LawSourcing Blog

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]

Law.com reports that online legal matching, a business model that uses automated technologies that match specific needs of a person seeking a lawyer to lawyers whose practices focus on those areas, is quickly picking up momentum. Several companies, including Legal Match, have automated software that matches the needs of a client with listed attorneys who fit the criteria that the client has specified.

As noted by Law.com, most State bar associations are issuing opinions that, when certain specific guidlines are followed, online legal matching services pose no risk to ethical standards. Further, the FTC has reported that online legal matching violates no ethical boundaries. The Professional Ethics Committe of the State Bar of Texas has joined in and issued an opinion that supports allowing Texas lawyers to participate in for-profit Internet sites that help match lawyers with people seeking legal services.

What online legal matching doesn’t do, however, is create complete transparency between the consumer and the potential lawyer. Indeed, the consumer is left to trust that the matching service’s software will identify the best lawyer for that consumer based on the idenitifed criteria, taking some control away from the consumer in making that decision. Online legal matching certainly is a step in the right direction in empowering the consumer — but it’s probably just the beginning of a movement that completely changes the traditional model of how consumers hire lawyers (and how lawyers attract new clients).

The Future of Client Acquisition is Upon Us [Law.com]

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]

If you are interested in previewing the new LawSourcing website as part of an exclusive group of Beta testers, please send an email expressing your interest to beta@lawsourcing.com. Beta testers get early access to the site and a free 12-month upgrade on the service.

Questions? Email us at beta@lawsourcing.com.

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]

Over the past few weeks Ed Poll of LawBiz posted several articles about outsourcing, particularly legal outsourcing. They’re all worth reading in their entirety, but here’s a quick scan of his posts:

From Outsourcing spreading:

Law firms are coming to this topic somewhat late. Immigration law firms are finding that many of their functions can be performed in India; a large, national law firm consolidated all of its back office tasks in West Virginia, and other law firms are centralizing other functions in specific areas where the greatest talent pool and lowest cost of performing the work exists.

Generally, this benefit, this concentration of effort based on economies of scale, has been limited to the larger firms. Now, however, even the smaller firms are looking at this approach. Recently, a 12 lawyer law firm approached me with the idea. And even sole practitioners are beginning to look at how they can do more outside of their own office when the economics justifies it. Hence, “virtual assistants” have become a new profession.

From Outsourcing is taking over:

More than half of our spys, in a government department opened only 2 years ago, created to prevent another 9-11 tragedy, are not government employees! They’re employed by the private sector!

From More outsourcing:

More and more . . . technology is permitting the placement of these staff functions where they can be performed well, but more inexpensively. Thus, lawyers can be in the center of things, be where the clients and courts are, and have their support be elsewhere, in less expensive “digs.” Sounds more and more like the “virtual assistant.”

Ed’s definition of outsourcing is also worth mentioning: A new term to describe the phenomenon of having work done most economically and most efficiently. Note that his definition says nothing of offshoring or displacing workers. It’s simply a matter of allocating work among those best situated to perform it. In a few situations that might involve offshoring, but offshoring is certainly not a requirement of legal outsourcing.

Smart lawyers understand that legal outsourcing is here to stay, and they are taking advantage of it to make it work for their benefit. It will be interesting to see how quickly it catches on among the larger population of legal professionals.

Outsourcing spreading [LawBiz]
Outsourcing is taking over [LawBiz]
More outsourcing [LawBiz]

Okay, so I’m waaaaay behind on posting to the blog. We’ve been getting things ready to launch LawSourcing and haven’t had much time to write blog entries. We’re really close to putting up the LawSourcing Beta site, so expect more blogging — and a really cool site — soon.

This week’s issue of Business Week highlights DuPont’s legal offshoring relationship with Office Tiger. BW’s title “Let’s Offshore the Lawyers” is a bit misleading, since Office Tiger is doing administrative tasks such as document scanning and discovery support, and not analysis or drafting. However, many corporations are keeping an eye on the relationship to see if it works:

By going offshore, DuPont aims to save 40% to 60% on document work and cut up to $6 million from its annual $200 million-plus in legal spending. It also hopes to shave months off the discovery process in court cases. But the move is risky. In industries from software to customer support, corporations have run into myriad logistical and quality problems with offshore outsourcing. If OfficeTiger stumbles and doesn’t have the evidence ready by December, when the asbestos case could go to trial, it could cost DuPont millions.

But if OfficeTiger delivers, it could mean big changes for the $225 billion U.S. legal services industry. DuPont’s legal department has been a pioneer in cost-cutting since the early 1990s, saving more than $100 million over that time through automation, outsourcing, and reducing the number of outside law firms it uses. Offshoring is the logical next step. While firms in India, the Philippines, and elsewhere have been processing legal documents for years on a small scale, the size and complexity of DuPont’s deal with OfficeTiger pushes it to a higher level. “If DuPont does well with this, you will find other companies taking a good look,” says Bradford W. Hildebrandt, chairman of the legal consulting firm Hildebrandt International Inc., which estimates U.S. firms can save 25% to 35% by farming legal work to Asia. “Ultimately, there may be little limit to what can go offshore.”

That doesn’t mean U.S. lawyers will be getting pink slips, or even lowering their hourly fees. They’re still needed for developing arguments, writing briefs, and other trial work. But DuPont figures 70% of the labor in a typical insurance or liability case can be outsourced.

Expect to see this trend continue.

Let’s Offshore the Lawyers [Business Week]

* A mangling of Henry VI, part II, act IV, scene ii, lines 83–84 by William Shakespeare.

David Meister, a prominant author of several books about professional service providers, recently posted a blog entry that discussed how to market yourself when only doing “one-off” projects (i.e., where you are retained for only one project, not for multiple projects in an ongoing relationship). A reader inquired about whether there are marketing activities that would be useful when looking for one-off projects rather than repeat business clients.

Among a number of suggestions, Maister states that it’s very important factor to have a webiste with “lots of content” so that people who don’t know you can see what you have to offer. Interestingly, in a later comment to Maister’s blog post, Maister then suggests to look at the situation from the perspective of the buyer of the services. He explains that in a one-off transaction there’s higher risk (because you don’t get a second chance), you have to trust a stranger who you’re hiring, and you really need the referrals of others to reduce nervousness and insecurity.

So, when a buyer is hiring a service provider for a one-off project, that buyer needs to know that the service provider is trustworthy and will stand behind their work. eBay recognized this in its infancy and created a community feedback mechanism to allow members to police themselves. By rating each other, members have the incentive to provide exactly what they are offering so they can build their credibility and become trustworthy members of the community. For the most part, however, eBay involves the sale of products, not services.

Building this credibility on the services side historically has occurred in the “offline” world (e.g., through word of mouth, referrals, etc.). However, over the past few years, online eBay-like communities for the buying and selling of services, as opposed to products, have been created. Through these online communities, buyers of services are able to quickly and efficiently hire service providers for one-off projects. Perhaps these online communities, where buyers can immediately look at a service provider’s bio, work history, and feedback from other buyers, will become the best way to market youself for one-off projects.

Marketing in a One-Off Industry [www.davidmaister.com]