Insourcing or Outsourcing of Legal Technology: which One is Right for Your Firm?

The advances of technology have been such that they have had an impact upon virtually every sector of society. However, while it is exciting to explore the new innovations in business that flood the market on what seems like a daily basis, business professionals must exercise restraint in the manner in which they react to and utilize the technological options being made available to them. This is important because, while these new options may seem attractive, they may not be the right fit for that particular entity.

The same can be said of legal professionals and the innovations in legal technology. While these new technology-driven options do possess some inherent value, it may or may not be suitable for every law firm. As such, it is necessary to evaluate the pros and the cons before implanting them.

One such trend related to the advance of technology in the legal industry is the employment of outsourcing as a staffing option. Many law firms have indicated that they have found outsourcing to be a desirable option for them. However, each firm first needs to weigh its options before deciding to engage in the outsourcing of legal tasks. Below is a list of factors to consider before making that important decision of whether or not to outsource.

Cost

When considering whether to outsource or insource legal services, firms need to consider which option will prove to be more cost-effective for them. In doing this, law firms need to bear in mind factors such as their size and the volume of services to be outsourced. They will also need to take into account whether or not they could use the available manpower that they already have to perform the tasks that they would have outsourced. As such, it would be more advisable for smaller firms with a lighter workload to engage in insourcing, as this would be much more affordable.

Outsourcing may prove more cost-effective for larger firms, however. This is so as the outsourcing of tasks would mean that these firms can hire less people, thereby reducing their payroll expenditure. Additionally, outsourcing would also reduce the cost of securing technological equipment needed to perform the tasks, and would reduce the amount of office space needed. Finally, if outsourcing is done overseas, then firms may find that cheaper labor costs in other countries could also lead to a significant reduction in costs.

Security

Security is another issue to consider when deciding between both options. The nature of information handled in the legal industry is oftentimes very sensitive. As such, firms have to assess which option best protects their interest and the interests of their clients. When a company outsources tasks, there is a greater likelihood of having a breach in security or leak of information, as it is much harder to create a controlled environment outside of one’s own operation. As such, the level of sensitivity of information handled should be carefully considered and should carry much weight in the decision making process.

Quality of Human Resources

Outsourcing has a unique advantage in that it provides firms with the opportunity to utilize the services of trained experts without having to train them themselves. This is a great benefit, especially for smaller firms. However, in considering this factor firms also need to consider whether or not they already employ personnel who possess the skills for which they are outsourcing. If there is already someone who can get the job done, then outsourcing, for this reason, would prove to be redundant.

Time                            

Outsourcing is thought to be a much more efficient option than insourcing. This idea comes from the fact that persons employed to these service providers are focused solely on the tasks they perform. As such, they tend to get the job done much more quickly. However, for firms that regularly handle cases that may require the performance of services ‘at the last minute’ insourcing may be more efficient.

Other factors that law firms need to consider when trying to determine which option is best for them include the ability to control processes, access to technology and how much revision of outsourced work will need to be done in-house once the work is completed.