The desire of law firms to emulate other businesses in the efficiency of their processes is making headway. From technological advancements to outsourcing roles, law firms have started to see continued progress. Indeed, allowing certain support staff roles in both the practice and business of law to be outsourced has been particularly beneficial in enabling law firms to focus in on the evolution of legal services.
An article published by Thomson Reuters’ US-based Legal Executive Institute reveals that firms of all sizes and ranks are looking outside the company to get parts of their day-to-day work accomplished. Based in the US, Peer Monitor’s Staffing Survey gathers law firm support staff information, including which support staff roles are being outsourced. Of all the roles covered in this year’s survey, the following were surveyed for outsourcing: benefits administration, compensation administration, copy centre/mail room, facilities/office services, IT project management, legal research, networks and security, user training, and word processing.
The proportion of firms utilising the practice of outsourcing was quite similar between Am Law 200 firms and Midsize firms (those outside of the top 200), with around two-thirds of the firms surveyed having outsourced at least one position.
In fact, those firms that have leaned on outsourcing continue to do so at an increasing rate. Of the aforementioned nine outsourced roles tracked (eight of which had outsourced full-time employees or FTEs), the number of total internal FTEs for all firms contracted 3.5 percent, while the outsourced position growth of these same roles was 6.6 percent. For firms that are already outsourcing, the cost effectiveness of transferring these roles externally is an increasingly favored direction.
However, there seems to be a tipping point. Am Law Second Hundred firms are outsourcing the highest percentage of FTEs for these roles with 35.5 percent in 2017. These firms also have the slowest growth in outsourced support staff FTEs at 3.9 percent. It’s likely that Am Law Second Hundred firms are using outsourcing as a way to increase margins; however, the data suggests that these firms appear to have reached a point where they are experiencing diminishing levels of returns from outsourcing. As the Am Law 100 and Midsize firms reach the same proportion of FTEs outsourced for these roles, it will be interesting to see if they also begin to show signs of tapered benefits.
Across all firms there are a few key support staff roles that are outsourced more frequently than the rest, with facilities/office services, copy center/mailroom, and word processing roles seeing more outsourcing. predominantly, copy center/mail room jobs are being outsourced more than their internal counterparts, and continue to extend that trend with a 5.54 percent year-over-year FTE growth from 2016 to 2017. Word processing and facilities/office services outsourcing has slowed or regressed, so these roles might not present the same returns when outsourced.
With the legal services industry in the midst of being transformed, in a year’s time or more, a new and different story may emerge for how law firms are staffing support around their lawyers, including the function of outsourcing itself.