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Law firm feasibilty study v0_030616

Feasability whether to do some of your departmental work inhouse or outsource

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Law firm feasibilty study v0_030616

  1. 1. June,2016 Law Firm feasibility study
  2. 2. - 1 - Table of Contents 1 2 Overview Major trends 4 Law Firm Feasibility 6 3 Looking Forward
  3. 3. - 2 - Research 1. Business Research 2. Web News/Content 3. others Strategic initiatives 1. Competitor Intelligence 2. Strategy Research 3. Competitive pricing 1. Need for Study – Overview Source : To explore new opportunities whether to do it in-house or Outsource. we need to have an overview of all the departments, which includes various activities under separate department Business Development 1. Marketing 2. CRM 3. Marketing Collateral 4. others
  4. 4. - 3 - 2. Major trends and Stats… Source : LexixsNexis Some of the major trends and stats of all the law firms in the World Trends New client acquisition costs more New Client Retention is more profitable Clients buy from firms they already know Buyer’s market Market share won, is not market share retained Risk of client attrition Client satisfaction is all time low
  5. 5. - 4 - 3. Looking Forward… We have to divide the entire processes into 5 phases which will help us to consolidate the department and help us understand whether, everything is working out well for us or not Assess Feasibility Design Build and Test Implement and rollout Optimize Key activities • Developing the vision –which means defining how process could be split in between in house and outsourcing • Define the technology to be used,assess possible location and agree on the most appropriate solution • Setting out Financial and non financial benefits ,helps in decidind a go or no go decision Once decided to outsoucer ,we'll have to look at the designing process • Detailed picture of how a future process would be – who will do what ,where they will do it and how This is the phase where everything comes together • This process will show the close integration and process design ,the technology that support the entire enterprise Go Live – This process will decide whether everything works well for you or not • Helps in identtifying ,whether the solution works for you or not ,or you want something more Outsourcing is not the end of the journey • We optimize our process at regular intervals for further improvemnets to derive high level of services and cost efficiency Phases 1 2 3 4 5
  6. 6. - 5 - 4. Law firm Feasibility - Whats Happening? (1/6) Source : Williams Lea Today Most of the Law firms are adopting Business practices from other Industry segments and experts as the laws of economics apply equally to law firms as to other businesses Change the Governance model Productize the offerings Don’t guess Forecast Compensate for retention and profit Measure client satisfaction regularly Leadership and Management training Embrace strategic pricing Reduce the cost of goods sold Reduce Inefficiencies 1 2 3 4 5 6 7 8 9 10 Invest in knowledge management Here, Most of the Firms practices it to develop in-house and after sometime to increase the efficiency we need to keep thinking to improve and which can be done via outsourcing some of the practices which they have outsourced so far is like to reduce inefficiencies ,strategic pricing ,product offerings and many more
  7. 7. - 6 - Centralized back office Overview of Various law firm and why they want to outsource (2/6) Source : Williams Lea As per Williams Lea, Global Legal Outsourcing is worth $8.5 Billion and 2014 was the year when most of the law firms crossed the Rubicon when it came to expanding the types and activities of back office support and administrative functions they undertook through utilization of outsourced services Why Firms are looking to Outsource ? • Pressure from clients to reduce cost and the need to show clients progress are the prime reasons for outsourcing • In addition clients remain most concerned about whether firms are sufficiently emphasizing data security and data protection measures • Management of process and workflow reengineering also are of primary interest to firms with 64% citing it as a “top need" • Centralization is also the key enabler for outsourcing • Prioritization of workflow processes improvements and related technology investments • Some of the firms are using client best practices and are looking to gain better command of resources and processes through centralization. • Proliferation of new entrants in the market is also a challenge • Labour cost differention which cost uo to 80% less then the US and the UK firms for Ex in India ,Phillipnes • In India Well Qualified Attorneys from US and UK qualification are available • Most of the outsourcing companies work 24/7 Persistent Cost pressure 2009 2013 92% 83% 1 40% Centralized Mixed and Local 27% Global Locations 6% Technology Improves process 56% Technology increases the amount of savings Centralization is the key2 3 Investment in Technology 32% Cyber Security & Data Protection 24% Growing Expenses4 Cost Saving 77% Efficient service 65% Improvement of Process and procedures 60% Benefits of outsourcing5
