September 18, 2018

To outsource or not to outsource that is the question - Jonathan Silverman talks news

Outsourcing is becoming a growing area in legal service delivery. Jonathan Silverman, Jt Managing Director, discusses the opportunities available through outsourcing but also what to consider when investing in outside help.

Whenever the topic of outsourcing is mentioned to lawyers they usually dive for cover. As a profession we are understandably risk adverse; the very thought of relying upon someone not on our payroll or under our direct supervision creates an immediate scepticism if not outright panic. However in a mature service-led market where the world is flat and opportunities to utilise talented people regardless of location abound, firms determined to succeed in a challenging and fast changing environment should not close their minds to the opportunities outsourcing offers.

Let’s first deal with the negatives. What issues should a firm satisfy themselves about before utilising outsourcing in one form or the other?

Undoubtedly, confidentiality is paramount to the proposition; any law firm’s data is by its very nature going to be sensitive in one way or another, so identifying trusted providers is absolutely essential. Exceptional due diligence must be undertaken. Be absolutely clear on what services you wish to outsource; search for a suitable vendor maybe by using an independent, specialist broker to do the legwork for you. Don’t be shy to ask around your network to enquire if they know of the outsourcers you are considering and if that’s not possible, ensure any prospective supplier gives you six references, or details of any user group, so that you can pick a couple of names from that list – ideally either people who you know or who you can check out for their objectivity.

Ask how long they’ve worked with a particular supplier, how the inevitable challenges that arise were dealt with and resolved.

Alike to asking your own staff to handle a new project, be realistic as to what can be delivered, whether it be in building a website, putting together a marketing plan or providing back office facilities; clarity of thought is crucial.

Look carefully at what’s on offer and how it fits in with your requirements. Equally look for potential hidden costs which might arise during the life of the project. Remember, when using third party suppliers in a cost driven environment, headline quotations do not always tell the whole story – examine and scope carefully what is being offered to you. Whilst an employee might occasionally stay late to complete a task without additional pay, a third-party provider rarely will go ‘out of scope’ without additional remuneration. The risk of hidden costs means that any contract with a third party provider needs to be properly drawn – ironically as cobbler’s children are usually the worst child, take care in finalising the terms of any retainer

Do not assume that the loyalty shared with your staff which sees them remain focused and committed in delivering a project for the benefit of the firm will be reciprocated by a consultant or outsourcer. However professional, you will be but one of their clients, so again, careful selection is essential.

Thought needs to be given as to what activities you are comfortable outsourcing for your business; web design may be one, but outsourcing accounts processing or IT support may be going too far for many; fearing that this could be a process too central to the business for it to be outsourced – although of course many do just that very successfully.

But turning now to the opportunities which outsourcing in its modern form creates for a law firm. Just as lawyers have become used to retaining locums and temps to carry out legal and support roles, in today’s digital economy they should give serious consideration to outsourcing other functions as this may well enable a firm to quickly address a challenge without incurring recruitment fees, going through a training process or dealing with the inevitable HR issue. Selecting an outsourcer who demonstrates both expertise and relevant experience should enable a firm to leverage on those skills to a greater extent than simply taking on an additional member or members of staff.

Moreover it may well enable a practice to focus on its core activities, i.e. providing legal services to clients, without management time being side-tracked into dealing with peripheral issues such as processing data or implementing an already determined marketing campaign. Furthermore, working with an external partner also brings the benefit of containing operational and recruitment costs and offers a practice the ability to ‘bulk up’ or ‘slim down’ without the pain of HR issues.

However the key to successful outsourcing has to be the way in which it is implemented.

Whilst carefully analysing one’s business requirement and clarifying the service you are asking for support with are crucial pre-requisites, of equal importance is the working relationship between your firm and this essential partner. Rigorously select an outsourcer in whom you are comfortable to place your trust and with who you consider you could work through a problem. Chemistry is crucial.

Insist on a detailed written proposal with an unambiguous quotation based on your discussions, ensuring that the terms and conditions are set out clearly. Steer clear of vague performance promises instead precisely define the services being provided for the agreed pre-set price and identify how you will deal with any overtime or overrun.

Your objective must always remain clear

  • You have a business need, which you wish to address by utilising the services of a third party who must first have demonstrated their reliability
  • Someone who can demonstrate an ability to offer consistent quality of service
  • Someone who has ‘done it before’ successfully for others and genuinely has the relevant expertise.
  • They must adopt a partnership mindset which reflects your practice’s operating values
  • It is imperative you can trust their team and they can effectively communicate with you and your colleagues
  • You must be satisfied the service will offer value for money

Choose well and you’ll enjoy level of skills and knowledge for more effectively than recruiting; it will enable business to develop faster and more profitably.

Jonathan Silverman is Jt Managing Director of Silverman Advisory.