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Top Ten Reasons Why Law Firms Should Consider Selective Legal Outsourcing

In the last quarter of 2008 America faces economic challenges never imagined even a few months ago. How will businesses manage and survive the limitations on credit, demand and growth? How does the economic downturn impact lawyers and law firms which service the business community?

It is an obvious fact that businesses can only look at modifying two revenue streams, income and expenses, in order to increase profitability. If income is down and not expected to increase markedly in the near term, clients of law firms will take the hatchet to expenses in order to survive. Legal fees will be under extreme scrutiny. Legal outsourcing, while still a nascent industry, is gaining momentum, being considered in more corporate boardrooms. As the pressures to outsource build, lawyers ponder whether they should embrace outsourcing legal work offshore or resist it. In the face of global economic challenges coupled with the increasing loss of American jobs why would a U.S. law firm want to even consider legal outsourcing? Are there valid reasons why targeted legal outsourcing should be considered by every U.S. law firm?

Several weeks ago I received an email from a lawyer who was considering outsourcing some of the legal work of his law firm. Facing resistance and challenges from many in his law firm who wanted to maintain the status quo, he asked for my advice as to what he should tell his partners. Why should the firm outsource legal work offshore, a practice seen by some as adventuresome and risky, instead of staying the course, doing it “the way we have always done it.” I answered him with the top ten reasons why every law firm should consider selective legal outsourcing:

1. PRUDENT, TARGETED OUTSOURCING WILL RESULT IN REDUCED LAW FIRM OVERHEAD

Outsourcing some legal work to qualified providers in India will result in significantly lower overhead to the outsourcing law firm. In assessing the comparative costs the law firm will be wise to carefully calculate the real costs of employing one lawyer or paralegal. Those costs include salary and bonus, health insurance, vacation and holiday pay, sick time expense, FICA, office space and equipment for the lawyer, paralegal and secretarial staff assigned to that lawyer, pension and profit sharing, auto and parking expense, CLE seminar costs, and other employment benefits such as disability and life insurance. The real annual cost of one lawyer earning a base annual salary of $150,000-$175,000 is more likely in the range of $250,000 to $300,000 per year. NONE of these customary expenses accrue to a law firm utilizing supplemental offshore legal providers.

2. OUTSOURCING WILL ENHANCE LAW FIRM EFFICIENCIES

Selective outsourcing will improve the efficiency of your law firm. Because Indian lawyers work while American lawyers sleep, it will be like your law firm has a full time, fully staffed night shift. Some work can be assigned by a partner at 6 p.m. in the evening and the completed task on his desk when he arrives at the office the next morning. Litigation cases will move more rapidly through the court system with less need for extensions of time.

3. OUTSOURCING WILL RESULT IN IMPROVED LAWYER MORALE

As a child not many of the sermons I heard from my pastor stuck with me. But one, when I was fourteen years of age still rings a bell. He said: “Ninety percent of any worthwhile endeavor is pack work, plugging, day in and day out. Only ten percent of our work tasks are necessarily fun and enjoyable.” I have always remembered that statement. In more than two decades as a trial lawyer I enjoyed strategizing and trying cases to juries. But I did not necessarily enjoy all of the trial and deposition preparation, research and briefing, document review, and other mundane essentials of the practice of law. A law firm which incorporates outsourcing into its practice will inevitably foster more contented lawyers who devote their time and energies to the more challenging, fun and rewarding parts of the practice of law. Only the “chore” legal work is outsourced with the “core” work staying onshore. This allows more time for client interaction and development by the firm’s lawyers.

4. OUTSOURCING WILL RESULT IN OVERALL SAVINGS IN LEGAL FEES TO CLIENTS

Clients of law firms, particularly business clients, are searching far and wide for ways to cut their legal expenses. Many ask why they should pay, for example, $200 to $300 hourly for document review. Gone are the days when legal bills are simply paid without scrutiny. Likewise, the annual increases in hourly rates will not be well received by clients looking to cut costs. Wise law firms put the interests of their clients above their own. What is good for the client will ultimately be good for the law firm itself.

5. THE RULES OF PROFESSIONAL CONDUCT REQUIRE OUTSOURCING CONSIDERATION

The Rules of Professional Conduct of require that: a. “A lawyer should seek to achieve the lawful objectives of a client through reasonable permissible means.” (Rule 1.2) b. “A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions about the representation.” (Rule 1.4 b) c. “A lawyer shall make reasonable efforts to expedite litigation consistent with the interests of the client.” (Rule 3.2)

A lawyer is required to explore and discuss with his client all reasonable means of accomplishing the client’s objectives. A lawyer is not permitted to charge an unreasonable or excessive fee. It would seem that a lawyer is arguably required to discuss selective outsourcing as a way of reducing the client’s ultimate fee obligation and furthering the interests of the client.

