Outsourcing for Smaller Law Firms: Core Legal White Paper – Part 1 of 4

on 15 September, 2011 Email this Email this - Print this Print this

Outsourcing some or all of your non-legal activities and tasks sounds great in theory – 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? Find out below in Part 1 of the CoreLegal White Paper about ‘Outsourcing for Smaller Law Firms’.

1. Introduction

In practice, there are still many law firms that are reluctant to consider outsourcing perhaps because of fear of losing control of business operations, concerns over poor quality service, security and compliance issues, or higher than expected costs. However, a growing number of law practices, and more and more smaller firms, are embracing outsourcing.

This White Paper aims to describe some of the outsourcing success stories from some UK law firms in future postings. These include:

  • Legal insurance
  • Client surveys
  • Marketing
  • Bookkeeping
  • Law firm sale
  • Public relations
  • Copy-writing
  • Cloud computing

It also outline the types of activities being outsourced and explain some of the basic principles to think about when considering outsourcing.

All the outsourcing examples are from projects undertaken by Core Legal members in the UK. Core Legal is a one-stop shop for legal support services in the UK and its members include legal cashiers, a legal copywriter, insurance specialist, experts in marketing, market research and PR, a software expert and a specialist in law firm mergers and acquisitions amongst others.

2. Outsourcing – Overview

Our focus is on the outsourcing of those non-legal activities and tasks that take place in a legal practice. These can range from day-to-day areas like bookkeeping, HR and recruitment, insurance, IT, secretarial work through to more strategic issues such as marketing, market research, PR, and merger and acquisition advice.

These activities are often referred to collectively as Business Process Outsourcing (BPO) and should not be confused with LPO, or Legal Process Outsourcing, which refers to the outsourcing by law firms of legal tasks such as the drafting of standard legal documents, legal document review, legal research etc.

Cost savings are often the motivation for outsourcing and, in the present financial climate, most businesses are looking to reduce costs and overheads. But outsourcing should be viewed as much more than a cost saving exercise. It is also about:

  • Driving improvements in business efficiency and productivity. It allows an external supplier to take on the responsibility for specific tasks and processes allowing you and your staff to focus on the business’s core areas.
  • Gaining access to specialist expertise which otherwise would not be available within the business, and increase resources. An effective outsourcer should also be there to come up with innovative ideas and processes to help the business move forward.
  • Business flexibility: while many outsourcing deals are relatively long-term and the supplier can build up a relationship with the client, there are also opportunities to use outsourcing for one-off projects or occasional tasks that arise and which cannot be dealt with by an internal resource.
  • Cost restructuring with outsourcing often changing the ratio between fixed and variable costs. With outsourcers often charging on a fee for service basis these variable costs become more predictable and more manageable.
  • Capacity improvements can be achieved without major investment in capital and resources with the risk in providing the excess capacity borne by the supplier.

As we slowly move out of the economic downturn and some law firms look to grow again then outsourcing becomes one avenue to boost growth. Conversely, for those businesses trying to overcome a period of instability then outsourcing can provide resources and flexibility.

In part 2 there will be ‘Law Firm Outsourcing – The Story so Far’ and ‘Practical Tips for Effective Outsourcing’.

To find out more about outsourcing for smaller law firms please contact:

David Mort -Director, IRN Research on 0121 635 5210
Email: david.mort@irn-research.com
Web: www.irn-research.com

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Topics: outsourcing · reducing overheads · smaller law firms

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