It’s sad, but true: There are only so many hours in a day. No matter how hard you and your team work, the list of must-get-done tasks necessary to run a successful law firm never gets shorter. You can, however, tackle that list faster, smarter, and more efficiently by scaling using legal process outsourcing.
Legal process outsourcing is a cost-saving measure whereby discrete legal services are transferred to outside companies, local lawyers, or paraprofessionals, instead of being completed internally. By thoughtfully outsourcing routine tasks that have to get done (though not necessarily by you), you can leverage strengths to save time, cut costs, and reduce your workload—so you can focus on what you do best for you, your firm, and your clients.
In this guide, we’ll explore what legal process outsourcing is, why more and more law firms are using it, and the industry’s trends for the future. We’ve also compiled a handy list of specific ways your firm might be able to leverage outsourcing to build a more efficient and profitable practice today.
What is legal process outsourcing?
For your firm to be its most profitable, you and everyone on your staff should spend your workday using your expertise and playing to your strengths. Unfortunately, the practice of law inherently requires plenty of tasks that shift focus away from what you do best—which is where legal process outsourcing comes in.
Legal process outsourcing is an increasingly popular method of lightening your firm’s workload by transferring tasks to other experts, freelance lawyers, or lower-cost practitioners.
The difference between outsourcing and offshoring
As a common point of confusion arises from the word “outsourcing”, it’s important to recognize the distinction between legal process outsourcing and offshoring.
While there are ways where offshoring can be helpful for businesses, there’s a difference between the two industries, particularly for law firms:
- Legal process outsourcing is using local lawyers and professionals to take on certain tasks like document review, scanning, and non-substantive court appearances.
- Offshoring is the process of employing cheap overseas labor to complete tasks remotely.
The rise of outsourcing
The legal industry is competitive, and more law firms are turning to legal process outsourcing to stay competitive and profitable. In fact, the global legal process outsourcing market was recently estimated to expand at a compound annual growth rate of 31.8% from 2019 to 2025, with the market projected to reach $35.9 billion by 2025. Here are some other indicators of the industry’s growth:
- $6.2 billion is spent annually with legal process outsourcing, e-discovery, and document review service providers, according to Thomson Reuters and the Georgetown Law Center for the Study of the Legal Profession.
- The same study on alternative legal service providers also found that $900 million is spent annually with contract lawyers, in-sourcing, and staffing services.
- 57.1% of law firms in the 2017 Altman Weil Survey said that they have begun using contract lawyers, 52.7% reported using part-time lawyers, and 6.6% generally reported outsourcing legal work.
Five benefits of outsourcing for law firms
At its core, legal process outsourcing is a convenient way to increase capacity, play to strengths, and increase your firm’s profitability. 69% of law firms in the 2017 Altman Weil Survey reported that shifting work to contract/temporary lawyers “resulted in significant improvement in firm performance.”
Legal process outsourcing can help your firm stay competitive by:
- Expanding your practice area expertise. Meet your clients’ needs by outsourcing skilled freelance lawyers who have subject matter legal expertise in other areas of the law, without hiring a full-time employee.
- Enabling flexible staffing for your cases. Freelance attorneys provide help when—and only when—you need it. You can find qualified legal help at any skill level for any project or case, so hiring freelance lawyers gives you the flexibility to manage a large case or a busy season. Bonus? Hiring a lawyer in a freelance capacity is a great way to try out the working relationship before committing to a full-time hire.
- Moving towards flat-fee billing. Outsourcing via LAWCLERK lets you engage talented lawyers to assist you with discrete projects or entire cases on a flat-fee basis. As a result, you can charge your clients a set fee or provide blended fee caps for legal work, which is more frequently being demanded by clients and gives you a market advantage.
- Lowering the cost of your legal services. Outsourcing is often more economical than hiring attorneys, because of the overhead costs employees add to your business. LAWCLERK, for example, doesn’t charge its users any sign-up or monthly fees just to be a part of the marketplace; you only pay the flat fee price you set when you hire a freelance lawyer through the site. These savings can be passed along to your clients.
- Finding work-life balance. Solos and firms are under more pressure than ever to work constantly to make a profit. Freelance lawyers bring in extra help when you need it, without the overhead of a full-time associate. Use the extra time to recharge with your friends, family, and hobbies.
What legal services can you outsource?
There’s a seemingly endless list of potential activities your firm could outsource, and new companies providing innovative ways to outsource are always coming online.
To determine the best outsourcing companies for you, follow these steps:
1. Evaluate your firm’s needs.
There are plenty of options when it comes to outsourcing, but not all of them will be useful to your firm. Ask yourself these questions:
- What tasks take up a lot of staff time—but don’t necessarily need to be completed in house?
- Do you need someone physically in your office?
- Do you need someone to go to court?
- Do you need someone to do project work remotely?
2. Explore outsourcing options that match your needs.
Once you’ve identified opportunities for improvement, assess the numerous legal service outsourcing companies available. And, if you’re concerned about costs, consider services that provide flat fees verses hourly rates.
