Why not outsource all legal services?

Picture this:

A law firm without lawyers or support staff.

Apart from the regulatory issues which, at this stage, I have not investigated, I think it likely that over time we shall see legal providers who merely provide front of house services. In other words, none of the legal work will be done on the premises and you will (simply) select from a menu what it is that you require and it is made to happen.

You may have no interaction with a lawyer.

You are reassured that the end result is being supervised by a suitably qualified person.

The notion that you will deal with the same person from start to finish on the job will look archaic.

And the driver for all this?

As if I even need to posit the question:

Cost.

Of course, there are already instances where firms have outsourced support functions – IT, Business Development and Accounts – and, given the financial pressure on all firms, it is surprising we have not seen a bigger drift in that direction. Perhaps firms believe it better to keep things in-house on the basis of control or quality, but fundamentally it is a mindset issue.

Outsourcing of legal services already happens with local authorities and in-house counsel, but has not yet hit the private client market.

No doubt partners will consider that they and they alone are the best people to do the job, but that comes at a price. However, once the market opens up and clients start shopping around, they won’t care to the degree that you believe who does the work, so long as it meets their price point.

Most firms if they are smart will have worked out the right people for the job, but these firms are in the minority.

There will still be a whole slew of firms where they allow partners and senior fee earners to hoard work when they know full well that there are others more junior who could and should be doing the work. One of the main reasons for this is insecurity, and to a lesser extent trust.

When I think back to the work that I did, I cannot conceive of one single case where at least half, but probably more of the work done, could not have been outsourced:

  1. Initial fact finding meeting;
  2. A letter of advice;
  3. Counsel’s opinion on the merits and prospects of success;
  4. Issuing the claim (which was outsourced to a London agent for all cases issued in the High Court);
  5. Disclosure;
  6. Witness statements;
  7. Trial Preparation; and
  8. The Trial.

I am not belittling my role in the process, but if I had been able to outsource the work to a provider then I would have done so. I did delegate a lot of the work to more junior fee earners but looking back there is no reason why a third party could not have completed the exercise.

Right now I would be surprised if this issue was high priority for firms. They will only see the downside:

  • Paying off expensive partners;
  • Losing work in not being able to promote the personal brand of an acknowledged expert;
  • Chasing their tail with fees;
  • Dealing with the new regulatory burden.

And so on … and so on.

But, and there is always a big fat but …

Clients right across the board will continue to expect the same service as you currently provide for the same or more likely a lower price. You have addressed this by trimming your overheads and probably the only place left will be the partnership expense. No one wants to earn less than last year but unless you can create new demand or charge a premium, that is where you will be forced to venture.

Big law will already have formed allegiances with little law and that is a start but what of little law?

Where do they go?

Perhaps they need to appoint a Chief Profitability Officer to undertake a root and branch review of the profit/unprofit centres and then consider how they might turn around the unprofitable parts by the process of outsourcing. More likely I suspect their recommendation will be to close shop.

In summary, if change is inevitable then start thinking at the edges of the box at the very least. And drop the reactive mode mindset. You don’t need to wait for things to happen before you change your business, any more than you need to wait for a complaint or two to work out that you have a service issue.

Summary

Are you acting in the client’s best interest by continuing to allow the wrong people to do the work?

Could you outsource any of your legal work?

How do you improve profitability where the costs are fixed?

Change is inevitable but don’t wait for it – you need to drive the agenda.

~ Julian Summerhayes ~

2 responses to “Why not outsource all legal services?”

  1. Thanks Duncan. It is disappointing that more firms do not see the need to outsource. In time the new entrants to the market will not rely upon a cohort of employees, and this will drive the agenda. Legal Practice appears very slow to adopt a change mindset, and proceeds on reactive mode constantly. I would like to see a situation where the client is given the ‘option’ of not instructing a partner and to understand what that means. In my experience there are very few ‘jobs’ that require the involvement of partners as a matter of course.

    Julian

  2. Thanks Duncan. It is disappointing that more firms do not see the need to outsource. In time the new entrants to the market will not rely upon a cohort of employees, and this will drive the agenda. Legal Practice appears very slow to adopt a change mindset, and proceeds on reactive mode constantly. I would like to see a situation where the client is given the ‘option’ of not instructing a partner and to understand what that means. In my experience there are very few ‘jobs’ that require the involvement of partners as a matter of course.

    Julian

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