Legal Process Right-sourcing…

This is the second blog post in this six-part series presenting the Canberra paper…

More commonly known as Out-Sourcing, this is one of the most significant trends you should be aware of and getting some experience with.

Wages costs are the biggest single expense, and premises to accommodate team members are also a very significant factor.

To create flexibility for high work demand times, illness or other absences, and to reduce operating costs, Australian firms are increasingly looking outside their firms, including overseas, for suitable resources, often at significantly reduced cost.

Far too many firms I raise this issue with respond with a plethora of reasons why it won’t work for them, or why it’s just all too hard.

Your competitors are getting involved at accelerating rates, so if they can gain the various advantages, including reduction in costs, you will eventually, belatedly, have to look hard at it or suffer the consequences of the competitive disadvantage.

I have commented recently in a variety of forums that the debate has moved full circle now, from firms asking what could they consider trialling with out-sourcing to early adopter heavily-involved firms looking to identify areas they genuinely cannot…yet!

Potential areas might usefully be split into “Back Office” functions and “Knowledge” or “Legal” functions…

I do not intend herein to attempt complete lists for you...the situation is simply too fluid.

“Back Office”…

Event Management

Library and Research

Transcription/Word processing

Database Management

Data Entry

Payroll

Billing (all the Admin aspects)

Accounts Payable

IT Network

Website design

Website Maintenance

Financial Reports

Secretarial Support…as long as the proverbial piece of string!

Knowledge Management incl. Precedents

Power Point Presentation preparation

Activity Capture entry…I still see many firms where this is not done universally as direct entry by “authors”…many still complete Timesheets, and a few even then enter to the computer system themselves…very efficient indeed!

Call Centre including out of hours “switchboard”…

Client/Market Surveys

“Legal”…

Litigation Support…a very wide-ranging area!

Document Review

Contract drafting

Research and Analysis

There is a wide range of providers and they have their strengths and weaknesses. Choose an initial provider wisely after good research. It should not be assumed that you will use one for all your needs once you get beyond right-sourcing an initial area or two.

This applies also to location. The right provider for you in some legal functions may be in India, while the right provider for some back office functions may be in Australia, The Philippines, South Africa, New Zealand, or Ireland as examples only.

LPO is by no means just for “big” firms…on the contrary it provides small firms with options to help them compete on much closer to a level playing field.

IT has assisted LPO development…and to take full advantage you will need fast, secure, communication. We are discussing IT later in this session, but suffice to say here, as but one example, that cheap Apps purchased on-line for the majority of Mobile phones will turn them into a reasonable quality digital dictation tool, and allow you to immediately email work to your provider from wherever you are.

Savings range across a broad spectrum, with 30% being very common, and 50% being not at all uncommon.

Commonsense suggests start with the low hanging fruit where the results will give strong returns for the dislocation of the process changes. Further, looking carefully at what you do with a view to right-sourcing can reveal functions you do not actually need to do at all any more!

A small practical example provided by an attendee at a recent KMS seminar in Melbourne involved a need to urgently overnight convert two hard copy documents, amounting to some 120 pages, into a Word document.

Even if the firm had the internal resources to get it done overnight the cost would have been high. Scanning the documents to an offshore provider resulted in perfect documents turned around extremely quickly at the huge cost of less than AUD$20!

One strategy I suggest for small firms is to utilise a capable casual resource to identify areas where you should benefit most, do the research, establish the initial relationship, and get a trial going. This will increase the likelihood of you getting moving, with benefits flowing earlier and at relatively low cost.