How to make outsourcing work for small firms

By Paul Bernard

Clients want more for less, and outsourcing substantive legal work can be one effective and profitable way to give it to them. Although many associate the idea of outsourcing exclusively with the review of millions of documents through e-discovery or with brief writing by lawyers in India, changes in the economics of law practice have made outsourcing a viable alternative for many different kinds of projects for law firms of any size, and the outsourced work can often be done close to home. By expanding the range of specialized services that can be offered to the client at cost-effective prices, outsourcing increasingly provides a way to improve or expand client relationships, while permitting attorneys and firms to focus on what they do best.

Outsourcing is nothing more than the delegation of a discrete task to a qualified professional with applicable, specialized abilities. Increasing numbers of highly skilled and experienced lawyers and paralegals are available to take on outsourced work, especially since law firms started reducing their full-time staffing after the economic downturn of 2008. Many of these professionals run their own businesses, and others can be hired through legal staffing agencies. In states like Michigan, where the recession hit hardest, there are substantial numbers of such lawyers and paralegals available.

There is no minimum size for an outsourced project, and outsourcing is a way to maximize efficiency. A “virtual paralegal” can quickly provide an analysis of a married couple’s financial information for a divorce case. One or two contract attorneys can scan and index a document production of a few thousand pages in a couple of days. An experienced brief writer can prepare a summary disposition brief in a day or two. And all of the outsourced work will cost the client less than the attorney’s regular rates, and the attorney’s careful supervision assures that all of the work product will meet his or her standards. Thus, by delegating in this fashion, an attorney can lower the client’s bottom line cost, while having the opportunity to maximize the return on the things that he or she does best.

With larger and faster transmission capacities, and with innovations such as cloud computing, the internet makes outsourcing easier than ever. Sending a large volume of documents or a substantial amount of data to a outsourced professional can be accomplished quickly and at little or no added cost. In addition, through cloud computing applications, an assigning attorney and the outsourced professional can share documents or data in real time; and adequate security measures are available to assure that this kind of document and data sharing will preserve confidentiality. For modest sized projects, this is even possible with free applications such as Dropbox.

Of course, like everything else a lawyer does, outsourcing must be done in accordance with the highest ethical standards. ABA Formal Opinion 8-451 (August 2008) provides that it is ethical for a lawyer to outsource work to lawyers and non-lawyers as appropriate to serve the client’s interests, as long as certain conditions are met. According to these conditions: (1) the fee for the outsourced work must be reasonable; (2) the client must be informed about the outsourcing and, where possible, must consent to it; (3) the attorney must closely supervise the outsourced work to assure that standards of competence and quality are met; and (4) the outsourcing must not, in any way, involve the unauthorized practice of law. The opinion also cautions that attorneys cannot “mark up” the cost of outsourced work, although they can add charges for their own overhead to the fees charged by the outsourced professional.

In the end, outsourcing can be a way that attorneys in all kinds of practice can focus their efforts on the things that bring the most value to their clients. Outsourcing also allows them to minimize the time they spend on tasks they don’t enjoy or don’t do as well. Outsourcing also provides a way to handle the occasional short-term overflow of work. In a real and valuable sense, outsourcing can provide a solo practitioner or a small firm with the virtual resources associated with large-firm practice.
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Paul Bernard has nearly twenty years of experience as an appellate litigator and brief-writing specialist, having written case-winning briefs at all levels of the state and federal courts, including the United States Supreme Court. He is the principal of Cyrano Legal Writing Solutions LLC in Ann Arbor which provides legal research and writing services to lawyers and law firms. Bernard is a graduate of Brown University and the University of Michigan Law School, and he served as a law clerk for U.S. Court of Appeals Judge  Richard D. Cudahy, Seventh Circuit.