Biglaw, Cheapness, Outsourcing

If You Liked Living In Boston, You’re Gonna LOVE Living In Lexington, Kentucky

I guess Lexington, Massachusetts, wasn’t quite desperate enough to offer a big firm a better deal.

Last month we told you that Biglaw firms have encountered success in putting offices in small cities staffed with non-partner track associates and back office personnel.

The trend now continues with Bingham McCutchen’s announcement that they are opening a “Global Services Center” in Lexington, Kentucky. The center will eventually house 250 employees who will handle administrative support functions for the firm. Some current Bingham employees will be given the option of relocating from Boston to Lexington.

Hmm… this reminds me of another person who went from Kentucky to Boston and then back to Kentucky. “Newbury Street isn’t walking through that door, Bingham staffers. Quincy Market isn’t walking through that door, and Fenway Park isn’t walking through that door. And if they did, you’d still be living in Lexington freaking Kentucky.”

Oh, I kid. In all seriousness, though, and from the firm’s perspective, in-sourcing is clearly the way to go…

If you are a fan of America, you’ve kind of got to love Bingham’s move here. The firm isn’t pulling a Romney and trying to seek cost savings offshore. Instead they’re investing in one of the many developing economies right here at home. U-S-A, U-S-A.

This is part of the future, folks, and so we all better get used to it. The Bingham memo (which you can read in full on the next page) doesn’t specifically mention staffing the office with a lower caste of non-partnership track associate (as Orrick does in Wheeling, West Virginia). But I speculate that after the center is up and running with the necessary supportive staff, full-time Lexington doc review monkeys won’t be far behind. The business savings are too compelling.

For now, the Center is slated to become Bingham’s ultimate back office, all for Kentucky prices:

The center will eventually house approximately 250 employees, who will be relocating from existing Bingham offices or hired from the Lexington area. Subject to final approvals of pending state and local economic development incentives, the Bingham Global Services Center will be located in office space in the University of Kentucky’s Coldstream Research Campus business park. Bingham has committed $22.5 million in establishing the center over a period of time. The investment includes building improvements, start-up costs and rent for 10 years. It will bring together in one location administrative support staff positions from a spectrum of professional disciplines, including: finance and accounting, human resources, information technology, knowledge services, marketing, operations, and risk management. Bingham has approximately 1,000 lawyers and more than 900 staff in 14 major offices in the U.S., Europe and Asia.

After a comprehensive and thorough review, Bingham selected Lexington because of its access to a deep and dynamic workforce, a developed academic community, and a vibrant quality of life, among many other factors, said Bingham Chief Operating Officer L. Tracee Whitley.

At least some Bingham employees will be offered the chance to relocate to Lexington. And while I enjoy making fun of Kentucky as much as the next guy, perhaps a job in Kentucky is better than unemployment in Boston:

[COO L. Tracee Whitley] added that “the vast majority of our employees who are affected by this decision will be offered the opportunity to relocate, and we sincerely hope that many of them will choose to do so.”

Obviously, there will be people who simply can’t pick up and move to Kentucky. But back office staff working in big, expensive cities should probably get used to this. The rent is too damn high in big cities, and firms can save a lot of money by moving these functions to the interior of the country — or completely offshore.

It’s the future, and you’re living in it.

(Check out the full press release on the next page.)

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