6. OUTSOURCING “CHORE” LEGAL WORK PROMOTES CLIENT RETENTION AND DEVELOPMENT

Clients have long questioned ever-increasing legal fees for basic, “chore” legal work. However, they felt as if they had no alternative. They needed the legal representation and wanted good quality work. As there was not a significant degree of fee variance from law firm to law firm, clients tended to “stay put.” This trend is beginning to change as clients learn that they have options. Lawyers who outsource selectively are reporting a more contented, loyal client base. Clients who perceive that their lawyers are looking out for the entirety of the their interests, including fee costs, tend to remain committed to their existing law firms and even refer other clients (whose lawyers refuse to outsource).

7. THE COMPETITION IS OUTSOURCING

If your law firm is not outsourcing, be certain that your competition is. On August 21, 2007 Bloomberg. com reported that even long-established AMLAW 100 law firms like Jones Day and Kirkland & Ellis are outsourcing under pressure from clients.

8. OUTSOURCING U.S. LAW FIRMS MAY CHARGE A REASONABLE SUPERVISORY FEE

It is reasonable and acceptable for U.S. law firms outsourcing legal work offshore to charge a reasonable supervisory fee in conjunction with outsourced legal work. It is axiomatic that a lawyer who outsources legal work, whether to an associate, contract lawyer or offshore provider, ultimately remains responsible to his client for the quality and timeliness of delivery of the legal product. If a lawyer assigns the research and writing of a brief to a junior associate, the assigning lawyer will not customarily submit the final work product to the court without review and supervision. So it is with offshore legal outsourcing. Published ethics opinions of the San Diego, New York and American Bar Associations indicate that a lawyer who outsources offshore may charge a reasonable supervisory fee.

9. CLIENTS ARE INSISTING ON SELECTIVE OUTSOURCING TO ACHIEVE COST SAVINGS

Clients talk to one another. Executives of major companies golf and have lunch with one another. Corporate General Counsel attend meetings and CLE seminars, sharing information and ways to increase efficiencies and cut costs. They know about offshore outsourcing and the dramatic cost savings that can be achieved. It is unacceptable, therefore, to ignore legal outsourcing and, as one managing law firm partner told me, have “no appetite” for it.

10. OUTSOURCING WILL HAPPEN.

Doing nothing is not an option. Some are outsourcing. Many more are considering it, whether prompted by keen business sense or financial realities. Outsourcing is like a large, ominous wave a few miles offshore. It is preferable to surf the wave than wait to be engulfed, overwhelmed by its power and left wondering what happened.

British economist Herbert Spencer is credited with originating the term “survival of the fittest” in the mid 19th century. Although also having application to biology, Spencer applied the concept of survival of the fittest to free market economics. In a free market, companies and businesses will do what is necessary to survive. If that means outsourcing some U.S. legal jobs for the greater good of survival of the entity itself, then so be it. The model of ever increasing salaries and expenses for law firms followed by even higher legal fees charged clients cannot sustain itself any longer. Legal outsourcing is here to stay. The wise will take notice, survive and flourish.

5 Tips for the Best Law Firm Logo

What does your law firm logo suggest to your potential clients?

You only have one chance to make a first impression. Upon meeting a new or prospective client and exchanging business cards, the client will get an impression of your firm based on the law firm logo alone.

So, what does your logo say about your firm?

Your law firm logo represents your law firm to the outside world. Every seemingly insignificant aspect of it makes an impression on the client. Font. Color scheme. Name arrangement. Text size. Spacing. Inclusion of a scale or gavel image.

Looking at your business card and firm logo, your client gets an impression. Your client forms an idea in his or her head of what your firm stands for. Is your logo modern or traditional? Does it make you look frugal and indifferent, like you made the logo yourself in Microsoft Word or does it look like you value your reputation and appearance, and had a professional designer create the logo?

Before approaching a logo designer or creating the logo yourself, there are some very important steps you can take to get a clear picture of what the logo should entail and how it should represent your law firm.

Tip 1: Look at your competitors

You don’t want your law firm to look like the other law firms in your practice area and location, lest your firm be unmemorable to the client. The last thing you want to do is confuse the client with what sets your firm apart from everyone else. See what you like about their logos. Make notes. Try and gauge how their logos make you perceive their law firms. Do their logos make the firms appear professional or do they seem like the firms are unremarkable? Think about what you like and don’t like about these firm logos when deciding on how your own logo is going to look.

