Opinion: Outsourcing back office work helps firms focus on law

The legal profession is often accused of remaining in the Dark Ages when it comes to how we present our business to the ­outside world.

The fact is there are other non-legal organisations more adept at engaging with the consumer, and these might well be ready to pounce on the ­market opportunity afforded by the Legal Services Act (LSE) to offer legal services to the man on the street.

This was a key challenge even for a start-up. As a ­professional negligence firm reliant on ­consumer engagement, we ­needed to ­configure the business in such a way to ensure beating competition from all ­corners, including from outside the legal profession. It is accepted that the sector is in a period of change. What better time to start with a clean slate and shape a business and service with the consumer very much at the centre? Wary of the changes afoot, we were anxious to look beyond the ­traditional law firm model.

Our thoughts turned to outsourcing as an option to streamline costs and maximise business benefits. But we soon discovered the horror stories: management nightmares, loss of quality control and irreparable reputation damage, plus the promised cost reductions failing to ­materialise.

But there were positive stories too. We looked at how legal process outsourcing (LPO) is evolving. For example, Clifford Chance’s decision to bring some members of its India-based support centre into the main firm (The Lawyer, 23 November 2009). Nevertheless, this demonstrates just how important it is for a firm to have its core business operating as part of the firm. The Lawyer also highlighted recently the Cripps Harries Hall/Lovells Mexican wave arrangement as a successful model (The Lawyer, 8 March). This is achieved by the City firm outsourcing appropriate work to Cripps at its lower-cost location, with the reassurance that it is conducted under the umbrella of this regional leader’s ­established brand.  

We also noticed a trend towards other types of outsourcing: firms such as Beachcroft, Osborne Clarke and TLT ­Solicitors have signed up to an outsourced library service, for example. There is a big distinction between the outsourcing of functions that are core to the business (ie legal services) and ones that are back office. There would appear to be more risk attached to LPO: as a market leader in legal services, why outsource your legal function to an organisation that is less expert than you? Conversely, for the non-core ­functions, the opportunity is to outsource to an organisation that is more expert.

The management of professional ­negligence cases and insurance coverage disputes is our expertise. A function such as the switchboard is not core to our offering, but remains fundamental as it is the first point of contact between firm and potential client and is key to our engagement with consumers. This service should be ­proportionate in terms of cost, but also excellent quality. Handing this over to an outside provider seems to be the way to achieve this balance. CallCare is the provider we have engaged, in the belief that a company set up to focus exclusively on providing call-­handling services can be of benefit to us.

This period of change in the legal market is an opportunity for firms to review how their businesses are structured, but this should be approached mindfully. For a firm such as ours, where our USP is the ­experience the founders have of handling professional negligence claims, we do not want this ’muscle’ to be compromised by handing over legal work to an external resource. Yet we are happy to admit that we want to increase our profit margins and improve client care by outsourcing back office functions.