoying a better work/life balance.

Speaking ahead of this week’s Shared Services and Outsourcing Week, a spokesperson from the firm noted that Unison helps unlock the growth potential of regional cities and demonstrates the value of selecting Wollongong as a place where it operates out of.

According to Unison, its key point of difference is that unlike other outsources, its staff are fully qualified Australian lawyers, Australian paralegals and Australian support staff.

“Unison’s Human Resource Policy is best practised in the areas of recruitment, education, training and personal and professional development,” the firm said.

“Our lawyers hold NSW practising certificates and undertake high levels of Continuing Legal Education.”

The business noted that it is transparent in its approach, something it says provides its customers peace of mind.

“We believe transparency is the key to building a relationship of trust with our customers,” Unison said.

“From the very first time you make contact with us you will see that we are open, honest and upfront about all aspects of our business and our operations.

“Unison is a law firm corporation, fully regulated by the Law Society of NSW and Office of the Legal Services Commissioner. Offshore outsourcers are often not regulated by any professional body. Unison is fully insured by LawCover and other PI insurers. When you work with Unison, you can rest easy that we take responsibility for the work we produce.

“Offshore outsourcers do not take the PI risk. In fact, the first thing they will say is that they are not law firms and that the risk stays with you.”

The prolific use of LPO's in the market has ensured the benefits and disadvantages of outsourcing are well documented by industry commentators. Benefits include reduced costs, increased flexibility and shortened turnaround times such benefit must be balanced against increased data security risk, confidentiality and ethical issues that may arise.

The problem is when choosing to outsource the decision-making process only focuses on the impact at the client-lawyer level, which gives rise to the question: Are we giving enough thought to the long-term impact outsourcing is having on the Australian Legal Profession?

Let's begin by acknowledging that the group most affected by the increased use of LPO's are paralegals, graduates and junior lawyers. Services traditionally performed by paralegals and entry-level lawyers, low-level and quasi legal work such as document review, due diligence and legal research, are among the services most outsourced. This point has not been overlooked by the Australian Law Students' Association (ALSA).

In a position paper published in 2013, ALSA expressed their concern about the future prospects for law graduates (the Paper), highlighting that law student supply already far outweighs the demand for legal workers with the ratio being close to 1:3, with the major Australian firms routinely receiving 30-50 applications per graduate position being offered. If those figures were not concerning enough, bear in mind they do not include the ever increasing admissions across all universities following the Government pursuing deregulation in the education sector.

From an economic and business perspective this detrimental impact on graduates can be justified by citing reduced costs for firms in the form of lower wages, office space and training spending, reduced legal spend for clients, and easing the work loads of senior lawyers to focus on high value, technical work. What about the noneconomic costs a firm suffers as a result?

By outsourcing junior roles a firm loses the ability to train graduates into corporate thinking from the outset and foster a sense of loyalty to the firm. A smaller graduate pool means fewer lawyers in the market place networking and attracting clients to the firm, fewer lawyers to identify the future rising stars from and fewer lawyers within the firm's ranks for succession planning.

Some universities in Australia are already looking at trying to combat the problem the graduates are facing by changing how legal education is delivered. The thinking is that the learning of law students should be accelerated so they can hit the ground running.

Professor Warwick Gullett, Dean of University of Wollongong's Law School, is currently overseeing a review of the University's Bachelor of Law program and aims to increase the practical training component of the degree to ensure UOW graduates are employable.

However, it is arguable that outsourcing on its own is not the problem. The benefits of outsourcing far outweigh the disadvantages and as a business model it should be embraced. The problem is in most instances outsourcing means offshoring and for me, therein lies the problem. The traditional roles the graduates cut their teeth on are not just being lost, they are being lost overseas.

No amount of formal education can substitute what level lawyers learn coming in practice and working their way up from the ground. So is there an alternative solution? I am a firm believer the answer is yes, and it combines the best of both worlds. The answer is onshore outsourcing.

I am COO of Unison Outsourcing. Unison is an LPO that operates entirely onshore in regional New South Wales using Australian lawyers, paralegals, graduates and law students. Unison predominantly performs 'commoditised' legal work, the exact type of work that graduates and junior lawyers would traditionally perform in a traditional law firm.

At Unison we believe that when a customer aligns with us, we are doing more than just performing their commoditised style of work, we are also training the next generation of lawyers and potentially the customer's future recruits. Overtime many of our team members become intimately involved in the customer's business. We actively encourage secondments into the customer's operations where appropriate and we take great pride when a team member leaves to join our customer.

