High-paying clients aren’t the only factor contributing to a law firm’s profitability. The key to success is workflow optimization. Since practicing law involves a series of highly complex tasks coupled with generic paperwork, even a well-optimized work distribution may keep legal professionals from substantive activities.
That’s why legal process outsourcing (LPO) is gaining momentum. Legal outsourcing involves law practices delegating certain tasks to external firms. These assignments may include anything from research and document review to intake and court appearances.
While expanding an in-house legal team may seem like a preferable decision, it often involves high costs and requires more time than outsourcing legal support services.
According to a 2019 Altman Weil Survey, 48 percent of law firms take advantage of legal outsourcing. And, 57 percent of respondents use part-time lawyers, while 24 percent report outsourcing non-lawyer tasks.
Some law practices prefer to outsource to offshore law firms. While legal process offshoring may be less expensive than local LPO, it can come with numerous downsides, including poor work quality, time and language barriers, gaps in communication and ethics-related questions.
For these reasons, it’s better practice to hire a company like Alert Communications that provides 100 percent United States-based legal process outsourcing.
Key Benefits of Legal Process Outsourcing
The legal outsourcing services market is expected to grow by more than $16 billion by 2024. In the U.S., about 300,000 jobs are outsourced annually. The key benefits of legal process outsourcing include:
1. Staying Competitive
Legal firms are always working to increase their market share. This involves providing high-quality services and practicing stellar client retention. At the same time, clients expect lawyers to go above and beyond the traditional offering of services and support.
To stay competitive, law practices often feel compelled to expand their in-house teams, thus making substantial investments. This trend only accelerated with the spread of COVID-19.
LPO allows you to stay competitive without hiring additional in-house lawyers or receptionists. Oftentimes, you get the same level of professionalism at a fraction of the cost of an in-house employee.
2. Flexible Staffing and Wider Area of Expertise
Since not all cases are created equal, some require more attention than others. The extra help you need for a case in January could be useless for February cases.
Hiring an in-house team member and paying associated overhead costs is expensive and time-consuming. Outsourcing to an outside specialist promotes flexibility. Using external assistance can help you scale up for a specific case or project.
Many smaller law firms also plan to expand their expertise but put it off due to insufficient funding. Using external legal support services, firms can improve their offering without hiring in-house team members for each new field of specialty.
3. Lower Legal Service Cost
When hiring in-house professionals, firms need to allocate the budget for salaries, benefits, onboarding and training. Meanwhile, bringing another team member on board is always a risk. When an experienced lawyer quits, the firm’s cost to replace them can range from $400,000 to more than $800,000.
With LPO, you work on a contract basis, thus minimizing overhead expenses associated with full-time employees. This outsourcing structure works well for both small and large law firms. Small practices can appreciate low risks and cost efficiency, while larger firms benefit from time saved on training and onboarding.
4. Better Work/Life Balance and Lighter Workload
Small and medium-sized law firms are constantly under pressure to earn more money. Legal teams tend to work overtime, finishing current cases and taking on new ones as quickly as possible.
By using legal support services, law firms can lighten the workload without losing a substantial part of their earnings. And, experienced lawyers don’t have to spend precious time on intake or repetitive paperwork when they should be focusing on more complex tasks.
This doesn’t just improve the work/life balance for team members, it also boosts employee satisfaction rates, which, in turn, affect the firm’s profitability.
5. Improved Intake Process
Small and mid-sized firms often don’t have time to arrange a top-notch intake system, thus losing high-paying clients. Even a single lost lead can cost a law firm tens of thousands of dollars. The top benefits to your law firm for improving the intake process include high conversion rates, improved ROI (return on investment), better retention results and much more.
By working with legal process outsourcing providers, it’s possible to arrange high-quality intake while saving time and money. An outside intake service has the time and human resources needed to arrange a detailed intake process that prevents leads from slipping through the cracks.
5 Examples of Work That Can Be Outsourced
Depending on the company you plan to outsource legal services to and the amount of help you need, it’s possible to delegate a wide variety of tasks. Here are a few examples of work you can outsource.
1. Court Appearances
A substantial number of court appearances are short. To spend 10 minutes in the courtroom, a lawyer may need to spend an hour waiting for the hearing and another hour on commute.
By outsourcing these court appearances to an appearance counsel service, you can save precious time without losing any quality. Appearance counsel services involve another law firm going to the court on behalf of your lawyers. Such outsourcing can help you build on the billable hours.
Depending on the firm you work with, you can delegate both non-substantive and substantive court appearances.
2. Administrative Tasks
Administrative tasks tend to take up a formidable amount of time, keeping lawyers from focusing on more important client matters. These tasks include:
- Call answering
- Retainer and contract services
- Webform lead response
- Appointment scheduling
- CRM management and data entry
They often require 24/7 attention, which can be tough to manage for small and mid-sized law firms. By outsourcing administrative tasks, you don’t just save time and money. You can also give higher quality of service to potential clients than your own team might otherwise be able to provide due to lack of time.
