Outsourcing research: What to ask when outsourcing library and information services

Gillian Watt on what to consider when outsourcing the firm’s library and information services function

Library and information services (LIS) within UK law firms have evolved in recent years. The function has historically seen its primary role as responding to legal information enquiries for fee-earning lawyers on demand. It has also typically provided a number of other services, including:

• providing current awareness bulletins;'¨

• managing the firm’s physical (paper) information collections – ordering and processing books, loose leafs, journals and materials;'¨

• managing the online resource collections from legal publishers;'¨

• managing the budget for all '¨aspects of information resources;'¨

• training lawyers in the use '¨of online resources; and'¨

• conducting market and '¨company research.

Some law firm librarians have also had responsibility for records management, intranet development, e-learning and training. These services have traditionally been provided in-house, often with most '¨or all of the requirements of each location or office being provided locally.

Other delivery models, however, are becoming increasingly important, with competitive market pressures forcing law firms to cut costs.

1. Partially outsourced model – specific elements of the service are provided by a third-party supplier to the law firm. For example, loose leafing, ad hoc research and training.'¨

2. Insourced model – elements of LIS are provided by staff who are employed directly by the law firm but based in offices offshore, for example in India or Malaysia.'¨

3. Fully outsourced model – the entire LIS function is provided by a third-party supplier. This might be provided by employees of the outsourcing company who are based in the offices of their law firm client. However, it might also be provided remotely from both UK and offshore locations such as India.

In the UK, the outsourcing of law firms’ back office functions, including LIS, has to date largely involved contracts of considerable size.

 

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Benefits of outsourcing information services

• Cost reductions – it can offer long-term cost savings based on the outsourcer’s ability to achieve economies of scale or lower personnel costs.

• Scalability – the outsourced service may be able to grow (or shrink) in line with the law firm’s business needs more easily and quickly than would be possible with purely internal resources.

• Newly-available expertise – the outsourced service may be able to deliver expertise currently unavailable in-house, or where expertise would be costly to source in another way.

• Strategic advice – the outsourcing provider can act as an adviser on key trends and developments in the market.

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Taking stock

Many law firms are finding that the time '¨is right to take a very careful look at how their LIS work currently, and how they need to evolve.

Before planning for the future can start, a good picture of the present operations '¨of the LIS department must be obtained. Key questions that will need to be answered include:

• What exactly are the functions of the department? Are there differing opinions on this?'¨

• How does the department fit into the firm – exactly who does it interact with, and how?'¨

• What statistical data is currently available on the operation of the department (e.g. number of queries answered per week)?'¨

• What additional data relating to the department and its activities needs to be gathered to make rational assessments and plans?'¨

• What do fee earners really think about the current information services, and have they ever been asked in '¨a methodical way?'¨

• Are there parts of the business '¨that ought to be interacting with information services, such as '¨business development?'¨

• What is the total information '¨services budget and how much '¨is being spent on what?'¨

• What information products are currently being purchased and '¨exactly what purposes do these products serve?'¨

• How do information services '¨budget trends compare to other aspects of the firm?'¨

• How does the department’s '¨budget and spend compare to '¨that in comparable law firms?

Planning for the future

The starting point for future planning'¨ will include answering some basic questions, including:

• How well is the current service working, and how does it need to change to come up to industry best-practice standards?'¨

• What is the firm’s strategic plan for the next three years?'¨

• What are the key implications of the firm’s plan for information services?'¨

• How much uncertainty is there is in the firm’s strategic plan? How might it change? How would this affect information services? '¨

• What people and skill sets will be needed and where? Could there be new requirements for information services skills in other parts of the business (for example, in a specific training project to develop e-learning)?'¨

• How easy will it be and how long will it take to recruit the people that are needed in the appropriate geographical locations?'¨

• What opportunities for improvement are becoming available through the use of new remote working technologies?

 

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Choosing an outsourcing provider

• Look closely at the skills and background of the personnel the outsourcer '¨will use to provide you with information services. Do they have the qualifications and experience to do this well? Have they worked in this role in comparable '¨law firms?

• Consider very carefully the type of service level agreement that will to be in place and ensure cost reductions are not achieved at the cost of quality.

• Find out how good the outsourcer’s track record is for meeting its service level agreements with other law firms.

• Find out how strong the outsourcer’s track record is for responding to problems and fixing them.

• If the outsourcer’s strategy (and profits) rely heavily on offshoring, ensure '¨that this will involve people who have the correct skills, training and familiarity with your local environment, coupled with a knowledge and understanding of your business.

• Find out about the strategic plans of the outsourcing company and whether these will impact upon your firm in the long term.

• Ensure there is a regular, methodical and independent process to monitor how well the outsourcing is working.

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Need for change

Across the market, new pressures on law firms are creating a strain on existing support resources. These include:

1. an unprecedented demand to change and adapt to a rapidly-shifting market;'¨'¨'¨'¨'¨'¨

2. an increased need to reduce costs;'¨

3. increased competition for client work;'¨

4. greater pressure to improve profitability; and'¨'¨'¨

5. a shift toward alternative fee structures.

The option to outsource the LIS function '¨may prove to be a winning ticket, if managed correctly.

 

gillian.watt@isential.co.uk