To run a business like Unison you do have to acknowledge many of your team members will use the time with your firm as a stepping stone on their career path. Instead of spending large amounts of resources trying to retain team members that are looking for the next challenge, we have embraced our role in training the next generation of up and coming lawyers.

We at Unison are proud of our modest efforts in this area but we believe that more should be done to challenge the current offshore trend and give support to the Australian legal profession. It is our hope that customers consider alternative options to offshoring by looking to New Law providers such as Unison for innovative delivery models that benefit the profession as well as the end client.

By Paul Bartholomew, chief operating officer, Unison Outsourcing.

The brainchild of 130-year-old Wollongong firm RMB Lawyers, Unison Outsourcing does what outsourcing businesses in India and the Philippines do, but in regional Australia. Their client base is a 50-50 split between in-house legal teams and law firms.

“We knew if we could produce high quality work at a similar price to competitors in India and the Philippines, in regional Australia with our Australian skill set demand would be strong, but we didn’t expect it to be as strong as it and we didn’t know who would be more interested,” CEO Craig Osborne told Australasian Lawyer.

Demand has been so strong that the firm hasn’t yet implemented the marketing strategy they devised. He said the firm is now looking to move to a bigger premises following the high demand and expects Unison to outgrow RMB Lawyers in a few years.

Born out of a rapidly evolving legal market, the Unison idea is to work with clients in order to improve the efficiency of current processes. Osborne said it takes around four months to properly bring on a new client.

"The best customer for us is someone who is looking to change the way their processes work, finding us and then talking to us because they are already on board and innovative themselves," he said.

"[They're] working hard at ways they can make their processes less expensive but just as importantly, more efficient and better.

"We're being located by people all around the country."

The firm works in teams of lawyers with different levels of experience and secondees from RMB, even training up 4th and 5th year law students from the University of Wollongong Law School.

Following a two-year internal trial where Unison picked up work only from RMB Lawyers, Osborne said the firm is now picking up work that would never have traditionally been sent to law firms. But what started with simple document review work is quickly expending into finance and superannuation work.

"The largest corporations that we're dealing with are getting us to work on largely on their internal processes, work they haven't traditionally sent to traditional law firms because it would be too expensive to do so," Osborne said.

"Being Australian lawyers, we understand not just Australian law but its application and custom and we're backed by a reasonable law firm of 130 years' experience," Osborne said, pointing out that as an Australian firm, Unison is governed by the Law Society of New South Wales and insured by law cover.

The cost pressures of commoditisation will continue to change the way lawyers work, Osborne predicts.

"We think that all significant players in law in capital cities whether they are in-house or not will be looking closely at deconstructing legal processes, dividing them into their constituent parts and working out which parts should be performed by the high end lawyer and the capital city law firm [and which parts should be performed by an] in-house legal team and then [which parts should be] outsourced to an external provider."

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Barriers to Using LPOs – Risk & Quality

Legal process outsourcing is more complex in some ways than other business process outsourcing, mainly because there are significant legal thinking skills that must be overlayed onto the outsourcing of law.

LPO can deliver significant benefits to law firms and in-house departments. There is significant interest in it. The rise of outsourcing is directly linked to the commoditisation of work and strain on resourcing available to do legal work.

In the Australian context, the outsourcing decision involves sending work to India, Philippines or Africa. These providers offer a cost-effective service across a broad range of tasks. In many cases, overseas outsourcers have experience working with law firms and have adapted to Australian standards.

However, we know that users of outsourcing report that they are uncomfortable with sending work offshore. Once again, legal work is unique. Sending Australian work to non-Australian lawyers to an office overseas is a bar too high for many Australian lawyers. And as any offshore outsourcer will admit, they are not law firms and take no responsibility for the work.

Even domestic providers may present challenges to law firms. Handing off control to another entity can be difficult for lawyers committed to providing the highest possible service to their clients. In some cases, there may be a transition period while the outsourcing provider learns your firm’s needs and comes to understand your expectations.

I should know. As a managing partner myself, these two barriers alone make the risk of outsourcing overseas a little too high for me. This is why we have created Unison Outsourcing – a project for which we were recognised as a finalist in the recent ALPMA/InfoTrack Thought Leadership Awards.

Choosing an Outsourcing Partner

Most lawyers understand the benefits of outsourcing. Partnering with a quality outsourcer can help you meet objectives such as increasing profitability, increasing efficiency or using your people in more effective ways. However, the leadership and management skills required for success in an outsourcing relationship are critical.

