Through changing economic conditions, one constant remains. Law firms that drive operating efficiencies to reduce costs and improve performance will achieve a considerable edge over the competition. Progressive and aggressive leaders parlay these financial advantages into added marketing firepower, increased operating capital, or greater profits per partner.

Market Overview

The business landscape is changing at an increasingly rapid pace. The economic downturn is causing major changes in ordinary business practices that have affected our industry:

• Insurance carriers are aggressively scrutinizing expenses and are becoming extremely rigid with indemnity payments to their policy holders
• Corporations are balking at increasing legal fees and putting enormous pressure on law firms to cut costs, creating a hyper competitive environment
• Plaintiff’s law firms are seeing increasing challenges in managing cash flow and expenses

As a result, in the legal industry, the demand for solutions that drive immediate and substantial hard cost savings, without adversely impacting client relationships has increased dramatically. By 2015, the addressable demand for legal process outsourcing in the U.S. is expected to be $3 billion. Indian share of this market is estimated at 60%. (This figure does not include non-legal back office or technology functions that law firms are expected to leverage)

Global Sourcing

The utilization of internationally based human resources has become a standard business practice among many industries within the United States and Europe. Pursuant to more than a decade of progressive outsourcing of services in the financial and technological communities, such terms as BPO, back office and call center have become part of our everyday vocabulary. While several aspects of the outsourcing paradigm are subject to discourse and conflicting statistics, the fact that well implemented offshore programs have resulted in tremendous savings for a large number of companies is quite unassailable. As such, the question is no longer whether outsourcing is an effective business tool, but rather how quickly industries will be able to leverage this competitive advantage.Respected analysts who have studied the development of outsourcing as a viable business model agree that the legal field is the next major billion-dollar industry to embrace outsourcing as a candidate model for doing business. In fact, a large number of firms are already assigning tasks such as patent searches, legal research, and document review and document production to offshore units. Analysts at Forrester Research, Inc. and The National Association of Software and Services Companies (NASSCOM) have predicted that the legal outsourcing industry will grow to five hundred times its current size within less than ten years. The catalog of LPO services that are currently being offered is quite extensive and continues to grow on a daily basis. While particular services, such as patent searches and legal research, have been quicker to find a foothold than others, the category of services that may be performed by non-domestic units is very broad.

Why India?

• Vast resource of talented English speaking lawyers
• Like the U.S., it is a common law jurisdiction, with British system roots
• Pay rate between 10 to 15% of that of US legal staff
• 24x7 operation potential for US law firms
• Friendly Government policies for export of information technology and related services
• Outsourcing legal and related support resources can cost organizations 50% to 80% less

The American Bar Association (ABA Formal Op. 08-451) and several regional bar authorities have implicitly authorized legal outsourcing. The clear economic drivers, coupled with the removal of previous barriers have increased the rate of law firm adoption of offshore services.

Today, over 80% of firms’ annual spend is comprised of the following:

• Office operations
• Litigation support
• Word Processing and secretarial
• Information systems

How Law Firms Benefit – A Case Study

There are numerous examples of how different types of law firms that have leveraged offshore capabilities to achieve operational savings and competitive advantage. One such firm is among the largest national plaintiff’s personal injury firms, based in New York City.The firm was expanding at a very rapid pace. The growing case volume was creating administrative efficiency challenges. Financial margins on high frequency, low severity cases were considerably lower than those on larger disputes. The firm was working in a highly competitive business environment and needed to upgrade its technological and operational capabilities in order to maximize its profitability.

The managing partners decided to implement a custom solution that would increase efficiency and cost savings. Leveraging Law Allies capabilities, the law firm took the following steps:

• Upgraded the firm’s case management system with custom components
• Assigned data management responsibilities to Law Allies
• Established offshore back office capabilities for cost-effective processing of cases
• Upgraded phone system capabilities and established a 24/7 contact center for clients and affiliates with multi-lingual capabilities

The project resulted in over $300,000 in bottom line savings, permanently increased firm profit margins and freed up capital that allowed the firm to increase its marketing capabilities. The firm also improved its client satisfaction with case disposition and level responsiveness and continued to grow its client base at a rapid pace.

About Law Allies

Law Allies is the leading market expert on small to mid-size law firm operational performance improvement. We tailor our services directly to client technological and operational preferences and priorities. Our comprehensive solution packages involve minimal or no out-of-pocket costs and drive pronounced and sustained improvements in firm profit margins.

Services

• Intakes and Data Handling
• Legal Research
• Document Production
• Transcription and Secretarial Services
• File and Document Management
• Custom Technology & Data Solutions

Law Allies was founded 2 years ago as a client-centric, solution oriented response to the cost-containment needs of small to mid size litigation firms.Shree Laxman is the President & CEO of Law Allies. Shree is an India born, U.S. educated technology domain expert with considerable law office operational expertise and business and legal process outsourcing experience with multiple organizations. Law Allies includes local U.S. delivery managers and a full service center in Mumbai, India with capabilities to manage technology projects, legal back office support, document management and legal process outsourcing. Today, Shree provides consultative services to the client, including identification of requirements and defining delivery protocols. His team proceeds to execute under his direction, through a collaborative approach.Law Allies’ clients include some of the leading plaintiff and defense litigation firms. Firms leveraging Law Allies’ services have realized dramatic competitive advantage. The Law Allies mission is to provide law firms with operational cost-reduction solutions tailored to their needs through an unparalleled client-centric consultative approach and exceptional caliber service delivery team.

For more information on how your firm can cut costs and increase profits, please visit www.lawallies.com, e-mail us at info@lawallies.com, or call (914) 400-4328.