In part 2 we look at ‘Law Firm Outsourcing – The Story so Far’ and ‘Practical Tips for Effective Outsourcing’. It can save you money and allows you to focus on the thing you do best, i.e. being a good lawyer. But is it really that simple?

Much of the publicity about non-legal outsourcing in the legal sector has focused on the larger firms. For example, in May 2010, City law firm CMS Cameron McKenna announced that it was outsourcing its non-legal office functions (e.g. accounting and finance, HR, training, IT, marketing & communications, library and information etc) to Integreon in a multi-million pound deal. See link 1 below.

In December 2009, Beachcroft and TLT Solicitors joined a third law firm Osborne Clarke in outsourcing their entire library services in another agreement with Integreon to create the first shared information centre in the UK legal sector. See link 2 below.

However, a 2010 survey by Core Legal member IRN Research analysed responses from 36 law firms with 10 partners or less and found that almost half of these were outsourcing something:

• Just under half of smaller law firms are outsourcing some non-legal activities but these are concentrated on areas such as recruitment, accountancy, typing and secretarial support, and IT and software support.
• Outsourcing of other activities, such as marketing, market research, and PR, is much less common so far but more are likely to consider in the future.
• Most of the law firms that have successfully outsourced specific tasks and have seen the benefits are willing to consider other areas for outsourcing but there are few smaller law firms that have so far outsourced all their non- legal tasks.
• For those firms reluctant to outsource, tasks such as marketing, PR, and even IT support are taken on by either fee- earners or support staff in specific law firms.

One smaller law firm that has outsourced virtually all of its non-legal activities is Woolley & Co and Andrew Woolley notes that it is about improving efficiency as much as cost savings:

“ It is a truism that lawyers are good at law but nothing else! Certainly we tend to be very poor at admin, IT, HR, web, marketing etc. So it seems a clear case to outsource even if only to get it done right – any cost saving is a bonus. My firm is extreme in that our whole ethos has always been to outsource everything we can. After all, clients outsource their legal issues to us! What can be more critical than that?”

Andrew adds “The law firms that survive will be the ones who get all their lawyers billing 4 chargeable hours per day minimum at the top rate concentrating on what they do best and leaving the rest to the experts”.

As well as individual law firms taking the outsourcing route there are also “shared outsourcing” schemes starting to appear.

One pilot scheme involving 10 small law firms is already underway in Greater Manchester (see link 3 below) with these firms setting up a single management company to manage their shared support services. The scheme has been initiated by Manchester Law Society.

Outsourcing is also particularly popular with virtual law firms, like Woolley above, and more of these are emerging. The need to cut overheads during the recession, demands for more flexible working and a better home-life balance, improvements in IT solutions and systems, and a more competitive environment are factors driving the significant increase in virtual law firms in recent months.

These are firms which have largely dispensed with physical premises – they may still have a small central administrative office somewhere – and allow their partners to work from home or a satellite office.

Outsourcing – Quick Tips

Here are some quick tips to bear in mind when considering an outsourcing option:

• Spend some time evaluating variousoutsourcing options before you select the one for you.
• Do not base any outsourcing decision on price alone – the lowest price option is not always the best.
• Consider the qualifications and experience of potential outsourcers and, in particular, clarify exactly who will be doing the work.
• Be clear about the precise service levels required and being offered, think about a Service Level Agreement (SLA) if appropriate.
• Support of relevant internal staff is important so keep staff informed and engaged from an early stage and try and take them with you on the outsourcing journey.
• Look at the legal, security, and compliance issues surrounding any outsourcing deal. You are responsible for the actions of your internal staff and liable for these actions. Clarify the position when a task is outsourced.
• Check out some existing clients of the outsourcer, ask for references.
• Make sure any potential external supplier used understands legal practice.

In Part 3 we look at a strong growth forecast for busines process outsourcing and present a number of outsourcing success stories.

1 http://www.lawgazette.co.uk/news/cameron-mckenna-signs-deal-outsource-middle-office-functions

2 http://www.legalweek.com/legal-week/news/1565496/beachcroft-tlt-sign-share-outsourced-library-services-oc

3 http://www.lawgazette.co.uk/news/smaller-firms-collaborate-north-west

Related posts:

1. Outsourcing of non-legal services – smaller law firms are beginning to see real benefits and savings
2. Outsourcing for Smaller Law Firms: Core Legal White Paper – Part 1 of 4