3. Mass Tort Campaign Intake
Mass tort campaigns always require a heightened focus on intake since mass tort leads are so costly. Missing leads during the initial intake process can hurt your campaign’s overall marketing ROI. When a law firm starts a mass tort campaign, the entire team is under serious pressure to process all incoming requests.
By taking advantage of mass tort services provided by an external firm, you can ensure each lead receives due attention, thus maximizing conversion rates. While an external company is dealing with mass tort intake, your team can focus on other tasks.
4. Discovery and Discovery Responses
Discovery and discovery responses are time-consuming and tedious. While it’s hard to ignore the importance of this process, many lawyers are losing valuable time requesting and exchanging information, sifting through thousands of documents and taking dispositions.
Outsourcing the collecting, processing, reviewing and producing of discovery materials to external legal support services can save you an immense amount of time without taking a serious toll on your budget.
E-discovery doesn’t just require time and expertise. Its managing costs are usually high due to technology implementation, maintenance and employee training. That’s why outsourcing this task is cost-efficient. Meanwhile, experts with vast technical and legal experience tend to provide better and quicker results.
5. Corporate Documents
Lawyers always face strict time limitations and deadlines. Drafting corporate and other legal documents involves time-consuming research.
Both small and mid-sized law firms suffer from a lack of time and workforce. Just by keeping sufficient focus on high-quality documentation, they could be delaying the entire case.
Many legal professionals have to work after-hours to complete documentation requirements. By outsourcing these tasks to LPO providers, firms have the opportunity to meet strict deadlines without sacrificing work quality.
FAQ About Legal Process Outsourcing
Q: Is legal process outsourcing only meant for large law firms and corporations?
A: No. Many law firms mistakenly believe that outsourcing is only available to large legal practices. In reality, LPO is beneficial for small and mid-sized firms. It allows you to obtain high-quality work at a fraction of overhead costs associated with hiring in-house team members. Since legal outsourcing services are designed to save time and money while maintaining high quality, the ROI increase for small firms is more visible than for large practices.
Q: Why is legal process outsourcing better than legal process offshoring?
A: Outsourcing your legal tasks to an offshore company can result in confidentiality issues, ethical questions, time barriers, hidden costs and conflicts of interest. When working with an offshore law practice, you can’t be 100 percent sure of the work quality since such firms’ legal responsibilities are often vague at best. With a U.S.- based company, it’s much easier to establish proper communications, ensure efficient collaboration and eliminate confidentiality issues.
Q: Is it safe to share my firm and clients’ confidential information with an outside provider?
A: Before you start working with a respectable LPO provider, they should sign a Non-Disclosure Agreement (NDA). These firms understand that their reputation depends on the ability to work with confidential information. Besides asking lawyers to sign an NDA, your project manager must arrange strict supervision to ensure compliance.
Q: Does legal process outsourcing mean a compromise in my law firm’s quality of service?
A: No, just the opposite. When you work with a service like Alert Communications, you get access to top-notch experts whose main goal is to improve your firm’s bottom line. Our ATSI- certified team of U.S.-based call and intake specialists receives expert training and focuses only on the legal field.
Q: How much money can my law firm expect to save by outsourcing some of its legal services?
A: Depending on the type and amount of work law firms outsource, they generally see 40 to 60 percent in cost savings. Cost-efficiency is the most important benefit of legal process outsourcing. Overhead costs associated with in-house team members are much higher than LPO expenses. For example, an in-house lawyer may cost $150 an hour while an external service provider may charge $75 an hour.
Q: What are some legal process outsourcing trends to track over the coming years?
A: With the help of artificial intelligence (AI) and machine learning, law firms will get an opportunity to outsource some of the manual tasks to high-quality software. AI will help streamline many processes by providing insights into client behavior based on intake information.
One of the latest amendments to the Federal Rules of Civil Procedure made electronically stored information discoverable on handheld devices in litigation, erasing the line between desktop computers and smartphones. These changes are likely to cause a spike in demand for e-discovery services, thus making LPO more appealing for law firms of all sizes.
Improving Your Law Firm’s Efficiency and Profitability with LPO
Legal process outsourcing is when a variety of legal tasks are outsourced to external legal experts based in the U.S. It can be an excellent solution for a law firm looking to improve its services, widen its areas of expertise and minimize in-house overhead costs.
By taking advantage of legal outsourcing services, you don’t just cut costs and save time. You improve your firm’s reputation, increase employee satisfaction rates and increase opportunity for scaling and growth.
The key to efficient LPO is securing a partnership with a reputable U.S.-based service provider. Legal professionals with solid experience and stellar reputation can become a valuable asset to your law practice, keeping the focus on improving its bottom line.
Alert’s 100 percent U.S.-based intake specialists help your law firm stay competitive and profitable by managing calls and client intake and providing retainer and contract services. Learn more about how we help law firms improve their bottom line.