LawSourcing Blog

A recent article in the Chicago Daily Herald discusses the continuing trend of U.S. firms outsourcing legal services. The author notes that this trend is continuing to grow, with law firms and inhouse lawyers using legal outsourcing companies for conducting legal research, performing document reviews, writing due diligence reports of mergers and acquisitions, performing administrative work, and drafting legal documents. Caren Mansfield, President of the Illinois Paralegal Association, recognizes that the outsourcing of legal services is “here to stay”; however, she would like to see U.S. lawyers outsource this type of work to U.S. resources. Regardless, she sees a “bright and promising future for those associated with legal process outsourcing services.”

Legal Research Growing Globally [Daily Herald]

The outsourcing of legal services has been gaining a lot of attention lately. Ellen Tanowitz wrote an interesting article this month in the New Lawyer, an online newsletter for the ABA General Practice, Solo & Small Firm Division.

In the article, titled “Using an Independent Contractor in Your Legal Practice”, Ms. Tanowitz explains how solo and small firm lawyers can use independent contactor lawyers on a project-by-project basis when things get busy (rather than hire a full-time associate). Ms. Tanowitz, in fact, not only uses other lawyers to outsource some of her work when things get busy, but she also serves as an independent contractor for other lawyers in the Boston area when times are slow.

But why should Ms. Tanowitz be limited to working with lawyers in the Boston area? She’s not anymore. Thanks to the Internet, now lawyers can (1) outsource some of their workload to other lawyers anywhere in the world in an auction format, and (2) find additional work being outsourced by other lawyers when times are slow.

We think this can change the way some lawyers practice law. But we’d like to hear what you think.

Using an Independent Contractor in Your Legal Practice [via the New Lawyer]

The New York City Bar recently issued an ethics opinion clarifying how bar members may use the services of offshore legal service providers. In a nutshell, New York City Bar lawyers may offshore legal services provided they meet five requirements:

A New York lawyer may ethically outsource legal support services overseas to a non-lawyer, if the New York lawyer (a) rigorously supervises the non-lawyer, so as to avoid aiding the non-lawyer in the unauthorized practice of law and to ensure that the non-lawyer’s work contributes to the lawyer’s competent representation of the client; (b) preserves the client’s confidences and secrets when outsourcing; (c) avoids conflicts of interest when outsourcing; (d) bills for outsourcing appropriately; and (e) when necessary, obtains advance client consent to outsourcing.

Adam Ketcher of Cyrus D. Mehta & Associates has a nice article summarizing the opinion and describing what it means for New York lawyers.

New York City Bar Formal Opinion 2006-3 [via New York City Bar Association Website]
New York City Bar Ethics Opinion Permits Legal Services Outsourcing [via ILW.com]

More and more lawyers are jumping into the blogosphere; however, many are finding that it takes a lot of time and effort to maintain a blog. Edward Poll, the author of the LawBiz Blog, recently wrote an article describing 10 ways a blog boosts a law firm’s image. Number 8 mentioned that lawyers should consider outsourcing aspects of their blog.

8. Delegate.

Worried that you’ll spend too much time blogging? Consider hiring someone to manage the technical aspects of your blog, such as uploading posts and graphics, tracking replies to posts, working on search engine optimization. The expense may be far less than the time spent updating and managing — no matter how easy with TypePad or other tools — that take you away from other marketing activities or even from your practice.

Taken one step further, lawyers can outsource the entire function of their blog — they can have someone design the look and feel of the blog, have someone else write the content that is posted to the blog (with the lawyer reviewing the content prior to posting), and have someone else manage the technical aspects of the blog. The problem used to be finding the right people to handle these tasks; however, with more and more websites on the internet providing easy access to these resources, this scenario is likely to become commonplace.

You can read more about Edward Poll’s writings at the LawBiz Blog

Ten Ways Blogs Boost a Law Firm’s Image [Law.com]

The New York Times recently published an article about the slow-but-steady movement of law firms towards outsourcing. The driving factor? Cost, of course.

The latest is Clifford Chance, one of the largest law firms in the world, with 29 offices in 20 countries, which was to announce Friday a plan to consolidate and move big chunks of its administrative work, like accounting and technological support, to Delhi by next spring.

