The Inside Scoop on Law Firm Outsourcing

Karen Asner

Although law firms have traditionally outsourced services like security, travel or mail, the allure of Thomas Friedman's "flat" world has some law firms looking hard at whether to outsource other functions.[FOOTNOTE 1] The options are no longer limited to an outside vendor running a service in-house. Instead, firms face an impressive array of options offered around the globe, from Chennai, India, to Wheeling, W.Va. Navigating these decisions requires thoughtful consideration of your business goals and careful planning.

LET YOUR BUSINESS GOALS GUIDE THE STRATEGY

Review of outsourcing options is most often triggered by the desire for cost reduction. Although the lure of potential cost savings and operational efficiency is a powerful siren, outsourcing can offer numerous other benefits that further important business goals:

· Outsourcing can enhance service to clients and lawyers through greater operational coverage and better product area expertise.

· Outsourcing can free up management to focus on other strategic areas for the firm.

· Third-party vendors are more focused on a particular product or service and are more likely to stay abreast of the technological changes and other industry innovations that will further improve service and lower costs.

When White & Case expanded its outsourcing arrangements to include its word processing, creative design and publishing functions, the critical factor aside from cost-efficiencies was the significant potential for improving client and lawyer service. By moving these functions to an outside global vendor, the firm eliminated duplication of staff and equipment, consolidated and cross-trained staff, improved cost efficiencies and set a better firmwide support platform to leverage its global capabilities and 24/7 service. Smaller offices are now able to access improved service on a 24/7 platform that notably upgrades their ability to serve both lawyers and clients.

Similarly, White & Case's objective behind outsourcing a truly professional concierge and conference management service, commensurate with its newly upgraded New York conference center, was to create an environment that supports the firm's client service ethic. Its clients now experience a seamless welcoming reception service, upgraded audiovisual support and streamlined conference booking.

HOW TO EVALUATE THE ARRAY OF OPTIONS

Although cost savings are often touted as the most obvious and achievable benefit of outsourcing, prepare an apples-to-apples comparison of the costs and benefits of keeping a function in-house, or insourcing (keeping it in-house but moving to a lower cost location), versus outsourcing.

Carefully research a vendor's history, capabilities and competitors and definitely follow up with their references. Speak to your peers at other law firms to see what works and doesn't and get additional referrals. Friends outside of the legal profession can share a wealth of information from their experience, since corporations have been outsourcing functions for longer.

Depending on the function, it may be essential to use vendors with law firm experience because they will be familiar with handling confidential information and complying with particular ethical rules.

MANAGE YOUR OUTSOURCING STRATEGY AND PROCESS

Once the vendor has been selected, a detailed roll-out plan must be created. Thoroughly evaluate the work product during the transition phase -- including setting up a "shadow" team that performs the same tasks for comparison. Consider having an on-site project manager from your vendor who will be available for daily communications and who will understand your business.

It must be acknowledged that outsourcing decisions always make staff anxious -- and understandably so. It's crucial, therefore, that staff who are affected by the decision, whether they are moving or staying, be communicated with frankly and supportively. Once the dialogue gets past the anxiety stage, people are eager to look forward to the future and the new opportunities that may unfold.

Once the transition is handled, many fail to achieve the potential benefits because they fail to properly manage and monitor their vendors. Craft an agreement that explicitly documents service requirements and specifies the processes and deliverables up front. It is critical to watch increasing costs over time, as any cost savings that you initially achieved can be quickly eroded.

Also, make sure your contract includes a clear exit strategy, with well-thought-through provisions on how information will be accessed and data gets returned.

Outsourcing arrangements are multifaceted processes that require attention to business goals, human resource issues, technology and overall project management. Whether you decide to venture across the globe or keep things across the street, consider all of these issues and regularly revisit your goals to ensure the arrangement is meeting your ever-changing needs.

Karen Asner is a commercial litigator and an administrative partner at White & Case in New York, where she oversees all administrative aspects of the firm's 36 offices and helps shape firm culture, policies and strategic business objectives.

Law.com's ongoing IN FOCUS article series highlights opinion and analysis from our site's contributors and writers across the ALM network of publications.

::::FOOTNOTES::::

FN1 Thomas L. Friedman, "The World Is Flat" (New York: Farrar, Straus and Giroux, 2006).