The Changing Face of Law Firms – Introducing External Expertise

6 Feb 2013

In December, the president of the Manchester Law Society was quoted in the regional press urging legal firms to embrace change and consider using external expertise.

In today’s competitive business climate, economic pressures and cost-cutting exercises continue to dominate the legal landscape. Outsourcing traditional business functions such as HR and IT are an attractive option for many firms.

CMS Cameron McKenna did it when they signed a ten-year deal worth in the region of £583 million to outsource middle office services. The decision followed a thorough strategic review where they sought to identify the best ways to structure a number of services, including business services and operations.

Outsourcing provides tangible benefits but only if you have the time to invest and put a strategic plan in place. Some benefits associated with outsourcing include the following:

  • Economies of scale. It’s challenging to meet the demands of a dynamic business but by outsourcing functions such as HR, marketing and IT you could be freeing up budgets, people and resources. Consider economies of scale when purchasing equipment, talent, software and supplies.
  • Competitive advantage. Remain competitive by outsourcing talent and niche expertise. Regardless of whether you are wanting to fill gaps in internal competencies or access high level talent, outsourcing is an option. Firms are increasingly looking at legal offshoring – the ability to tap into global expertise.
  • Stay ahead of the curve. An outsourced provider can add value by sharing best practice from other firms. Outsourced partners will be up to speed on leading industry changes and developments that can help you cut through the noise.
  • Room to grow. You may not have the internal resources to commit to in-house expertise; outsourcing provides increased flexibility in cost control and organisational design.

Perhaps the biggest area of concern for firms considering outsourcing is striking the balance between quality and cost. Consolidating certain operations can drive efficiencies and save time but it’s important to keep one eye on quality control to ensure your needs are being met.

Some people have argued that outsourcing business functions will be the key to survival for many firms in the new legal landscape, enabling them to grow by reducing their cost base. There’s even evidence to suggest that firms are creating roles such as ‘director of strategy’ to help to plan over a two, three or even five year period.

For law firms of all sizes, competing in an ever more competitive market requires resourcefulness. It’s important to offer an attractive value proposition, have effective management and maintain a competitive edge. Outsourcing can pay dividends but only if executed and managed properly.