  8. 8. - 7 - Overcapacity of staff members has effected the profitability of various firms globally that’s why these firms are moving towards outsourcing Law firm Feasability study (3/6) Source : Altman Survey 2015 As per the survey done by Altman , they have provided some of the interesting facts of the legal world ,wherein the competition is going to get tougher with the introduction of outsourcing and contract lawyers in the market Demand of Services has increased 32.1% 11.0% 8.1% 22.1% 25.3% 1.3% Demand is already at or above prerecession Will return in 2015 Will return in 2016 Will return in the next 3 to 5 years Not in the foreseeable future Never Overcapacity effecting profitability 60.6% 34.1% 5.3% Yes No Don’t know Employee Comparison by firm size 61.1% 56.3% 44.4% 24.7% 10.8% 4.9% 18.1% Using part-time lawyers Using contract lawyers Using staff lawyers Outsourcing non-lawyer functions Creating a low-cost service center for… Outsourcing legal work None Alternative staffing strategies Demand of services has already been increased and has not been effected so far Larger the size of the firms increase in the volume of part time ,contract employees Some of the larger and smaller firms has already adopted outsourcing which is considered as the necessary tool for savings 1 2 3 4
  9. 9. - 8 - Law firm Feasibility study (4/6) Source : Altman Survey 2015 Today Law firms are adopting Business practices from other Industry segments and experts as the laws of economics apply equally to law firms as to other businesses Outsourcing looks permanent 52.3% 50.7% 46.4% 45.5% 41.1% 2015 2014 2013 2012 2011 Legal trends 94.40% 92.60% 84.30% 52.30% 73.10% 72.40% 44.80% More price competition Focus on improved practice… echnology replacing human… Outsourcing legal work More part-time lawyers More contract lawyers lowdown in growth of profits… Temporary Not sure Permanent Some of the permanent trends present in the industry without which industries couldn’t compete in the long run Outsourcing has been considered as the permanent trend due to which everyone has accepted and it has been increasingly adopted by everyone in the industry 65 As per the Current survey done by Altman, it seems outsourcing is the key to the future for various firms across the Globe. To remain competitive and futuristic firms are adopting to remain efficient and effective in every field whether Business development ,research ,content development etc
  10. 10. - 9 - Law firm Feasability study (5/6) Source : Williams Lea Law firms on average firms spent 3.4 percent of their annual collected fees on marketing and business development activities in 2013 -- up from a previous level of only 2.3 percent in 2012 Benefits of Outsourcing Key Benefits of outsourcing • An improved focus on core competencies and creates the culture of Innovation • Outsourcing business development is the only practical answer to increasing growth while maintaining or decreasing costs • Reduced overhead. By engaging a marketing outsourcing firm, businesses can avoid or reduce the cost of additional office space, computers, vendor relationships and access to credit required when marketing projects are handled in-house • Outsourcing business development can work several ways, all of which will prove to be more efficient in generating new business than if you were to do it in-house. • Continuity & Risk Management - Outsourcing will provide a level of continuity to the company while reducing the risk that an inadequate level of operation would bring to the company’s growth. • It helps in fully capitalize on the benefits, and fully integrate the efficiencies, of marketing outsourcing. • Access to an expanded talent pool. In-house marketing staff may not always have the skills needed, especially on larger, more complex projects Key services provided
  11. 11. - 10 - Law firm Feasibility Study (6/6) Cost Incurred Position Per /Hour Salary in USA(if Done in- house) Per /Hour Salary in India (if outsourced) Benefits 1 Business Development executive $ 18 Per Hour $3 Per Hour Saving 6 times cost 2 Business Intelligence database like Hoovers $10 K per Month depends upon the user Here the cost of database is 40-60% less due to mass usage If Outsourced company don’t need to spend more 3 Software License fees $5-10 K Depends upon the user Here the cost of database is 30-60% less due to mass usage Hence cost will remain 1/3rd to the firm 4 Legal Assistant $13 Per hour N/a All Savings 5 Admin Assistant $12-17 per Hour N/a All Savings 6. Para legal assistants $17-23 per hour $5-10 Per hour Hence you will save 1/3rd of the cost of the firm Few of the cost points wherein outsourcing is very effective to save millions of dollars and to remain competitive and efficient player in the market Outsourcing key Domain like Contract management ,Research and some of the Business development activities could be useful to save millions of Dollars. But, some of the activities like Strategic pricing ,creating value for your brand could be some of the challenges which needs to be done in-house. Hence ,it also depends upon firm-to-firm to decide upon these factors