Law firms, like any other business, are increasingly looking for ways to stay competitive and maximize their profits. Back office outsourcing has become a more popular way for law firms to increase efficiency and streamline their operations.
In fact the global legal process outsourcing market is expected to expand at a compound annual growth rate of 31.8% in the next three years. There is a huge opportunity, as firms currently spend $6.2 billion each year, and the market is projected to reach $35.9 billion by 2025.
Law firms are already outsourcing at least some aspects of their operations; 48% of law firms use contract lawyers, 57% report using part-time lawyers, and 24.1% report outsourcing non-lawyer functions. In addition, the International Legal Technology Association’s 2019 technology survey reported that 39% of the law firm respondents outsourced infrastructure support – up from 28% the year before – and security outsourcing grew to 32%, up from 22%.
In total, about 70% of law firm leaders reported outsourcing some or all of their back-office and/or administrative functions, up from 56% in 2018 – a 14% increase year over year.
From recent studies and surveys, the reason for outsourcing is clear: At least 60% of survey respondents cited cost savings as the top key benefit of outsourcing, a 21% jump from last year. Outsourcing can save law firms millions of dollars in the long run, and law firms who outsource their back office operations have been proven to significantly cut costs and elevate service delivery. Since firms often spend between $15,000 and $25,000 per firm user per year, the opportunity for savings is significant.
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