Outsourcing of non-legal services – smaller law firms are beginning to see real benefits and savings

on 12 July, 2010 Email this Email this - Print this Print this

CoreLegal founder member David Mort, Director at IRN Research (a market research consultancy specialising in advising the legal services sector) reports on the findings  of a survey on outsourcing among smaller law firms

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.

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

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.

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

Both these examples are from large law firms but where does outsourcing fit in for the smaller firm?

A recent survey by IRN Research of 36 law firms with 10 partners or less came up with the following general conclusions:

  • 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 law firm that has outsourced virtually all of its non-legal activities is Woolley & Co. As Andrew Woolley says “ 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 they can so concentrating on what they do best and leaving the rest to the experts”.

And just as the big law firms start to embrace shared services, like the information services example above, is it time for smaller law firms to also consider this option? A recent discussion started by Andrew on the Linkedin Law Society group is exploring the idea of smaller law firms coming together to share such things as accounts support, IT support, buying equipment, software, online information services etc.  Andrew adds “ I think we’d get savings or improvements but probably both”.

http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=2078586&discussionID=22347914&sik=1276610348418&trk=ug_qa_q&goback=%2Ehom%2Eana_2078586_1276610348418_3_1


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