Making Change -
The challenges of outsourcing
in professional services firms
Deborah Kops, Chief Marketing Officer
WNS Global Services
When a company's intrinsic value rests on the ability to accommodation of personal preferences is often directly
attract, satisfy and retain very smart people whose proportionate to the revenue generating skills of the
“production” is intellect, outsourcing presents a very individual partner or director. Further, despite the
special change challenge. Because law firms', recognition that “change is good,” the attitude of senior
accountancies' and consultancies' core assets consist of staff toward outsourcing may be “do as I say, not as I do.”
the intellectual prowess of their people, unlike companies
who produce products or deliver standard services, This challenge may be further exacerbated in certain types
individual approaches and behaviors celebrated and of professional services firms, such as law firms and
accommodated. closely held boutique consultancies. Where individualism
and the appreciation of intellectual prowess is high, a
As a result, outsourcing flies in the face of traditional corresponding understanding of the efficacy of and trends
professional services firms' ways of working. When in business models and management trends may be low.
accounts receivable processes are consolidated, As a result, so the approach to business model evolution
standardized and sent offshore, Partner X can no longer as may be exceptionally conservative.
easily cajole an accounting clerk to help him with his WIP
report. And when more complex knowledge processes, What are some of the specific challenges professional
such as business research, financial analysis or proposal services firms can expect to face when implementing
support move to a third party, the implementation of rules outsourcing?
around such elements as cost, quality, and response time
means that the teams must work in a more structured Reluctance to drive change from the top of the
manner. Fundamentally, outsourcing changes the business house down.
process components of the professional services business When top management consists of long-tenured senior
model from custom to shared service, from individual partners who made their way up the ranks of a
attention to standardization and harmonization. partnership, aggressive change sponsorship may be seen
as fraught with risk. Formerly “one or more of the boys,”
Outsourcing is now being evaluated in response to
often management see themselves as first amongst equals;
globalization, recessionary factors and rising costs which
the willingness to take a stance that runs against the
are putting pressure on partner income. In order to sustain
sentiment of the partnership becomes a personal dilemma.
income levels, firm management are actively looking at
every aspect of support from information technology to But CEOs who do not come through the ranks, but rather
finance and accounting, human resources, training and were brought in to make management more professional,
knowledge processes. When the business case for change have their own change challenges. Since their ability to
can be made, the larger challenge change ways of working lead is often subject to partnership approbation, the
in very traditional organizations where tolerance for energy with which they pursue outsourcing may fluctuate.
individual behaviors is given a wide berth and the
Copyright © 2009 WNS Global Services | wns.com 01

Making Change -
The challenges of outsourcing in
professional services firms
It is not uncommon to find professional management Concerns about the protection of intellectual
pushing to implement an outsourcing model, with property and client data.
resistance coming from the very partners or directors who
Since intellectual property and client data are key assets
demanded a change in the first place. Only when the
of the professional services firm, determining up front
conviction to outsource is shared by both top management
what can be outsourced from a regulatory standpoint, and
and key stakeholders will transition to a new model be
what should be retained in house is critical to outsourcing
successful.
success. Often, firms do not have crystal clear agreements
about data retention with their clients, or the protocols
Challenges from the second tier of professionals.
have not been updated to reflect new business models
Senior associates who have partnership or directorship incorporating partnership with third parties.
within their sights present a special change challenge.
This tier have been pushing hard to climb up the ladder, The right approach is to investigate the implications of
then suddenly the trappings of support change. The model data retention at the early stages of the outsourcing
may no longer sustain personal executive assistants or journey as a key driver of scope. In some cases, contracts
research staff. Often, a type of “guerilla warfare” as a with clients can be amended to allow for third party
result of perceived “taking” breaks out. access; in any event, the client should require a full range
of data privacy controls and governance for staff utilization
It is imperative that executive sponsors consistently and in the contract.
comprehensively communicate the change, demanding
that all levels comply, especially partners and directors Tendency to accommodate individual preferences.
who may have a tendency to believe the change does not
When the outsource scope includes knowledge processes
pertain to them. And smart outsourcers develop and
such as research, pitch books and presentations, there are
implement internal campaigns with email mailers,
often challenges when it comes to issues of style, grammar
messages from senior management, and suggestion
and word usage. While the firm may want to standardize
boxes/focus groups to encourage change management.
design templates, content outlines and usage to develop a
common look and feel, individuals may refuse to adapt.
Unforgiving margins for error.
Since outsourcing represents a change in ways of working, The best approach is to develop and obtain sign off on a
skepticism generally runs high. As a result, clients are common or “firm” approach, with detailed templates and
often unwilling to accept the smallest error from the style guidelines, and allow the outsource partner to push
outsourcer, even during the initial transition. Mistakes that back when asked to deviate, establishing an escalation
would get a passing glance in a vertical model are mechanism to the client sponsor.
suddenly magnified. Being able to “pounce” on mistakes
gives voice to the belief that outsourcing is not viable or The business imperative for professional services firms to
dependable. As a corollary, little recognition may be given move to an outsourced model for a range of functions from
when processes are executed well. back office (IT, finance and accounting, human resources)
is clear. Leveraging alternative business models to
Smart implementation calls for the communication of the increase efficiency, standardize processes, and reduce or
fact that errors will occur, especially during the build control costs is an imperative as a result of increasing
phase, and that executive management is aware and will competition, the economy and threats to the traditional
tolerate a certain percentage of rework and mistakes. It is provision of professional services. Although particular
also important for the outsourcer to understand the challenges abound, especially in light of the fact that
criticality of seemingly minor mistakes to the client base, people and reputation, not processes or technology,
and develop response mechanisms appropriate to the comprise the core of the company asset, early
nature of the client. acknowledgement of challenges can drive a response
model that supports successful implementation of
outsourcing.
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