Legal process outsourcing works best when a high quality law firm, or in-house legal team, works closely with a high performance legal process outsourcer. Too often, however, not enough due diligence is done when choosing outsourcers.

12 critical issues to consider when choosing an outsourcing partner

1. What metrics/ assurances does the LPO make to ensure that the work will be returned smoothly, cost effectively and at high quality?
2. Letting your clients and stakeholders know that it is happening. Clients and stakeholders are generally very positive about a high quality legal process outsourcing arrangement. With legal work, outsourcing to an Australian provider will reassure them.
3. Use a provider that has a deep understanding of Australian law, its culture and application.
4. Where possible, use a provider that is a law firm governed by Australian rules and ethics.
5. Don’t accept outsourcers who say that they take no responsibility for the work they do. Spend the time to find one that is fully insured and subject to Australian law.
6. Use an outsourcer that is as sophisticated as you in terms of business, change agility, leadership and use of technology.
7. Choose a provider that understands that not all law firms or in-house teams have the same needs. The truth is that every client in this space is very different. The approach to delivery needs to be tailored to your needs.
8. Use outsourcing as an opportunity to consistently overhaul and improve your internal systems.
9. Outsourcing does not mean you have failed – quite the contrary. You have been doing it since the day your firm began with Barristers. Accept that you don’t have to have a mortgage on intelligence.
10. Understand the capabilities and limitations of the outsourcing service. The outsourcer does not compete with you. It is an extension of your office's back end capabilities.
11. Understand that there will be initial teething problems and the best way to handle them is to work in a research and development phase with your outsourcer with each side bearing its own costs of that process – start with a small part of your business as a test case.
12. In due course, educate your employees to use the service to get the most from it.

Outsourcing is inevitable in legal services, but it must be a decision made with care. In the worst case scenario, outsourcing means entrusting your client information to the hands of an unknown quantity – a scary thought for many lawyers. The good news is that law firms and in-house teams using quality outsourcers will deliver their work at a higher level of performance and quality than their competitors. Lawyers can focus on high-level legal work and keep the paperwork off their desks.

This means happier clients and higher quality work.

In the current market, who doesn’t want to strive for that?

Craig Osborne, Managing Partner, RMB Lawyers & CEO of Unison Outsourcing

The brainchild of 130-year-old Wollongong firm RMB Lawyers, Unison Outsourcing does what outsourcing businesses in India and the Philippines do, but in regional Australia. Their client base is a 50-50 split between in-house legal teams and law firms.

“We knew if we could produce high quality work at a similar price to competitors in India and the Philippines, in regional Australia with our Australian skill set demand would be strong, but we didn’t expect it to be as strong as it and we didn’t know who would be more interested,” CEO Craig Osborne told Australasian Lawyer.

Demand has been so strong that the firm hasn’t yet implemented the marketing strategy they devised. He said the firm is now looking to move to a bigger premises following the high demand and expects Unison to outgrow RMB Lawyers in a few years.

Born out of a rapidly evolving legal market, the Unison idea is to work with clients in order to improve the efficiency of current processes. Osborne said it takes around four months to properly bring on a new client.

"The best customer for us is someone who is looking to change the way their processes work, finding us and then talking to us because they are already on board and innovative themselves," he said.

"[They're] working hard at ways they can make their processes less expensive but just as importantly, more efficient and better.

"We're being located by people all around the country."

The firm works in teams of lawyers with different levels of experience and secondees from RMB, even training up 4th and 5th year law students from the University of Wollongong Law School.

Following a two-year internal trial where Unison picked up work only from RMB Lawyers, Osborne said the firm is now picking up work that would never have traditionally been sent to law firms. But what started with simple document review work is quickly expending into finance and superannuation work.

"The largest corporations that we're dealing with are getting us to work on largely on their internal processes, work they haven't traditionally sent to traditional law firms because it would be too expensive to do so," Osborne said.

"Being Australian lawyers, we understand not just Australian law but its application and custom and we're backed by a reasonable law firm of 130 years' experience," Osborne said, pointing out that as an Australian firm, Unison is governed by the Law Society of New South Wales and insured by law cover.

The cost pressures of commoditisation will continue to change the way lawyers work, Osborne predicts.

"We think that all significant players in law in capital cities whether they are in-house or not will be looking closely at deconstructing legal processes, dividing them into their constituent parts and working out which parts should be performed by the high end lawyer and the capital city law firm [and which parts should be performed by an] in-house legal team and then [which parts should be] outsourced to an external provider."