Law firms to bolster profits through outsourcing

Finance directors from 26 of the UK's top law firms would consider outsourcing more of their operations to boost profits, a new survey has revealed.

Just over half of respondents to the latest Thomson Reuters poll responded in the affirmative, up from 46 per cent in 2014.

Outsourcing back office support services such as administration and IT have been the main focus of firms to date, but the survey findings suggest over a third of respondents would consider outsourcing the drafting and review of legal documents as well.

In addition, more than a quarter would consider relinquishing control of regulatory and legal research functions, while one in six would ponder outsourcing their litigation support roles.

The financial directors surveyed highlighted the benefits of outsourcing were a reduction in service delivery costs and greater flexibility to scale services to meet demand.

Improved quality of service, and freeing up time to focus on core business, also scored highly.

The biggest concerns from respondents were of a loss of control over service delivery and cost savings not being delivered. Reputational damage was also flagged as an important issue.

As the UK's largest firms begin outsourcing higher quality work, such as document preparation, research, and litigation support, Samantha Steer, head of large law strategy at Thomson Reuters UK, said the advantages of the practice are starting to outweigh the risks.

'As activity in the legal market picks up, law firms are increasingly recognising the benefits of outsourcing to bolster profitability, but they are not simply looking for costs savings alone,' she added.

'They also see outsourcing as a means to enable them to scale their operations in a more flexible manner, allow them to focus on critical core business areas and enhance service quality.'

Matthew Rogers is an editorial assistant at Solicitors Journalmatthew.rogers@solicitorsjournal.co.uk | @sportslawmatt