Technology makes it easier to operate back-office functions of law firms. But it also makes it more complicated for legal process outsourcing companies to manage various business applications used to collect crucial data.
Once a law firm becomes accustomed to a specific system or application, it’s not easy to get users to switch to the latest and greatest technology no matter how much better the new system is.
Lawyers and support staff grow comfortable and attached to systems. Getting them to change requires the existence of a clear pain point, said Brenda Barnes, CEO of B2 Management & Consulting LLC, the Texas-based accounting outsourcer.
“They have to be so extremely frustrated to let go of their routines and make recommended changes to increase efficiencies,” she said.
B2 Management, which specializes in back-office functions of firms with two to 25 attorneys, recommends fully integrated software systems. In other words, technology that enables the collection of time entry and billing data coupled with accounting and general ledger information that’s flexible enough to work with third-party applications.
Practical easy-to-use dashboards are useful when reporting and tracking accounting and billing, Barnes said.
However, B2 Management also integrates whatever apps or information technology systems clients already have in place. For example, clients commonly use the popular mobile app developed by California-based Expensify Inc. or Chrome River to track expenses, she said.
Law firms have plenty of options when selecting back-office software. The choices require legal process outsourcing, or LPO, companies to accommodate technology clients have selected and aggregate all the important data in a single place to generate accurate reports.
Frequently used billing and accounting tech tools include Coyote Analytics, TABS3, and of course QuickBooks. In case management software, there are options such as Clio, Docuware, MersusCase and Firm Manager. Software for document management includes NetDocuments, Worldox and iManage, according to a 2016 report by AttorneyAtWork.com.
In November, Switzerland-based Swiss Post Solutions Inc. reported that demand for LPO has expanded beyond the largest law firms to smaller firms. Mailroom and messenger services account for the most frequently outsourced functions, used by more than 82 percent of the surveyed firms. Records management and receptionist services were tapped by 32 percent of law firms that participated in the survey.
Customer service appears to be the main motivation for outsourcing, Swiss Post North America Chief Operating Officer Art Tatge said.
“Among the many benefits of outsourcing, we are seeing more firms looking beyond the goal of cost cutting,” he said. “To stay competitive, law firms are taking steps to improve the customer service experiences of their own clients.
Of course, LPO is intended to enable law firms to concentrate on their core business while outsourcing the remaining everyday, back-office work. Analysts agree the market is growing, but estimates of the global market’s size vary wildly.
The LPO market is projected to generate revenue of $27.19 billion within seven years, by 2024, according to an April report by Texas-based Grand View Research Inc.
By contrast, Delaware-based Global Market Insights Inc. projects the market to rise to $40 billion by 2024, according to a May report.
Dominant vendors include: Washington, D.C.-based Clutch Group LLC, India-based Infosys Ltd. and New York-based Integreon Inc., according to Orbis Research.
Countries such as India, South Africa, and the Philippines are popular LPO destinations because the time differences enable U.S. and European firms to operate with a continuous workforce while reducing costs, Grand View reported.
In 2010, OutsourcePortfolio.com reported that the American Bar Association and various state bar associations had attempted to address the ethical implications of LPO firms. They mostly focused on five areas of concern:
- Conflicts of interest
- Confidentiality issues
- Unauthorized practice of law
- Disclosure to clients
- Billing practices
Nearly 67 percent of surveyed law firms said cost savings were an important factor in selecting an LPO firm. Fifty percent reported that outsourcing was done to access continuous improvements and process innovation, the Swiss Post survey found.
Legal billable hours now average $408 and technology can enable firms to reduce costs that come with attorneys spending time on administrative, back-office tasks, B2’s Barnes said.
Her firm is introducing a cloud-based platform called Plug and Practice designed to enable law firms to acquire services like billing, accounting, human resources, payroll, recruiting, time and billing, and insurance without hiring an inordinate number of additional workers, she said.
“I think what we are doing is leveraging our processes with technology to create an almost burden-free system for lawyers,” Barnes said. “The responsibility to manage the business side of their work still exists, but the pressure to deal with that is gone and their focus on legal work improves, and their level of services goes up. These are progressive attorneys, not the traditional lawyer of the past.”