Not sure where to start? Here are just a few specific areas where outsourcing help your firm be more efficient:
Court appearances: For appearance counsel and per diems
At a non-substantive court appearance, you may spend five minutes in front of the judge, an hour waiting for your matter to be called, and over an hour in travel time. While you spent hours working on the case, from your client’s perspective, you provided five minutes of value. This can lead to disputes over billing, and this time can consume a sizable chunk of a flat fee.
Instead, take advantage of the growing market of appearance counsel (or per diems) available to appear at hearings in your place for a flat fee or reduced rate. Appearance counsel can save valuable time that can be spent generating more work or billing at your full rate—so you can make a profit, and provide cost savings to your client.
Companies that offer this service:
- AppearMe offers a smartphone app that lets attorneys schedule another attorney to make a court appearance for them with very little lead time. This service has no ongoing commitments.
- CAP-Court Appearance Professionals allows attorneys to schedule another attorney to appear for them based on the practice area they need—including civil, criminal, collection, or bankruptcy hearings.
- Attorneys On Demand provides hearing coverage across the country. You submit the details of your appearance counsel needs, and then Attorneys On Demand assigns an attorney to make the appearance.
Case and written work: For access to a freelance lawyer pool
Traditional staffing companies are being replaced by companies that are providing flexible staffing through a remarkably talented, diverse, and experienced pool of freelance lawyers.
This means that whether you need a lawyer to work in your office to assist with a particular case, or a lawyer to work remotely on a discrete project, skilled freelance lawyers are just a click away.
Companies that offer this service:
- Hire An Esquire provides not only traditional attorney staffing and placement, but also access to contract attorneys who can work remotely or in your office at an hourly rate for any duration.
- LAWCLERK is focused on solo practitioners and small firms, and provides access to a vast network of freelance lawyers available to assist with research and written projects (memos, pleading, agreements, etc.) at the flat-fee price you set.
- Montage Legal provides access to vetted freelance lawyers from your jurisdiction, who are available to provide contract and project-based services at an hourly rate.
And, with the help of technology, it’s easier than ever to work with attorneys outside of your firm to get the job done. Attorney networks like Hire An Esquire or LAWCLERK integrate directly with Clio Manage, allowing lawyers to avoid duplicate data entry and keep track of what needs to be done. Key documents for cases can be securely shared via Clio’s secure client communication portal, Clio Connect.
E-discovery: For easier document review
Don’t waste your valuable resources scanning, coding, and completing document review. There are countless companies that provide inexpensive scanning and coding services.
Once documents are scanned and coded, there are also numerous companies that provide access to a vast pool of contract lawyers available to undertake document review for a fraction of what you would pay a full-time employee—some companies provide lawyers in your offices, and others provide lawyers that manage document review entirely electronically.
Even better, technological solutions such as Logikcull can help you complete the discovery process even more quickly and cost effectively.
For everything else
Work that can be clearly scoped and neatly packaged can often be outsourced to a contract attorney or other service provider. Here are a few more tasks that you may want to consider outsourcing:
- Summary of the cases cited in an opposing party’s brief
- Legal research and memos
- Discovery, including subpoenas, RFPs, RROGS, and RFAs
- Discovery responses and pleadings like motions to compel/quash/protective order
- Document review
- Deposition summaries
- Powers of attorney
- Legal articles
- Demand letters and other correspondence
- Corporate documents like operating agreements, by-laws, and corporate resolutions
What’s next for legal process outsourcing?
With more and more law firms using outsourcing to increase capacity and lower costs, legal process outsourcing is on the rise across the globe—especially when considering the emergence of virtual law firms and innovative new types of law firms that may be more likely to use the flexibility of outsourcing.
As the industry grows, here are a few legal process outsourcing trends worth watching:
Artificial intelligence and automation
Streamlining processes and creating more efficient workflows make a big difference to a law firm’s success—so outsourcing by way of software equipped with artificial intelligence (AI) or automation software is especially useful for lawyers looking to move away from manual tasks.
Check out Clio’s app directory for tools that can outsource manual work for your firm in areas like e-discovery, legal research, document management and more. Because these integrations are linked to Clio, they’re already set up to increase productivity and save you time.
As firms look at the most efficient ways to tackle routine tasks, some are experimenting with using a hybrid combination of legal process outsourcing and offshoring. By using both onshore and offshore outsourcing, firms can create round-the-clock efficiency—allowing a variety of tasks to be completed by different specialized workers in different time zones.
Rise in e-discovery
Recent amendments to the Federal Rules of Civil Procedure making Electronically Stored Information such as emails, e-calendars, and voicemails discoverable on handheld devices in litigation mean the market for e-discovery services is growing. With more need for e-discovery services, more firms may turn to the convenience and cost effectiveness of legal process outsourcing.
Create a more profitable law firm with outsourcing
If you’re looking for viable ways to differentiate your firm and increase your capacity without increasing firm overhead, legal process outsourcing may be the way to go.
With technological advancements making outsourcing simpler and more reliable, you can outsource more than you think—adding expertise and capacity to your practice while cutting down on costs and workload.
The bottom line? When you get more work done with the help of legal process outsourcing, you have more time to dedicate to your clients, and your profits.
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