Law Practice Management Asked and Answered Blog

Category: Law Firm Competition

Dec 22, 2009

Is Your Firm Ready For the New Competitive Landscape

Question:

At a recent partner meeting we discussed the current economy and what changes we need to be thinking about both now and when we come out of the recession. What are your thoughts?

Response:

As law firms emerge from the current recession many will face many new business realities and be forced to consider whether existing business models are still appropriate for the future. Legal process outsourcing (LPO), off-shoring, virtual offices, alternative billing, etc. We believe that the recession may accelerate the pace by which firms reevaluate existing processes and consider new business models.

Ten years ago (1999) the ABA hosted the "Seize the Future" conference in Phoenix, Arizona.

The conference predicted massive change fueled by the internet. Many of these changes we have already witnessed and experienced – others are yet to come – possibly in the near future. Richard Susskind's popular book "The End of Lawyers: Rethinking the Nature of Legal Services paints an interesting future. As we emerge from the recession pressures will exist that may excelerate some of the other changes that have been predicted.

Here are some changes that some firms are already implementing:

Outsourcing back-office support functions such as accounts receivable management and collections, leased employees (PEO), billing and accounting, IT support, payroll, facilities management, copying and duplicating, etc.
Outsourcing legal services to contract attorneys and paralegals and on-shore and off-shore legal process outsourcing (LPO) providers.
Unbundled legal services by clients with segments of work assigned to in-house counsel, outside counsel, and on-shore and off-shore legal process vendors.
Partnering by U.S. law firms with on-shore and off-shore legal process vendors.
Internet service delivery models.
Flat fee billing arrangements by large law firms with large major corporate clients.
Success fees and risk sharing with clients.
Virtual law firms.
Virtual employees.

Here are a few examples:

The key ingredent is to not get stuck in the past. Incumbancy and pass success has never been worth less. Ask General Motors.

John W. Olmstead, MBA, Ph.D, CMC

Dec 16, 2009

Off-shore Outsourcing Tips

Question:

Our firm is beginning to consider off-shore outsourcing. Our clients are asking about this as a service delivery option. Do you have suggestions?

Response:

Off-shore outsourcing is the new frontier. While there are opportunites and benefits that can result there are also pitfalls. Here are our thoughts:

Do your homework. Proceed with caution and do extensive due dilligence.
What are reasons, objectives, for such an arrangement?
Do a search for potential vendors? Ask other law firms who they are using and what their experience has been?
Obtain a certified photo of the vendor's premises.
Insure that the vendor has appropriate data security in place at their premises.
Insure that the vendor has third party audits conducted.
Obtain vendor references.
Verify vendors past history with clients.
Review vendor contracts.
Determine how money will be transferred.
Check into liability issues and coverage with your malpractice insurance carrier and insure that the vendor has professional liability insurance.
Check ethic rules.
Look into client privilege issues.
Research export control issues.
Obtain client consent in writing.
Start with a small pilot project and then initially on small projects at are not subject to export control rules.

Start slow with a small project and monitor results. Build up your initial experience.