Is Outsourcing your Law Library worth it?

photo credit: Robert Reukema, LLM

photo credit: Robert Reukema, LLM

The legal landscape is always evolving, and firms are constantly on the lookout for advantages that would maximize profits and lower risk. Today we will be talking about one such case: law library outsourcing. As more information is being converted into digital one and the need for diverse types of information intensifies. When firm partners are looking to branch out to business development and finance, a couple of issues – that everybody face – appear.

Do you choose to opt for a greater self-serve information model, risking overloading your lawyers and other staff (who are already working fastly and efficiently)? How does the cost of IT and information resources justify the benefits of automation and improved access? How do you keep your current clients satisfied with their information needs and how can you gain new ones?

While firms are looking for answers to these questions, outsourcing has come up time and time again. The CEO of one successful company in the outsourcing sector for law libraries, firmly believes in what they set out to do: Outsourcing gives a company leverage in their core business. However, as powerful as it is, outsourcing isn’t always the answer to every problem.

Although outsourcing has become more present now than it ever was, false information still abounds about it. We will try to debunk some of these myths that frequently crop up in conversation when discussing outsourcing with law firm managers. After we’ve looked at the common misconceptions about this process, we will look at the benefits that outsourcing brings a company.

1. Outsourcing is cheaper than hiring.

There’s a common saying that outsourcing allows you to do the same for cheaper and (sometimes) more efficiently. That may be true in the long term. In the short term however, it isn’t so. First of all, the outsourcing company doesn’t work for free. Couple of fees intervene when you’re outsourcing legal work to a specialized company: management fees (in addition to the cost of the work that was provided), certain benefits, time that was saved, etc.

But the real benefits of outsourcing become visible economically when you look at the long-term plan. After all one-time fees have been dealt with, the financial and managerial functions are now the responsibility of the outsourcing firm. The costs of employee churn rate, increases in salary, perks and bonuses and expenses such as workers’ compensation are all dealt with by the company that is handling the outsourcing. The company that hires an outsourcing firm has only to pay only one invoice to one provider and all the other elements such as service level agreements and achieving planned targets are included in the outsourcing agreement.

2. Outsourcing is bad for company morale and culture.

While not entirely false, outsourcing can be controlled and managed. Insight from law firm executives tells us that management is considering this issue more than they should be, worrying even about the effect that outsourcing would have in their company than they publicly let to know.

Employees may view outsourcing as a loyalty issue. However we should remember that the decision to outsource is never personal and concerns only the health of the business. The outsourcing provider may provide greater efficiency not only because of more people, but because of the technology they own, which allows them to streamline work flow and processes, their recruiting and hiring skills and a higher flexibility to meet needs with the resources available, no matter the situation.

3. Outsourcing means sending work away from home.

This is the most persistent myth about outsourcing and it has been debunked many times before. Outsourcing can take many different forms that do not include sending work (and money) to far-away countries. It’s possible to outsource to local companies and in fact, the majority of the outsourcing arrangements out there is done on the spot in a law firm’s office. It’s not uncommon to have the outsourced employees working hand-in-hand with your own attorneys and staff – in this respect the only that concerns them is the paycheck itself, not where it comes from. Outsourcing is also increasingly allowing businesses to delegate work to people who are working from home.

Another variation of this myth is that your employees will lose their current jobs. In most cases this isn’t true and even if it is, a reputable outsourcing company will work with finding another job for the employee who is going to be laid off.

4. Outsourcing lowers wages and does not value the real value that the outsourced employee provides.

The bigger outsourcing firms have a policy to provide a compensation package and a way to match the wages of the employee who is outsourced. While it isn’t always possible to offer the same benefits as a multinational would, there are many options for fair and balanced compensation packages that an outsourcing firm will try to match.

An outsourcing company also offers superior soft benefits such as improved support and coaching, as well as more opportunities for advancement and career development. Offering these benefits is also why an outsourcing company’s churn rate is so low. Employees that work in outsourcing are the hands of this industry so they are treated very well.

5. Outsourcing means that one life-long job is turned into an one-off assignment.

If nature has taught us anything it is that the only thing that is constant in the universe is change. No job has ever remained unchanged over the years. The forces of globalization and technology is what has changed this. If you’re an employee in a well-known outsourcing company, you’re neither worse nor better than an employee in a “traditional” law firm.

Outsourcing can sometimes provide that temporary relief that is so needed in disaster recovery situation. Take for example the case of one university library system that used an outsourcing firm to deal with a long-term assignment that would require less and less involvement over time. The people that got involved in this project knew about this and so, as time passed and needs changed, some employees were lost due to attrition and others moved on to other projects.

On the flip side, there are outsourcing companies that have outsourcing contracts going strong for 10 years and longer! In this constantly changing work landscape, 10 years is considered almost a life-time. However, does such a contract remain unchanged with time? Not necessarily. Contracts are reevaluated constantly and compared to current market prices. This means that a long-running legal outsourcing company has proven its worth by staying in business. Without delivering value, quality and the most excellent service, an outsourcing company will not last long in this arena.

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