What you need to know before offshoring legal services
After the great recession in 2007-2009, corporations turned to the controversial legal services offshoring (LSO) as an answer to the market liberalisation and the pressure on price from clients. The player list now covers many prestigious law firms like Baker & McKenzie, Clifford Chance as well as multinationals seeking to support their own operations like Royal Dutch Shell and Rio Tinto. However, it would be very unwise to follow the market leaders, and dive into the practice without considering current trends that affect the industry in 2016.
Beyond cost savings
– Why should you pay $7 for a task in the U.S. while you can have it done for $1 in Asia?
This is a typical question that you were likely to hear in the first days of the offshoring resurrection. Nevertheless, companies focusing solely on cost-reduction when delegating their legal functions are more prone to disastrous decisions, as the hidden costs of communicating and coordinating with suppliers are always there. In 2016, you need a more comprehensive, integrated approach in which the main drive lies in establishing a smooth operation between local and offshore teams. The typical model is: your lawyers and attorneys are dedicated to dealing with cases, while specialising in specific tasks allows offshore staff to learn shortcuts and figure better methods to achieve the given results. In that sense, cost saving will come as you have planned.
The increasingly diverse legal services
Simply speaking, legal services can be divided into 3 categories: front, middle and back office functions.
– Front office functions: performed by lawyers, including document review, contract drafting, due diligent, appellate briefs etc.
– Middle office functions: performed by paralegals and support personnel, including commodity research, multijurisdictional surveys, knowledge management, subjective coding etc.
– Back office functions: performed by administrators and data staff, including basic filings, proofreading, legal transcription, word processing etc.
5 years ago, law firms only outsourced or offshored their back office, or so-called mundane functions. In 2016, this practice has changed significantly as distributed teams are moving up in the complexity ladder, taking on tasks that are previously preserved for lawyers and paralegals only. Better education backgrounds and mature legal practices in destination countries allow Asian staff to even perform complex legal briefs and court pleadings. As a newcomer in the offshoring industry, you may want to delegate simple tasks first before levelling up into the front and middle office functions.
Breaking confidentiality and data security barriers
Many claim that the advents of cloud-based technology and project management solutions have brought answers to the long-standing obstacle in offshoring legal services: confidentiality and data security. The landscape has taken a positive turn in recent years as Asian governments enforce their laws to tackle high-tech crimes while advanced technologies help Western law firms stay more confident when sharing their data and legal information.
Of course, there are still more trends and factors you need to consider before offshoring your legal services. If you need a detailed consultation, AS White Global want to hear from you so we can guide you through the whole offshoring process in Asia.