Career Talk

November 2007 Issue

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The ABCs of Outsourcing Legal Work

by Charles Volkert, Esq.

Charles A. Volkert is executive director of Robert Half Legal®, a legal staffing service specializing in the placement of attorneys, paralegals, legal administrators and other legal professionals with law firms and corporate legal departments. Based in Menlo Park, Calif., Robert Half Legal has offices in major cities throughout the United States and Canada.

Once a technique used primarily by high-tech and communications companies, outsourcing—and its global variation, offshoring—has become a standard operating procedure for many businesses. Among law firms, outsourcing has become an operational strategy that enables them to deliver legal services at competitive prices. Firms may outsource commodity work, such as document editing or printing, or tasks involving more complex legal skills and knowledge, such as contract review and intellectual property or litigation research.

Outsourcing is a compelling option because it dramatically reduces costs, particularly in instances where the tab for a high volume of work (for example, the review of hundreds of thousands of documents by dozens of paralegals) would be exorbitant.

Although many law firms in the country have embraced outsourcing, many others remain wary, despite the allure of cost savings. This is understandable because it is certainly not a one-size-fits-all solution. Even firms that outsource certain functions are selective about which tasks to send offsite or overseas. As a legal administrator, your job is to understand the ABCs of outsourcing and work with the firm’s managing partners to evaluate the advantages and drawbacks for your firm.

• Consider the Source

It’s important to conduct thorough “due diligence” in order to find the right provider. When choosing between a domestic versus overseas vendor, for example, don’t base the decision solely on hourly rate. The set-up fees, infrastructure-related expenses and costs of monitoring a foreign company sometimes make the overall price considerably higher than that of a U.S. legal services firm.

Problems often arise with outside vendors because the outsourcing or offshoring contract is too restrictive. Research we conducted for Future Law Office: Managing a Global Workforce, Robert Half Legal’s annual white paper, found that law firms often make the mistake of adopting a standard agreement rather than modifying it to fit the specific project. While it’s the responsibility of the firm’s managing partners to address such legal details, as the administrator it’s important for you to be aware of such potential pitfalls when evaluating or recommending vendors.

It’s also critical to explore the issues of confidentiality, privacy and security. Never assume that all legal vendors will maintain the necessary degree of discretion when handling client information. There have been enough stories of stolen laptops containing confidential data for us to know better. That’s why you must stipulate that the vendor share data with your firm only via secure computer networks and IT systems. Domestic and overseas vendors should also sign appropriate confidentiality agreements.

These are necessary precautions, but enforcement of such security standards is, sadly, another matter. When evaluating a potential vendor, therefore, you must factor in the time you and other staff members will spend on relationship management. Quality control is another administrative issue. If a legal service firm has high turnover, for example, it will be difficult to ensure consistency and efficiency. As with any vendor, domestic or foreign, the rule of thumb is: You get what you pay for when choosing to outsource.

• Alternatives to Outsourcing

While outsourcing can work for some firms in some instances, your law office’s unique needs and circumstances will ultimately determine whether it’s a viable option. Depending on your firm’s immediate caseload and long-term strategic objectives, you may be better off using other staffing options.

One effective and economical approach is to hire legal professionals on a project basis. With this approach, you enjoy the benefits of outsourcing—access to supplemental personnel on an as-needed basis—without the operational challenges and risks of dealing with a vendor thousands of miles away.

Legal project professionals can be retained to assist with, e-discovery and other document-intensive projects, litigation assessment or specialized casework that can't be expeditiously handled by full-time staff. Hiring contract professionals on a just-in-time basis enables firms to take on larger and more complex cases, add practice areas, save costs for corporate clients and meet tight deadlines without overloading staff. This in turn will enhance your office’s flexibility and responsiveness—and competitive advantage.

Because some cases might involve hundreds of legal professionals working in more than one location, it will take precise coordination and clear communication to ensure that projects are completed successfully. If you are the point-person managing a team of project paralegals and other administrative staff, you will want to develop procedures for speedy communication, document and file sharing and the resolution of problems. Regular team meetings—either in person or virtual—will be essential to discuss deadlines, schedule changes and new developments.

Outsourcing can be a useful strategy for your firm, depending on the scope and specifics of a given case or matter. But if your office needs cutting-edge expertise, experience with international litigation or familiarity with foreign regulations, it may be more advantageous to bring such talent in-house on a project basis. This will enable you to maximize productivity and manage costs while maintaining the high quality standards clients have come to expect.

For more information, consult Future Law Office: Managing a Global Workforce, available at www.futurelawoffice.com. The white paper examines how law firms and legal departments have addressed the issues of outsourcing and offshoring.

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