Why you should consider outsourcing your legal needs

Introduction

If you are like most business owners, you are always looking for ways to save money. Outsourcing your legal needs is a great way for your company to do this. If you want to lear about when to hire an in-house lawyer, click here.

Legal outsourcing is where a law firm provides a business with the same core legal services an in-house lawyer would. When you outsource your legal services, you’re not responsible for the overhead costs associated with hiring an in-house lawyer such as paying for databases for legal research. In addition, outsourcing firms usually charge by the project, so you only pay for the services you need as a client. This can be a much more cost-effective option than hiring an in-house lawyer and all the costs involved with having them as an employee.

By working with an experienced outsourcing partner, such as GZ Legal, you can get the legal support you need at a fraction of the cost of hiring in-house counsel. However, it’s important to choose the right partner and to understand the potential drawbacks of outsourcing before deciding so you can be confident that you’re getting the best possible legal advice.

What is legal outsourcing?

Outsourced legal services also known as legal process outsourcing, are where law firms provide a business with the same services an in-house lawyer would. This is typically done by small and medium-sized businesses that do not want to or cannot afford to hire an in-house lawyer.

Examples of core legal services that companies can outsource include:

Compliance

As businesses are confronted with an increasingly complex legal landscape, the need for compliance and legal services has never been greater. Compliance ensures that your business adheres to the myriad of rules and regulations that govern business practice. By outsourcing these services, businesses can save time and money while receiving the high-quality services they need. This is because outsourced lawyers have a deep understanding of compliance regulations as well as be able to do legal research on these regulations and can put them into practice for the business.

Compliance Policies

The role of in-house counsel also includes creating policies to promote legal compliance within the company. These policies can be related to many different areas, such as anti-corruption, data privacy, or environmental law. By outsourcing this function, businesses can save time and money by having an external lawyer create these policies. In addition, the lawyer can also provide training to employees on these policies so that they are fully aware of the expectations and requirements.

Compliance Policy Management

“Legal operations” is a term that is used to describe the management of the in-house legal department. This includes things like creating databases for legal research, maintaining records of compliance activities, and managing the distribution of compliance policy information to other departments’ employees. This can be time-consuming and expensive to do internally. By outsourcing this function, companies can save time and money as they do not need to start internally employing people to manage “legal operations” and distribute compliance information as they will be done externally by firms like GZ Legal.

Drafting contracts

A core aspect of an in-house lawyer’s practice is drafting contracts. For small businesses, these contracts could be related to multiple practice areas such as employment law and commercial law. A legal process provider would be able to draft these contracts for the business at a lower cost with more access to resources such as legal knowledge management as well as potentially having more experience in these areas than a general in-house council.

The difference between legal process outsourcing and offshoring

Now that we have an understanding of what legal process outsourcing is, it is important to compare it to offshoring.

Offshore legal outsourcing involves legal-support services such as document review being outsourced to lawyers located in other jurisdictions. This could be done for example through digital resources such as zoom calls.

Legal Process outsourcing however focuses on using local lawyers to manage those tasks such as document review and due diligence.

How can outsourcing legal services save your business money?

Lower costs when compared to an In-House Lawyer

While in-house lawyers are often thought of as the cheaper option for businesses, this is not always the case when compared to legal process outsourcing. Not only do businesses need to pay for the in-house lawyer’s salary they also need to pay for an office and their stationary, their national insurance, the lawyer’s overtime and bonuses, their pension fund, software for legal research, electronics such as a work computer to do the legal research on and the recruitment costs. When you factor in these costs when compared to an external law firm providing the same support, more resources are used for the in-house lawyer. By using an external firm such as GZ legal a business can save up to 45% on their legal expenditure.

Lower costs due to not needing to expand the in-house legal department as your company grows

If your company has an in-house legal department, you will need to pay for the expansion of that department if you want to increase your company’s legal capacity. This can be a very costly undertaking. Additionally, you will need to pay for the legal operations management of your in-house department, which can also be quite expensive.

Outsourcing your legal needs to law firms can save you a significant amount of money. law firms are already set up and have the infrastructure in place to handle your legal work. They also have economies of scale that allow them to offer their services at a lower cost than your in-house department could.

Lower overheads – no need to pay for legal databases or legal tech

One of the benefits of legal process outsourcing is that businesses don’t need to pay for databases like Westlaw or other legal research tools. Instead, the law firm that is performing the work for the client already has access to those databases and tools.

This means the business does not need to pay higher overheads for the same legal service.

The Benefits of legal process outsourcing

1. You’ll have access to a team of experts.

When you outsource your legal needs, you’ll have access to a team of experts who can handle all your legal matters in a timely and efficient manner. This way, you can focus on running your business, while leaving the legal aspect of your business to a team of professionals that you do not need to manage or pay for the resources they use to research your issues.

2. The law firm you outsource to will have more knowledge  management in corporate law compared to in-house.

What is knowledge management?

Instead of wading through mounds of documents legal knowledge management helps you find the right document template or legal research guide quickly and easily.

Legal knowledge management is all about creating work products such as document templates, litigation filing templates and legal research guides to make lawyers’ lives more efficient. It’s usually managed in law firms by knowledgeable professionals such as directors of knowledge management.

Why would a law firm have better legal knowledge management than a developing in-house law department?

Due to law firms having a larger amount of staff compared to a legal department, the firm would have a better system implemented for legal knowledge management as well as a larger variety of work products compared to a legal department especially a developing one in a small business.

How does it help the client?

Through outsourcing to an established law firm, the work will more likely be done faster and more efficiently when compared to a legal department which has less access to legal knowledge management resources and would therefore take longer to do things such as file for litigation without the use of litigation filing templates.

How can outsourcing legal services save you time?

Outsourcing these services saves time by having an external lawyer manage the legal operations of the company and create compliance policies.  This saves the company time, as stated previously, instead of needing to expand their in-house legal department and employ people to manage legal operations they can trust the law firm with expertise in corporate law will distribute the policies and manage themselves efficiently.

Flexibility

Law firms can provide you with access to a wider range of legal expertise than your in-house department may have. law firms also have more flexibility when it comes to staffing, so they can quickly adjust to your changing legal needs.

Another way outsourcing is more flexible than in-house is due to in-house being employment-law regulated with longer-term contracts due to them being employees of the company and working full time. This can be compared to firms that outsource their services such as GZ Legal which offer flexible engagement plans and monthly contracts.