Tip 2: Modern or traditional? Decide on a theme

Do you want your logo to be modern or traditional?

These are the two main theme options for law firm logos. This usually means the difference between serif and sans-serif font. What does that mean? Open Microsoft Word or Google Docs. Type your law firm name in Times New Roman, Georgia, or Garamond font. Then, type your firm name again in either Arial or Helvetica. The first three fonts are considered serif fonts because you can see they have little lines on the bottom and sides of letters like A, B, and C. The sans-serif fonts do not have these lines. Serif fonts are associated with newspapers, considered more traditional fonts. Sans-serif fonts are associated with Internet content and are considered modern. Do you want your law firm to have the appearance of a traditional, storied practice or do you want it to appear sleek, adaptive, and modern? The choice is yours.

Tip 3: Choose a Font

Now that we’ve decided whether to go serif or sans-serif, we need to choose which font is going to represent the firm. First thing’s first, it should be noted that you should NOT use a commonly used font. Arial, Helvetica, Times New Roman. People see these fonts every day. Whether they recognize them immediately as Arial, Helvetica, or Times New Roman, people know these fonts. They see Times New Roman while reading the newspaper. They see Helvetica when getting on the subway. They see Arial while reading websites. These fonts do not make an impression anymore.

There are many sites where you can download fonts for free. Google has a directory of free fonts, most of which you’re guaranteed to not have come across. Take a look around. Use the Google Font tool to test out your law firm name in different fonts and compare them side by side.

One last tip on choosing a font: Don’t be indecisive. While two or three fonts may look similar to you, your clients will never know the difference when you choose a font for your law firm logo. They will never know that it was down to three similar fonts. The client will likely not be influenced any differently by similar looking fonts. You may want to ask someone else for their opinion on two or three fonts, but make a choice and stick with it.

Tip 4: Choose your colors

Online you can find many color wheel tools useful to help web designers choose color schemes. Click on a primary color and they will suggest complementary colors. Just make sure that you use a color selection helping tool. Otherwise, you may end up picking two colors that just don’t work together.

When picking colors try avoiding those of a law firm in your practice area and region. You want to make sure you stand apart in the mind of the client. If you think every color combination has been taken by the firms in your region, just ensure that your logo look different to distinguish you from your competitors.

Tip 5: Images or No Images?

Often a law firm logo entails an arrangement of the names of the partners. Sometimes it’s an abbreviation of those names. Other times, the logo includes a tried and true symbol of the legal profession – the scales of justice – or a gavel – alongside the partner names.

Generally, I hate the scales of justice and gavel. They’ve been played out. They’re overdone. They’re sickening. They’re unimaginative.

If you are going to include an image alongside your partner names, why not include a memorable image that represents your law firm, conveys professionalism, and also originality? You can do this by including an image, if you so choose, of the initials of the firm partners’ names. If the firm is Crane, Poole, and Schmidt, you could have a small CPS initialed logo. This is a more modern element to law firm logos, differentiates the firm, and also looks professional. So, if you are going to include an image, consider shelving the gavel and scales for something a bit more contemporary and unique.

Conclusion

With all of these tips in mind, you’re ahead of the game. Whether you decide to make a logo yourself or approach logo designers, you know what you want your logo to convey. You know the message you want your clients to receive. You know how your competitors look and how you’re going to look different. Now, you can clearly envision what your logo is going to look like without having to get wildly different designs from a designer that won’t be useful for your firm.

If you are proficient at Photoshop, I would suggest taking a shot at creating a logo yourself. If not, maybe you should consider hiring a logo designer. In this crowdsourcing era of Internet technology, logo designs can be incredibly inexpensive. There are many sites now like 99designs.com where you can crowdsource your logo design, having up to several hundred design mock-ups sent to you by freelance designers, with you choosing and paying for your favorite.

Good luck.

Law Firm Branding – The Danger Of Illusory Brands

Over the last ten years, we have witnessed advances in law practice technology, the expanding roles of paralegals, and the outsourcing of legal work. Yet despite all of these cost-cutting and time-saving advantages, many law firms, especially the large ones, remain struggling for their very survival.

Only a decade ago, law firms were enjoying remarkable levels of growth and prosperity. Firm coffers were full and firms were spending significant sums of money on promoting themselves in order to enter new markets and acquire premium business. Some firms even began experimenting with branding. In those days, branding was mostly viewed as just another form of advertising and promotion. In truth, firm leadership rarely understood the branding process or what the concept of branding was actually intended to accomplish. But it didn’t really matter, revenue was climbing and profitability remained strong. But what so many of these firms didn’t expect was that, in just a few years, our economy would be shaken by a deep and fierce recession, one which would shake the financial foundations of even the most profitable of firms.

