Driving Value: Is Outsourcing Legal Administrative Services the Right Choice for Your Law Firm?
Law firms today are run more like corporations than partnerships. They are all looking to improve operations and position the firm more competitively for the future. To achieve this, law firms are turning to outsourcing some administrative functions.
Law firms are now identifying—besides the traditional areas such as copy, imaging, and mail— the opportunity to save 1-2 percent of firm revenue and increase service levels by outsourcing broader back-office functions, including records management, administrative support and word processing, and on-site litigation production support.
An increasing number of law firms recognize the benefits of project-based consulting in addition to completely outsourced solutions or a combination of both as a potent path to achieve results.
Below are three potential cost-saving solutions that law firms should consider:
Option 1: Outsource
While there may be an initial investment in outsourcing, law firms are seeing the benefits of transitioning the management and compensation of firm employees to a third-party provider, establishing a long-term, accountable process through concrete service level agreements (SLAs) that deliver data on results—all of which spur ongoing improvement from the right provider.
For example, outsourcing records management (RM) has become an area that provides a tangible opportunity for capturing both efficiencies and cost savings. A reliable partner can develop, execute and manage a strategic roadmap to help firms mitigate risk and ensure compliance. Outsourcing can also help firms leverage advances in technology to transition to a reduced paper and electronic records environment, minimizing records storage costs in the long term. Some firms have achieved up to 30 percent savings through combinations of labor, efficiency improvements, and storage reduction.
Option 2: Consider the consultant
Cost savings and staff efficiencies are, without a doubt, extremely important. However, cost savings are sometimes not enough.
As an alternative to outsourcing, many law firms engage consultancy services. Consultancies can deliver the necessary expertise that a law firm may lack internally to quickly and effectively tackle urgent demands for change. Consultancies have arisen to solve crucial short-term issues, providing expertise where and when it is needed, a fresh perspective, and a big picture point-of-view that comes from depth and breadth of industry-wide experience.
In instances where the firm has the resources and infrastructure in place, but needs external expertise to assess the current operation and make recommendations for improvement, the expertise of a consultant is valuable. Also, some firms engage a consulting service to smoothly execute a pilot program that, if successful, can then progress to more comprehensive change. In environments where the firm culture cannot accept outsourcing their employees, project-based consulting can help firms address urgent challenges quickly and produce a solid foundation for continued improvement overtime.
Option 3: Best of both worlds
In a buyer-empowered legal sector, working with either the consulting or outsourcing arm of a service provider can reap substantive advantages for law firms in today’s legal marketplace. Ideally, a potential provider should deliver both, so their service is comprehensive and scalable and the vendor can transition from purely making recommendations to execution.
Complacency is not acceptable in this market. Simultaneously, providers are in the unique position to bring innovation, expertise and insight that can deliver efficiency and operational excellence whether a firm chooses to use them as a consultant or as a comprehensive outsourcing provider.
Any option can significantly lower spend and give your law firm the competitive edge it needs to be a marketplace leader.
Samantha Green is the manager of thought leadership for Epiq, and an expert on all aspects of electronic discovery, data privacy, and cybersecurity, drawing on her more than 15 years of litigation and consulting experience. As a litigator, Green has taken a number of cases from pre-discovery through trial, and has handled a broad spectrum of cases, from government investigations (including FCPA and antitrust matters) to HSR second requests and commercial litigation matters.