Legal Outsourcing, also known as Legal Process Outsourcing (LPO), refers to the practice of a law firm or corporate legal department that receives legal support services from an external law firm. LPO is currently the fastest growing business in the world. The legal processing consists of transferring the work of attorneys, paralegals and other law professionals to external vendors. Many factors drive the legal firms to outsource their work to others, including cost-effectiveness, turnaround time, and increased flexibility, among others. When the LPO provider is located in the same country, the practice of outsourcing involves agency work and other services requiring a physical presence, such as court appearances.
One of the advantages of outsourcing legal work to external vendors is organizations can get access to high-level talent and niche expertise that does not exist within the firm. This can particularly be useful for small boutique firms to close gaps in internal competencies. Outsourcing legal practices also enable firms to quickly scale up for a case or project, leveling the playing field with larger firms. The concept of legal outsourcing is based on the division of labor principle, prevailing in law firms, where a variety of time-consuming and arduous processes like due diligence are entrusted to paralegals, document reviewers, or interns.
While there are a majority of factors driving the legal process outsourcing, there is also a need for law firms to consider some significant do’s and don’ts of legal outsourcing.
Outsource Specific Talent and Tools
Law firms must look for skills or expertise they don’t often need. They must outsource tools and technologies that don’t need to own. They must focus on special culture, geographic or industry expertise. Many legal firms outsource a growing number of high-value departments, often shedding administrative and operations employees in the process. However, this can pose some risk, but also big rewards. According to Chris Petrini-Poli, executive chairman of HBR Consulting, HBR’s managed services division has been hired by 17 Am Law 50 firms, including Sullivan & Cromwell, and about 25 percent of the Am Law 100. In 2019 alone, seven new law firms hired HBR to outsource various functions, he said.
While outsourcing legal processes, a firm needs to communicate well with a freelance lawyer. As legal outsourcing being done remotely, clear and effective communication is vital in running a successful law practice. It is significant to ask what is the most effective way to share information when sharing information with LPO providers. Effective communication also clears misclassifications and misunderstanding while outsourcing legal processes. Online communications and support services like Google Docs, Skype, and others make it easy and inexpensive to find and manage remote talent.
Think Outsourcing as a Leaner Way to Grow
Outsourcing can expand the talent pool of a law firm and can provide access to distinct skillsets at a rationale cost. As the outsourced resources can perform a firm’s tasks, professionals must treat them as an extension of their main office. They also must think of them as partners and work hand in glove with them to ensure that their goals are aligned with the firm. Outsourcing also gives a higher degree of flexibility to the business as it is easier to withdraw or scale down outsourcing resources and only procure in a need of time.
Thinking Outsourcing as a Quick Solution
Legal process outsourcing often takes time to perform, so firms do not thing it as a quick fix for their legal practices. Instead of thinking it as a short-term strategy, outsourcing should actually be incorporated as a long-term strategy for any business. In order to accomplish a robust, realistic outsourcing strategy, an organization must be able to assess every aspect of its business. The rapidly expanding market in outsourced services offers myriad cost-cutting options to law firms, but it is not a quick fix.
Outsourcing Core Staff
Outsourcing a core function may give a firm a short-term uplift. But as the firm wants to build a sustainable competitive advantage, they simply can’t outsource their core functions to another. Because core employees generally drive and direct the organization’s projects and processes, they are the cultural center of the firm. Moreover, outsourcing core functionality can be wise when organizations have a very specific need and the outsourced people have the expertise to solve the problem and offers greater capacity to execute.
Considering to Win Every Point
Outsourcing can be an effective way to deliver efficiency, but not every contract can be entirely win-win on every single point. Also, do not hire someone who views a company as a side project. Often, freelancers can see outsourcing work as just another paycheck or a project. They don’t really care about a company’s outsourced work nor do they have the potential for a long-term relationship. This can also lead to a major disappointment for a contract.