Why In-House Legal Departments Must Begin Using Legal Outsourcing

by | Jun 13, 2022 | Insights


Calling all general counsels! This article is for you: Ever wondered how to manage the heavy workload, and satisfy executives and investors while not spending every waking minute on work?

The answer is (among others) – to begin outsourcing components of your workload. The reason is to reduce expenses while improving efficiency. A win-win solution.
Legal outsourcing has become a primary offering of Alternative Legal Service Provider companies (ALSP), and the time has come for general counsels to understand how ALSPs have changed the delivery of legal services.

First and foremost, the most compelling reason to utilize a Legal Process Outsourcing company (LPO) is for the cost savings. As you read this, consider your daily, weekly, and monthly, tasks; what are the most time intensive and inefficient tasks you regularly encounter?

These types of tasks are often the best type to outsource because they are repetitive (whether complex or not these tasks have a formula/routine) and they reduce the efficiency of the general counsel’s office.
When the efficiency of the general counsel’s office is reduced, it can lead to lawyer burnout, increased lawyer turnover, increased lawyer sick days, and less time spent on more profitable and complex legal matters (which may have to be handled by external counsel or by hiring additional in-house counsels).
Therefore, the connection between soft cost savings and engaging an LPO company are not always apparent when conducting an itemized tabulation of the general counsel’s office expenses. However, by visualizing how the in-house legal department’s workload impacts employee well-being, the value of using an LPO company becomes more apparent.

Similarly, LPO companies can also reduce hard costs. Hard costs are those that are directly attributable to an employee or department. For example, hiring more lawyers for the in-house legal department is always an option but it brings along higher costs. Such as employee benefits, bonuses, and related fixed overhead costs associated with adding a new employee. Another hard costs savings that an LPO company offers is providing the same, or similar, services that an external traditional law firm offers at cheaper rates.

In other words, simple math will demonstrate the price point savings between using a traditional law firm and using an LPO company. But how do I ensure that the LPO company can deliver the same work quality as a traditional law firm? The risk of engaging an LPO company is reduced by the in-house legal department doing their due diligence before hiring them.

Consider if the LPO meets the following criteria: experience in the substantive practice area (regulatory compliance, employment law litigation, etc.); experience in completing the anticipated task (drafting legal briefs, reviewing contracts, analyzing due diligence documents, etc.); an established track record of success; transparent pricing and process explanation; and a detailed process for relationship management (weekly check-ins, virtual meetings, the revision process, etc.), to name a few.

Second, LPO companies can significantly improve the efficiency of a general counsel’s office. The in-house legal department faces many challenges and is always expected to complete more work, despite having less than ideal resources.
For example, let’s assume your company is fairly new and does not have a large in-house legal department. Your company is in active litigation after terminating a senior manager, the sales department has just sent over numerous contracts for review, and your company is actively being investigated by a regulatory agency over non-compliance with regulations that carry expensive fines.
The general counsel’s office faces a few options: hire more lawyers for the department (but the on-boarding process is slow); work long hours (face burnout and stress that reduces the quality of your work); or retain external counsel that is expensive and takes up more of your time by their questions and requests for documents, etc.

The perfect solution is to outsource some of those repetitive tasks to an LPO company, gathering all litigation materials (emails, contracts, witness statements, etc.), preparing draft responses to the regulatory agency’s inquiry, and reviewing the sales department contracts for typical problems. Engaging an LPO company rapidly expands the in-house legal department’s capabilities without the additional overhead, and it gives general counsels the freedom to focus on the most pressing assignments.

To recap, in-house legal departments must begin using LPO companies to do more with less. As the demands of general counsels grow, sustainable solutions must be implemented to permit continued success.
A time-tested strategy to be recognized as an outstanding in-house counsel is to reduce costs while increasing efficiency. Engaging an LPO company can provide both hard and soft costs savings. LPO companies permit general counsels to work on more complex assignments, avoid stress and burnout, and ultimately manage the growing demands of being an in-house counsel.
To begin experiencing the benefits discussed above, contact LawFlex to receive the help of elite lawyers, at a fraction of the traditional costs.