September 2006
By Richard Phillips, Operations Director, www.outsec.co.uk
Part Five: The Lessons of Outsourcing
“History is merely a list of surprises. It can only prepare us to be surprised yet again”.
Kurt Vonnegut’s quote could equally have been referring to the world of law. Enormous change is predicted to occur over the next few years within the UK legal profession. It is an unpredictable and somewhat scary proposition for many but it also represents a unique and thrilling opportunity for those keen to embrace the technological changes arising on an almost daily basis . Some firms have already begun to prepare for the shakedown by reviewing their position on the legal motorway and changing lane accordingly.
The application of outsourcing within the business mix is now a crucial part of the redrawing of existing legal practices. The successful law firm of the future will use outsourced functions as a matter of course, in areas as diverse as IT, secretarial services, telephony, document management and storage and HR. Almost all elements outside the fee-earner, can and will be moved off-site, either offshored to wholly-owned subsidiaries abroad or outsourced to independent service providers. It is an incontrovertible fact that outsourcing is not going to go away and that it will change forever the way that legal firms function. Future UK government legislation as implied by the Clementi recommendations will only accelerate the speed of adoption of new working methods. So what have we learnt from outsourcing and how can the lessons be applied? There are five main observations that may be drawn at present.
1. The Ideal Partner - “The art of progress is to preserve order amid change and to preserve change amid order.” Anon
The choice of partner in any new collaborative partnership is crucial to the success of the venture. Outsourcing is like a marriage and must be worked on by both sides to be successful. Remember that this a long-term relationship and will be more equal than the conventional user-supplier one. Cross-border relationships, whilst attractive to the bottom-line in principle, do not always thrive in practice and can create more problems that they solve. Familiarity with client ethics and internal working practices will ensure a more successful outcome than one based on price and cost alone.
2. The Perfect Place – “If you don't know where you are going, you can never get lost” H Cohen
Outsourcing does not always work in every instance in a firm. It must be applied carefully and with due diligence to the relevant departments and individuals within an organisation rather that on an all-encompassing basis. For example, Personal Injury and Criminal may be better suited to using outsourced secretarial support than Conveyancing. Do not make the mistake of trying to crow-bar new methods of working into a system that does not require them. Be clear what can be achieved by outsourcing before implementation.
3. The Right Attitude- “I am always doing that which I can not do, in order that I may learn how to do it.” Picasso
Internal resistance to change is a powerful deterrent to successful application. There must be a willingness to embrace fresh methods of working from within any organisation. Identify “early-adopters” who welcome the challenge of the new and have them as the flag-bearers of change. The world is moving so fast these days that the one who says it cannot be done is generally interrupted by someone already doing it.
4. The Wrong Reasons - “Anxiety is, in great part, the result of trying to do today's jobs with yesterday's tools” Marshall Mcluhan
As outsourcing is not a universal panacea and will not solve problems already inherent within an organisation. Indeed it may exacerbate existing strains and highlight flaws. At best, it would operate as a placebo. Look within first before considering outsourcing. Outsourcing motivated by profit alone is not the best reason for implementation. Papering over fundamental cracks in a business by using off-site resources will always be a short-term solution. It will not eliminate HR, recruitment or IT-related issues – it will simply draw attention to the deficiencies. For example, reducing headcount can further demoralise staff who will already feel threatened by the implications of new technology. This will lead to further drops in productivity and profitability as negative sentiment prevails. Change for change’s sake is the worst possible reason for outsourcing. There may peer pressure and a sense of missing an opportunity to utilise new and little-understood technological advances to enhance company performance but this only results in hasty decisions being made.
5. The Right Reasons - “The only limit to our realization of tomorrow will be our doubts of today.” FD Roosevelt
There are many reasons why outsourcing can work. Empowerment of existing employees is a powerful tool for successful implementation. The “selling” of outsourcing to a sceptical audience is crucial. A key method of gaining acceptance is the freeing up of staff to undertake more productive stimulating work. One example would be the ability for a legal secretary to move up to para-legal status by using off-site typing support to relieve her from tedious keyboard duties.
Outsourcing can be a practical tool to achieve greater efficiencies when applied in a diligent, intelligent manner. Higher productivity and, ultimately, better profitability and continued business survival are delivered as matter of course. There can be little doubt too that, in the global village we now inhabit, the business process of using off-site resources will become the norm very rapidly. The implications for the legal profession in the UK are enormous and must be approached head-on in a rational manner. There are amazing opportunities in this ‘Brave New Legal CyberWorld’.