The shift to India could eventually result in as much as $18 million a year in savings, the law firm estimates.

As more client try to manage their skyrocketing legal expenses and keep lawyers’ billing rates down, more large firms will continue to push certain administrative and back-office tasks to lower-cost providers and areas. This is, and will likely continue to be, a relatively slow evolution in large firm culture and management:

About a year ago when White & Case, another law firm, considered hiring a company in India to handle word- processing activities, it wanted to make sure that documents going over its computer network could not be intercepted or that individuals working in India could not print out the documents or take them home.

And while Richard McKenna, the chief administrative officer for White & Case, said he had been happy with the work the outside firm had done and that some marketing functions had also been moved overseas, he had concerns about sending other documents too far from home.

“We do continue to look at outsourcing as a way to improve efficiencies and manage infrastructure costs, but it’s not a quick decision that we would make,” he said.

Law firms get outsourcing bug [via The New York Times]
“OUTSOURCING” - clients will prefer firms who do it, sooner than you think [via Gerry Riskin]

A new article by Ron Friedmann and Joy London suggest some interesting data about offshoring. First, offshoring of legal works seems to be happening at a slow pace — certainly slower than many experts were expecting. From the article:

Our impression, based on reading and talking to onshore and offshore contacts, is that the volume of work moving offshore is not as large as the growth in our list might suggest. One sign of “more smoke than fire” is that several companies on the original list are no longer in business. Another sign is an absence of visible consolidation, which typically accompanies rapidly growing markets. (Just look at the e-discovery market for a great example of consolidation in a growing market.)

Second, and not surprisingly, the greatest growth is in administrative functions, not pure legal functions:

Bigger opportunities probably lie in outsourcing secretarial support and document processing and other law firm administrative functions. Already, several companies on our list offer outsourced word processing. The continuing merger trend among law firms will, we think, ultimately lead to more outsourcing of all sorts. Right now, many newly merged firms are dealing with lawyer and operations integration issues. Once full integration has occurred (which can take several years), outsourcing will likely increase.

Finally, outsourcing by large firms is picking up momentum, but small firms are also taking advantage of outsourcing opportunities. The article quotes an upcoming article from John Tredennick:

“the ease with which lawyers can outsource work to remote parts of the globe. Today, you might consider hiring a paralegal or secretary who lives in another state or even a different country (and people are doing just that). You can speak with them over the Internet without incurring a long distance charge. You can also send files to someone thousands of miles away faster than you could walk down the hall with a dictation cassette.”

Offshoring legal services certainly has a long way to go, and the path is not an easy one. However, I expect that nearsourcing (e.g., hiring someone a city or a state away) will grow at a much faster rate than offshoring, especially as technology continues to shrink distances. However, as John Tredennick observes, with the growth of the Internet, nearsourcing (and outsourcing generally) is often more efficient than walking down the hall. And that’s one of the most interesting trends of all.

Developments in Legal Outsourcing and Offshoring (via LLRX.com)

Bob Ambrogi and J. Craig Williams, two prominent legal bloggers and the hosts of Legal Talk Network, recently invited Ron Friedmann (President of Prism Legal Consulting) and Ross Kodner (President and founder of Wisconsin’s MicroLaw, Inc.) to discuss how technology and outsourcing are impacting legal practice. The discussion runs for 33 minutes and covers timely issues such as technology trends, offshoring legal work, insourcing, and how firms can use these to their advantage. It also addresses how outsourcing is redefining and redeveloping the practice of law.

You can listen to the discussion free of charge at Legal Talk Network.

Law 2.0: The Outsourcing Component [via Dennis M. Kennedy]

One of the most challenging questions for lawyers new to outsourcing is “what should I outsource?” The answer is simple: outsource the tasks you dislike the most.

Most business people I know hate to prepare their business tax returns. So instead of muddling through the returns themselves, grumbling the entire time about how much time they’re wasting reading the tax code, they send the returns to a CPA who uses specialized software and tools to prepare and file the returns. Yep, that’s outsourcing.