For law firms, the recession that began in 2007 had, by 2010, penetrated the most sacred of realms- the proverbial benchmark of a firms standing and achievement- profits-per-partner. For many firms, especially mega-firms, the decline in law partner profits were reaching record lows and it wasn’t long until the legal landscape was littered with failed firms both large and small.

In trying to deflect further losses, firms began to lay off associates and staff in record number. But the problems went much deeper. There simply were too many lawyers and not enough premium work to go around. It was a clear case of overcapacity, and it was also clear it was not going to improve anytime soon.

More than twelve of the nation’s major law firms, with more than 1,000 partners between them, had completely failed in a span of about seven years. Against this background, law schools were still churning out thousands of eager law graduates every year. Highly trained young men and women who were starved for the chance to enter a profession that once held the promise of wealth, status and stability.

As partner profits dwindled, partner infighting grew rampant. Partner would compete against partner for the same piece of business. The collegial “team-driven” identity and “progressive culture” that firms spent millions of dollars promoting as their firm’s unique brand and culture had vanished as quickly as it was created. While financial times were tough, in truth many of the big firms had the resources to survive the downturn. Instead, partners with big books of business were choosing to take what they could and joined other firms- demoralizing those left behind.

To understand why this was happening, we must first remove ourselves from the specific context and internal politics of any one firm and consider the larger picture. The failure and decline of firms was not only a crisis of economics and overcapacity, it was also a crisis of character, identity, values and leadership. Sadly, the brand identity many of these firms pronounced as their own did not match up against the reality of who they actually were. In other words, for many firms, the brand identity they created was illusory- and illusory brands ultimately fracture in times of financial stress.

Ultimately, the branding process must also be a transformative process in search of the firms highest and most cherished values. It is, and must be, a process of reinvention at every level of the firm- especially its leadership. The transformative process is fundamental to building a true and enduring brand. Without it, firms run the risk of communicating an identity that does not represent them, and this is the danger, especially when the firm is tested against the stress of difficult times.

How this miscommunication of identity was allowed to happen varied widely from firm to firm. But generally speaking, while firm leadership was initially supportive of the branding process, in most cases these same partners were rarely willing to risk exposing the firm’s real problems in fear that it would expose their own.

While decline of law firm revenue was clearly attributable to both a bad economy and an oversupply of lawyers, from an internal perspective the firm’s inability to come together and develop effective measures to withstand these pressures could usually be traced directly back to the lack of partner leadership. A firm that proclaims to be something it is not- is inevitably doomed to failure. Say nothing of the psychic damage it causes at the collective level of the firm. It is no different then the psychological dynamics of the person who pretends to be someone he is not- ultimately it leads to confusion, frustration and eventually self-betrayal.

It’s easy to indulge in self-praise when economic times are good. Some partners might even attribute their success to all that clever branding they put into place years before. But, when the threat of financial crisis enters the picture, the same firm can quickly devolve into self-predatory behavior- a vicious cycle of fear and greed that inevitably turns into an “eat-or-be-eaten” culture- which for most firms marks the beginning of the end.

For any firm playing out its last inning, it is simply too late to rally the troops or reach for those so-called cherished values that were supposedly driving the firm’s success. In truth, when times got bad, these values were nowhere to be found, except on the firms website, magazine ads and brochures.

The point is that when a firm is actually driven by its cherished beliefs and core values, the firm will begin to live by them, especially in times of adversity. The firm will pull together and rally behind its leadership, and with clarity of purpose, each person will do what needs to be done to weather the storm. But when there exists a fundamental contradiction between what a firm says they are, and how they actually conduct themselves both internally and to the world- the vendors with whom they do business and the clients they represent- the firm will never reach its full potential. It will remain dysfunctional and it will risk joining that growing list of failed firms.

The financial collapse and deterioration of so many law firms in the past few years is a compelling testament to the importance of insisting on truth and integrity in the branding process.

In 2014, it is clear that business-as-usual in our profession is no longer a sustainable proposition. For this reason I am convinced that firms driven by fear and greed are firms destined to eventually self-destruct. That is because, no matter how much these firms try to brand, they will never be able to brand truthfully, and therefore they will never be able to compete against more progressive and enlightened firms- those that do not worship wealth and power, but rather cherish personal and professional fulfillment.

There is a choice for those who believe their firm is worth saving- reinvent yourself to reflect values that are truly worthy of cherishing, or risk devolving into something less than what you aspire to be and risk your firm’s heart and soul in the process.