This brief guide will attempt to answer some important questions you may have. Why should I outsource? Is it sustainable? What this guide will not do is make your decisions. The goal of this guide is to lay out some important issues so that you can make informed decisions for your firm.
You’ve decided that you’re ready to outsource certain functions of your firm but you’re not sure about how to go about it or where to start. Before you dive in headfirst, here are some important things that you’ll want to consider, whether you are looking at basic office tasks or legal process outsourcing.
Offshoring is the practice of outsourcing certain functions to another country for lower labor costs. Certain functions lend themselves to offshoring better than others. Bookkeeping, customer service, and transcription services are all things that can be outsourced relatively easily since they require a lesser amount of communication with the contracting business. If you are confident that some of your back-office services can be effectively outsourced with little to no supervision, then these functions might be okay for offshoring.
The services that require more day-to-day communication might be better to keep local or domestic. While many functions can be completed remotely, some require a physical presence. A large part of the response to COVID-19 has been to move meetings to a virtual setting over Zoom, and court hearings are not untouched by the impact of the last 18 months. But while some judges are talking about virtual hearings becoming a part of the ‘new normal,’ physical appearances are not going anywhere just yet. For now, court appearances will require you or someone in your stead to appear in court.
Here is a good rule to help you determine whether you should offshore or find a local LPO service: The greater degree to which a function is removed from your core, mission-oriented functions, the easier it will be to offshore or outsource.
Do you want to pay someone a lump sum for one or more services? Or does the service provider have the manpower, resources, or competence to complete the task on time? With your knowledge of your firm, you might wrongly assume that the function you outsource can be completed with the same level of ease and familiarity by a third party. This is not always the case.
If you make this incorrect assumption, it can end up with you wide-eyed gawking at an invoice billing you two to three times the amount you anticipated. Bookkeeping, transcription, and document drafting might be more straightforward. But certain LPOs such as legal research or case evaluations might be better kept either in-house or outsourced locally. It’s important to develop an open and honest relationship with a potential service provider. Unless they are specialists in the niche task that you’re intending to dish off, you are running the potential risk of running up your bill. In this case, paying a flat rate can be safer.
There is hardly a major corporation on the planet that does not outsource its back-office business operations to one extent or another. This includes law firms. Given that most BPO functions such as customer service and bookkeeping aren’t necessarily industry-specific, they are outsourced much easier than legal processes.
Outsourcing is profitable for you and your firm. By delegating tasks to professionals trained in specific back-office functions, you can stop wearing so many hats. You will be able to perform the functions that make you money. Businesses who outsource their back-office management usually save anywhere between 40% to 60% in operational costs, though some boast as much as 70%!
Outsourcing is also profitable for your client. You can bring more focused service to them and at the same time worry them less with exorbitant rates and fees to keep your back office running.
Strategic outsourcing is not a matter of simply saving money. This type of outsourcing is usually done out of necessity. A third party might have access to a team that you need so your business can function. This sets it apart from outsourcing strictly to save time and money.
Many lawyers who are more traditionally minded in entrepreneurship might consider strategic outsourcing from the get-go. But these days, building your firm from the ground up does not necessarily mean that your whole team is on employee payroll. Outsourcing can work at any point in the journey.
Global Market Insights Inc. has projected that the total market value of LPO will be over $30 billion in 2027. BPO in general will be at a projected value of $230.3 billion in 2027. The demand is quite high and will keep growing with more possibilities of remote work available, especially since COVID-19 and the events of 2020 have set a precedent that opens up new horizons.
No matter the stage of growth in which you find your firm, we at Back Office Legal can come alongside you to help maximize your efficiency, save you time and money, and improve customer relations. In addition to helping with your general back-office management, we also offer customized law firm coaching and resources. When you team up with Back Office Legal you have access to:
Send us a message or call (206) 455-9309 for your free consultation today!