So when you’re ready to take the outsourcing plunge, simply figure out what you don’t like to do and then see if someone else will do it for you.

Carolyn at MyShingle.com recently posted about the tendency for some lawyers to assume a do-it-yourself approach to everything instead of finding someone to help:

I still know many solos who file their own papers at the court instead of using a messenger service or spend time on administrative tasks they dislike instead of bringing someone in who can do a better job.

* * *

Does this mean that you should outsource everything? No. If you derive pleasure from certain tasks - like blogging or cooking or even housecleaning - don’t delegate them. But if you can find a way to make yourself more efficient and free up time to focus on what you enjoy, outsourcing makes sense.

The problem with the do-it-yourself approach is that eventually the administrative tasks begin to get in the way of billable tasks, and both clients and pocketbooks begin to suffer. If a lawyer is electing to file documents herself to save a $25 delivery fee, and in the process is foregoing billable work at $200 an hour, maybe it’s time to run an opportunity cost analysis. (Of course, if she truly enjoys filing documents, then perhaps the opportunity cost is worth it to her.)

The key to successful outsourcing is identifying what you don’t like to do, and then finding someone to do it.

Outsourcing: It’s Not Just for Biglaw [MyShingle.com]
Overwhelmed with too much to do? Outsource everything possible [EscapeFromCubicleNation.com]

A recent ALM Research study found that more U.S. law firms are outsourcing certain functions, but that most are using U.S.-based companies to do the work.

From the study:

• Almost two-thirds of respondents said their firms had outsourced some functions within the past year and more than half reported that their firms had begun outsourcing some functions five or more years ago.
• The most frequently outsourced functions were related to documents—mailroom, messenger, and reprographics. The second-most frequently outsourced functions were administrative—travel and food services.
• Less than 20 per cent of firms surveyed outsource IT functions, but many were open to doing so in the future. Very few firms outsource accounting functions or plan to do so in the future.
• More than 90 per cent of respondents reported that the companies they employed for outsourcing are located in the continental U.S.
• More than 60% of those who outsourced functions said they did so primarily because outsourcing allowed them to focus on core competencies. More than one-third also cited cost savings.

ALM Research Study Finds Nation’s Law Firms Currently Focus on U.S. for Outsourcing Needs [Business Wire]

The New Jersey Star Ledger recently featured an article about the increasing number of lawyers working on a “temp,” project or contract basis. Among other things, the article discusses why the number of temporary lawyers is growing:

From mega-firms dealing with major trials, to smaller ones with a little too much work, to corporate legal departments not quite ready to make another full-time hire, there is a cast of lawyers increasingly available to work on a particular case or project for a couple of weeks or months.

Temporary lawyers allow firms to pick up some extra legal help without paying benefits and bonuses, said Anne Dalena, of Strategic Legal Solutions in Morristown.

“It’s becoming larger, it’s becoming better known, it’s becoming more acceptable,” said Edward Poll, who runs LawBiz Management in California.

The article also discusses why lawyers choose project-based temporary work over full-time positions:

For a good many others, temp work is a lifestyle choice that allows more personal freedom, such as starting a family, said Nancy McMillin, 38, of Ewing, who had three children as she temped over the past four years.

“They say, ‘I want to have a life again.’ The practice of law in a law firm can be a very difficult existence. You give your heart and soul to it and forget about seeing your family,” said David Garber of Princeton Legal.

Vlad Portnoy passed the bar two years ago and has temped ever since.

It’s meant long hours doing document reviews that aren’t always intellectually fulfilling, he said. But the money is good, and it made sense for personal reasons. The 30-year-old Jersey City resident had responsibilities to aging family members, and temping was the only way to get hours that made it possible.

* * *

“It’s not a career,” said Portnoy, who is now looking for a full-time position but will keep temping in the meantime. “I know so much about so many things right now that I really otherwise would never have know.”

The temping lifestyle certainly isn’t for everyone, but neither is the Biglaw lifestyle. Expect temping to continue gaining traction as more clients send out project-based work rather than steady, consistent workstreams.

For some lawyers, temping is tempting [NJ Star Ledger via LawBiz]