Hi @hewjet, first up apologies for the attack and if i misread your comments - that was a poor approach on my part.
Regarding Legalfund and Hillcrest I need to make myself more familiar with these specific companies than I currently am so will not comment at present.
RE Outsourcing - it currently isn't going on at Shine, however if it could be introduced as a competitive advantage then this should be considered. If it turns out to be successful then while this would initially lead to an advantage as you say there is nothing stopping competitors doing the same - and they surely would. It should be noted that only larger competitors are likely to take this approach. A mum and dad legal firm isn't going to outsource in this way and most PI legal firms are small. However Slater and Gordon and Maurice Blackburn certainly could employ this approach. Due to market forces this would drive down the fees charged by these large companies. The smaller ones would not be able to compete on price anymore and would be more likely to try and sell the farm driving down the price of acquisitions. The value of what is being acquired would also be reduced in real terms. Essentially outsourcing (if advantageous) would speed the consolidation of the industry.
A competetive advantage for the bigger players (including Shine) though not against each other per se.
There are of course many short and long term disadvantages to outsourcing that offset perceived cost improvements. If you have familiarity with the IT industry it's somewhat analogous. Though i imagine that the law would have fewer issues overall.
Short term:
* Technical subject matter knowledge is lost when outsourcing. There needs to be knowledge transfer between staff being made redundant and new staff. For obvious reasons outgoing staff are not motivated to assist this process. This can be mitigated via a phased approach however this is often not practical. There are massive (often unaccounted for) financial costs to not executing this properly.
Both short and long term:
* In terms of transmission of business subject matter knowledge (for law we could consider this to be details of the case) there are cultural and language barriers to our outsourced lawyer interacting with stakeholders in Australia. Importantly this includes both the Clients themselves and the Barristers (who must be physically located in Australia).
This issue may lessen over time as the outsourced lawyers become better at communicating with australian stakeholders and the Australian barristers would also improve; however we cannot make the same demand of customers. This will always be a worse customer experience.
Super Long term:
* global market forces will eventually even out and remove the competitive advantage of outsourcing, as richer countries are required to compete on price on a more even playing field with poorer ones.... or if you want to put it another way: as countries like india and China become increasingly rich people in those countries can demand better and better salaries. This may result in outsourcing to other places where labour is cheap (e.g. Africa) but then the same thing will happen and we will eventually run out of poor countries and the free market will eventually even everything out. Yay capitalism.
* though far off - automation must also be factored in. This likely is further off for law than manufacturing however many tasks being done by our outsourced lawyer in india would be chipped away at by computers as they become increasingly prominent. Not a major point right now but to be born in mind.
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