Coronavirus has shown law firms that they don’t necessarily need their support staff to be sitting next door to their fee-earners. It has also put pressure on firms to reduce outgoings and improve their resilience - and outsourcing could help. Duncan Wood considers
Coronavirus (COVID-19) has undeniably wrought many changes on the legal profession. The majority of law firm staff are now comfortably working from home; offices have gone paperless virtually overnight; and even the most technophobic partner is now an expert in Zoom or Microsoft Teams.
As the pandemic has emphasised the need for agility and resiliency of service, so law firms have realised that they don’t necessarily need their support staff to be sitting next door to their fee-earners. At a time when firms are looking at how to rapidly reduce their outgoings with a rocky autumn ahead, one solution may lie in outsourcing some of their functions, both to bring down costs and to become more resilient in their business continuity – should a dreaded second lockdown be introduced.
Here are some tips to get started.
1. Don’t dive straight in
Before you start thinking about what you could outsource, consider outsourcing as part of your wider business strategy, says Andy Poole, legal sector partner at Armstrong Watson, the preferred provider of accountancy services for Law Society members. “Think about what sets your firm apart from others. How do you add value? What is the market going to look like in the future?”
Only then should you start on the operational side of things. Meet in your teams to discuss. Challenge each other. It should almost be a process-mapping exercise, says Poole, at the end of which you should have some idea of the services you could consider outsourcing.
David Gilmore, founder of DG Legal, agrees. “Before you start, ask as many people as you trust about which services to outsource, and to whom, because it is a key part of law firm strategy and efficiency in choosing what to outsource and to which people,” he advises.
2. You can’t outsource everything
Some roles and processes should be taken off the table right away, Gilmore warns. “I know of some law firms that have tried to outsource the role of compliance officer for legal practice, but the Solicitors Regulation Authority would not be impressed by this.”
Firms should also be very careful about outsourcing file reviews. “What these companies don’t realise is that if the law firm has a legal aid contract, they would be in serious breach of legal contract rules if they outsourced their file reviews.”
3. Remember it’s not just the back office
Historically, law firms have tended to outsource lower-level back office support functions like typing, digital dictation and telephony, but this is changing. Law firms are now outsourcing at director level for their IT, marketing and finance functions, explains Poole. “Firms with up to a £10m turnover (a vast majority of the legal sector) could really benefit from a director of finance and of IT, but they can’t afford to pay them full time. Outsourcing that function is a cost-effective solution. They gain far more strategic insight than they have ever had before.”
4. Embrace change and let go
Ceding control of processes is one of the major fears law firms have when mulling over outsourcing, says Poole, particularly legal services. “If you are completely new to outsourcing, dip your toe in the water and try a supplier out on their bookkeeping or marketing services first. That way, you can become more comfortable with the relationship and the quality of their work.”
Outsourcing brings benefits, but it also brings change. “If you don’t have the mindset of embracing change, then it just won’t work. You’ve almost got to let go of that a little bit,” advises Poole. “If you are set on doing things in a particular way, and reluctant to give up control, outsourcing is probably not for you.”
5. Find the right fit
For the firm / supplier relationship to work, it’s important to ensure that your culture and values align, so do your research and ask questions. Evaluate who they are and what they’re about. “You can then set a series of parameters in terms of what’s important to you as a business, your culture and values,” advises Poole. “That way, you’re clear about what you will and will not accept from the supplier.” This exercise is doubly important if you’re looking to outsource individual positions, such as director.
If you’re a small law firm or sole practitioner, you can discuss some of the issues raised by this article with our new small firms digital community, launching 19 October.
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