The growing pressure on law firms and corporate in-house counsel to reduce expenditure each year, especially in regards to litigation related expense, has made outsourcing an increasingly attractive option. Greater efficiency, access to skilled resources and cost reduction or containment are the most frequently cited reasons for creating business processes that integrate outsourcing.
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With the growth of globalization, legal outsourcing is becoming more creative and ever more innovative each year in regards to delivery options. The rapidly changing technology environment, and constantly evolving data privacy landscape, has necessitated the outsourcing industry to develop more customized solutions for its clients’ evolving global practices. In order to remain cost effective and process efficient, outsourcing firms are now tasked with being global and technological consultants like never before. New delivery methodology demands innovation and agility - creativity has never been as necessary as it is in today’s fast-paced legal world. In addition to new workflow models, new approaches for delivery are also required. Outsourcing options onshore in the US and UK, near shore in the US and UK and offshore in India and the Philippines have seen varying levels of acceptance over the last decade.
Probably the most impactful outcome of outsourcing work streams or tasks is to cut costs. Cost can often be cut by more than 50 percent when task complexity is aligned with skill-level of resources. Internally at most companies or firms we see high level resources conducting low-value work, usually because tasks are either assigned incorrectly or there simply are not enough internal resources to pair up available skill with value.
This misalignment of task can cause inefficiency, increase in cost and employee disengagement. Law firms and corporate counsel offices with senior attorneys doing low-value work often over-tax the employees and distract team members from core tasks where their level of skill would be better applied.
Outsourcing allows legal departments to evaluate their routine tasks and create labor arbitrage workflows that direct high-level resources to highvalue work and outsource the remaining low-value, repeatable tasks to lower-cost, higher capacity resources external to the firm or corporation.
Onshore
In addition to cost savings, the burden of recruitment and ongoing management of employees are also removed when employing outsourcing workflows. The transfer of work to an outsourcing firm within the same region has always been popular for back-office related functions like HR or IT because of data privacy and jurisdictional data regulations. The same can be said for the legal industry. Legal departments have outsourced HR, IT and repetitive and repeatable tasks like document review and due diligence projects to more cost-effective outsourcing firms for years. Outsourcing onshore typically means the functions or tasks stay in the same time zone (or within an hour or two) and allows for easy travel or onsite meetings when necessary. The onshore option also allows for a cost benefit over keeping the tasks/function in house, but does not yield as much perceived risk as offshoring in India, China or the Philippines. Onshoring has usually been confined to similar high-cost of living areas as the businesses or firms themselves (New York, London, Los Angeles, etc.), but innovation, efficiency and volume of work allows outsourcing providers to offer better costs for the same services.
Near Shore
Law firms and corporate counsel interested in high-cost reduction through outsourcing who see perceived risks associated with offshore projects have another option in near shore delivery. While offshore centers are highly regulated, and secure (and have proven their efficiency and risk containment), many outsourcing firms have set up delivery centers in non-expensive metro areas in the US and UK for clients who are unable to go offshore for a myriad of reasons. Growth in areas like Belfast, Glasgow and Leeds in the UK and Cincinnati, Detroit and Austin in the US now means even greater savings onshore are available than ever previously offered. Clients are able to outsource the low-value tasks without dealing with any of their internal offshore obstacles.
Dual Shore
The most innovative models for outsourcing now involve dual shore workflows. Technology coupled with newer, more efficient and lean models can carve out the low-value tasks and then bifurcate them into onshore and offshore activities, further reducing cost over traditional onshore models and mitigating any perceived risk involved in traditional offshore models. The best example of this is Prioritized Review where predictive analytics are used to identify likely sensitive and likely non sensitive information and sensitive information can be kept near shore for added security. Additionally, follow the sun approaches allow for decreases in timelines and adherence to quick deadlines. These approaches can now help clients meet their financial and deadline goals while not overly concerning their legal and compliance departments with risk management issues.
Employing lean process, in an offshore, onshore, near shore or dual shore delivery approach has proven to be a practical and even innovative solution for reducing costs and meeting tight timelines. The various delivery models outsourcing firms offer today are scalable, agile and highly effective in reducing costs and overhead. When choosing from a catalogue of outsourcing options, consider your comfort levels with onshore, near shore and offshore and keep an open mind regarding innovative workflow models that employ true labor arbitrage through dualshore delivery. Legal outsourcing has become one of the best global delivery options in our increasingly global legal and corporate landscapes.
