Outsourcing likely to make cost pressures tougher

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Legal outsourcing and offshoring will only improve, putting further pressure to keep costs low as the market comes to better accept it, Katherine Sampson, Melbourne managing director for Mahlab predicts.

“There will always be businesses and in house lawyers that will not accept legal outsourcing service providers,” she told Australasian Lawyer.

But outsourcing and offshoring were generally considered to be cost effective at a Mahlab roundtable earlier this month.  However, as cost pressure continues to mount, lawyers uncomfortable with outsourcing will inevitably find ways to move legal work to smaller firms where fees are lower and quality is not compromised, Sampson said.

“Over the years we have seen the move from outsourcing of back office functions such a payroll and typing to outsourcing more of the tasks that lawyers actually handle,” she said.

“This spans legal research, due diligence, document review, litigation support and projects and now, IT and hiring of contract lawyers.”

The key is guidance: investing time, training and supervision throughout the process will result in a more sophisticated outcome.

“Those considering outsourcing need to first invest time and money to understand their core business well  and what they want to be doing and  what can be can  better by a  provider  more cost effectively and faster,” Sampson said.

After the initial setup process, Sampson said it doesn’t stop there.

“You need to invest time and money for due diligence, getting to know the providers and understanding them and their business.

“Additional flow on costs are involved around detailing agreements and expectations, setting up processes and management of providers.”
 

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