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Against the backdrop of the global financial crisis crippling much of the business world in recent years a trend has taken off, the outsourcing of routine legal work to specialist companies. The GFC and the subsequent double dip recessions in much of the world have led businesses, large and small, to think of ever more creative cost cutting strategies. Outsourcing is nothing new, and with technology continuing to support globalisation outsourcing to firms outside of your own country of business origin is becoming more and more common.
Legal outsourcing is often thought of as in house lawyers sending the more routine and time consuming aspects of their work, such as contract drafting and document review, to generally speaking Indian ‘super-firms’. But it isn’t just for the global companies like Rio Tinto and Macquarie Bank, it can be utilised to equally great effect by small and medium enterprises (SMEs). There is serious untapped potential for SMEs to outsource large quantities of the legal work they would normally take to a local firm to specialist drafting and review firms anywhere in the world.
How it can benefit your business?
Cost
The major benefit to your business from legal outsourcing is cost, it can be significantly reduced. Consider the example of an employment contract, engaging a local firm will require time giving instructions, time spent drafting, time spent revising drafts, and then reviewing the final product, all of which is charged at an hourly rate. Legal outsourcing firms on the other hand normally charge a fixed fee for the final product and often include revision in this price. It is even possible to go to a local firm for advice and even review of something you have drafted by an outsourcing firm; this however will be a fraction of the time spent and thus hourly rate paid on your project by the local firm.
What legal outsourcing is really doing is removing the most expensive component of most exercises, the drafting time, and making it far cheaper. This makes legal advice for more accessible to SMEs. Where once you may have considered simply not undertaking the task or not getting advice you can now engage highly experienced lawyers and not break the bank.
Quality
A common concern about legal outsourcing is that you will end up with a product of lower quality, the old adage of ‘if you want something done right do it yourself’ seems to be behind this thinking. It is true that some companies offering legal outsourcing services are not of the same standard as local practitioners. The answer to this problem is simple, make sure you are dealing with specialist professionals, and most importantly make sure they are lawyers. By having registered lawyers you have the guarantee of expertise and professionalism as lawyers are bound by professional ethics requirements. This is no different to the care you would take engaging a firm face to face.
If you have outsourced to a reputable firm then the concern that their services will be of lower quality is really very misplaced. The lawyers offering their services in outsourcing firms will be specialists in the areas in which they do business. Why would a firm only offer drafting services if its lawyers were not experts?
This is in contrast to the services of an all purpose firm for which the drafting, element of their services is just one small part of the package, and often seen as tedious and a necessary evil.
Things to consider
When thinking about whether or not your SME could benefit from this growing trend of legal outsourcing here are a few things you might consider:
Does this need to be done by a local?
Some tasks may be time sensitive, culturally sensitive, or require filing in person such as court documents. If you need your legal representative to do these things for you then perhaps legal outsourcing isn’t right for the task.
However keep in mind the technology of email and skype means that tasks can be done quickly overseas and sent back to you no slower than if it were still in your jurisdictions. Also in terms of cultural sensitivity outsourcing firms will often have had substantial experience dealing in multiple jurisdictions and will bring the level of legal and cultural knowledge you require provided you instruct them adequately.
Who can do this job best?
This question is basically suggesting you examine what the task you are thinking of outsourcing entails, and who you would ordinarily have given the task to.
If you would ordinarily have engaged a local law firm see if an outsourcing firm can offer the service and if they can do it equally or more effectively, they will also most likely do it cheaper.
If you would ordinarily have given the task to a staff member of staff are they the best person for the job, do they have the required expertise, and is this the best use of their time? This is often the case with things such as legal research regarding changes to business structure you might be planning to make, changes to the laws governing your business etc.
What areas am I spending the most in legal fees on? Can these be outsourced?
Things like the drafting of employment contracts, sub-contracts, licence agreements, intellectual property applications, and many other largely drafting based tasks can be outsourced.
Keep in mind legal research can also be outsourced, and this may save you and your employees valuable time as well as giving you higher quality and cheaper information.
Disclaimer: The above information provided by Inveiss Legal Pty Ltd is intended only as a guide. The impact of laws can vary widely based on the specific facts of each case. Further, given the changing nature of laws and the inherent speed of electronic communication, there may be inaccuracies in the above information. As such, this information is provided on the understanding that Inveiss Legal Pty Ltd is not rendering any legal advice or services. The information contained herein is not a substitute for qualified, independent legal advice and the same should be sort prior to engaging in any activity relating to the above subject-matter.
Although we have made every effort to ensure the information has been obtained from reliable sources, Inveiss Legal Pty Ltd is not responsible for any errors or omissions. In no event will Inveiss Legal Pty Ltd, or its directors, agents or employees, be liable for any decision made, or withheld, in reliance of the information contained herein.
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PDF Disclaimer: The above information provided by Inveiss Legal Pty Ltd is intended only as a guide. The impact of laws can vary widely based on the specific facts of each case. Further, given the changing nature of laws and the inherent speed of electronic communication, there may be inaccuracies in the above information. As such, this information is provided on the understanding that Inveiss Legal Pty Ltd is not rendering any legal advice or services. The information contained herein is not a substitute for qualified, independent legal advice and the same should be sort prior to engaging in any activity relating to the above subject-matter.
Although we have made every effort to ensure the information has been obtained from reliable sources, Inveiss Legal Pty Ltd is not responsible for any errors or omissions. In no event will Inveiss Legal Pty Ltd, or its directors, agents or employees, be liable for any decision made, or withheld, in reliance of the information contained herein.
