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Moving Forward with Outsourcing in the New Legal Model

By Robert C. Mattern
April 27, 2012

As anyone who has been working with or in law firms for the past four years will attest, the legal industry as a whole has changed dramatically. This change, while primarily economically based, has impacted the traditional legal model financially, operationally, and even socially. Gone with the wind are the days where clients do not question invoices, every matter is hourly based, all associates eventually make partner and every client will pay 25' per copy. There's a new legal model in town, ushered in by a new era of law firm client ' and both require firms to streamline operations and capture cost efficiencies at every level, while also maintaining the high quality of services on which their reputations are staked. While this change has created hardship for some organizations, it has also created opportunities for firms that have been able to shift their management paradigm to embrace these changes. The old way doesn't work anymore, and not only in the areas of partnership leverage, career track and management structure, but also in the areas of soft cost recovery, back office operations and the use and structure of outsourcing. Just as the traditional legal model has died, so too has the traditional outsourcing model.

In the traditional model of outsourcing, a firm took some internal duties such as copying, mail and facsimile, selected a vendor to manage those services on-site, signed a three- to five-year contract and then charged back to the client for these services under the traditional cost recovery model with pricing that bore little or no connection to the costs the firm was paying for these services. While many firms still employ this model, the end of this model is in sight. With the support services model shifting from a copy/fax to a print/scan/lit support basis and with firms reluctant to charge clients any new costs due to the increased scrutiny under which they operate, firms are faced with a declining revenue stream in this area, which ultimately will make this model obsolete.

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