Internet Newsletter for Lawyers
May/June 2004, by Delia Venables

Outsourcing and Off-shoring for Lawyers using the Internet
by Sunil Radia

Outsourcing is the practice by which work is sent outside of one's own business to businesses which provide the service as a specialism. In doing this the business outsourcing the work can free itself to deal with its core activities. Outsourcing, in most cases, will produce reductions in business overheads and therefore improve the bottom line.

Off-shoring involves outsourcing work to lower cost environments overseas. This is still a fairly new concept having been introduced to the legal sector some 7 years ago and having expanded considerably in the last 24 months. We regularly hear of call centres and customer care centres being operated from India. Off-shoring is now fully available to legal professionals.

What can be outsourced?

The simplest business processes that can be outsourced are data entry, typing, transcription, database management, discovery and disclosure for litigators, type setting and other routine, repetitive functions. The provision of legal services and some IT functions (including web site development and management) can also be outsourced economically but require a substantial commitment in training and to the establishment of systems and operating protocols between the parties involved.

Hemel Hempstead based Underwood Solicitors recently announced their intention to provide legal support for personal injury cases from South Africa. This is one of the most significant developments in recent months in the context of off-shoring for lawyers. The majority of firms that have taken advantage of outsourcing and off-shoring have used it for back office processes such as administration, data base management and accounting. A large number of firms and indeed many hundreds of lawyers are now off-shoring their typing requirements.

A bit about the Radia Parnership and UKTyping

I am a solicitor practising as a partner in the style of The Radia Partnership www.radialaw.com. My partner is my brother who is a dual graduate (Computational Science and Law). We have set up a business called UKTyping www.uktyping.com which has facilitated off-shoring for UK professionals since 1997. UKTyping provides typing, transcription, data base management, document management and discovery and disclosure processes for lawyers.

The fact that we are solicitors helps in that we understand the professional constraints and fears that fellow professionals may have in outsourcing. We are able to deal with issues such as confidentiality, Law Society Requirements and Data Protection to clients' satisfaction.

The Indian end of the venture is mainly in Delhi although some specialist medico legal and dental legal typing is carried out in Bangalore. We also type in South Africa and provide some data entry services such as time sheet posting from Sri Lanka.

In terms of technical infrastructure, it was the launch of the Olympus digital dictation suite around 7 years ago which provided the economical and reliable means of transmitting recordings over the internet which we needed. I believe that Olympus still make the best digital dictation equipment although Philips have made substantial advances recently.

Benefits of Outsourcing - Case Study

The benefits of outsourcing and particularly off-shoring can be best illustrated with a case study using typing and transcription services as an example. A two partner seven lawyer solicitors practice in the Cambridge area employs 4 legal secretaries (3 full time and 1 part time/evenings). The average remuneration for a full time legal secretary in the area is £15,000 per annum. The actual cost of a secretary to the business after other overheads is £21,000 excluding bonuses and perks. The firm has a mixture of privately funded private client, commercial and property work as well as an element of family law work which is both privately funded and funded by the Community Legal Service. The practice generates approximately 15% of its revenues from criminal law work. The challenges the practice faces are: (i) The need to remain competitive and also to reduce its overheads with a view to making criminal work and funded family law profitable.

(ii) To make more efficient and economical the firm's typing and transcription processes and to reduce typing backlog without increasing overheads.

(iii) To tackle the very high cost of temp secretaries when employed secretaries are away from the office.

(iv) To tackle a situation where at times one or more secretaries may be inundated with work whilst other departments may have staff who are not busy at all.

The partners decide to outsource typing and transcription work to an off-shore agency and make enquiries of various providers including UKTyping. They decide initially to carry out a trial with one of the senior assistant solicitors sending out non-urgent dictation such as attendance notes and statements. They manage to take advantage of a free trial for a few days before deciding to proceed on a paid basis. Within a month five lawyers within the practice are using the outsourced typing service for their routine correspondence taking advantage of a guaranteed 24 hour turnaround. The immediate effect was that all backlog was cleared and that employed staff within the office were able to deal with daily urgent typing requirements, assist with administration, client care and such matters. The need for an evening secretary to clear backlog was eliminated and temp secretaries were no longer needed. The annual cost of typing per off-shore secretary was less than £9,000. With natural staff wastage the firm's fee earner to secretary ratio was reduced from one:two to one:four. In fact the only secretaries employed within the practice were two secretaries who performed all the office administrative functions, dealt with urgent typing requirements and assisted with data entry such as time sheet posting and the like.

The savings to the practice were immediate and considerable. The only notable disadvantage to fee earners was that they were unable to pass the files with the dictation to the secretaries and therefore needed to dictate names, addresses and references which would otherwise have been available to the secretary from the file.

India as an Outsourcing Centre

The main outsourcing centres currently in use by western countries are China, India, South Africa and Sri Lanka. The case study referred to above related to the submission of work to India for typing and transcription. All the major multinational IT companies now have a substantial work force in India. India has an anticipated revenue estimation this year purely from typing and transcription services of $900 million.

India has several advantages as an off-shoring centre:

i) India has a very high level of literacy. Most graduates will take second degrees and often professional qualifications. Staff employed by UKTyping are either graduates or double graduates and some of them have MBAs. Several of the individuals are retired lawyers who prefer to provide transcription and quality control / audit services to typists.

ii) India is a lower cost environment and whilst transcriptionists, in view of their experience, education and expertise demand far higher salaries than many other skilled individuals, the charges are far lower than charges that would be payable to a secretary in the United Kingdom.

iii) English is the main commercial language in India and the English legal system forms the basis of the Indian one.

Potential Pitfalls and Problems

Outsourcing and off-shoring arrangements must be appropriately structured from the outset. If the UK organisation is to employ its own staff and to set up a base then it will need team leaders who are willing to deal with the difficulties in dealing with Indian bureaucracy and set up problems with infrastructure such as the arrangement of phone lines, broadband connections and so on. The set up process can take up to two years. Staff turnover can be high particularly within fields where work is laborious or mundane. It is necessary to provide motivational support to staff, days out together, and team building weekends. It is often easier to arrange a joint venture with an established Indian organisation with a view to enhancing the speed with which the venture can be established.

Issues such as confidentiality, data protection and other local and EU legislation need to be accounted for. British Standards now deal with the provision of services and outsourcing. Lawyers and accountants can have particular difficulty in ensuring that they comply not only with the Data Protection Act requirements but also that their Clients are correctly and appropriately notified of the relevant arrangements in their client care or engagement letters.

Whilst the time difference between the United Kingdom and India is of advantage in enhancing turnaround rates it can cause difficulty in the management of work carried out in India from the UK. This will require team leaders in the UK to be in contact with the Indian workforce from 2.30am UK time. A lot of these issues can be alleviated by an appropriate web interface allowing workflow management and monitoring from the UK both by team leaders with relevant access being provided to Clients so that they can monitor their own work. The UKTyping website allows users to log on, to submit work, to receive work, to monitor progress and to raise any relevant questions or concerns.

One of the greatest difficulties in outsourcing services where there is either direct or indirect contact between clients or customers in the UK and providers in India is the difference in cultural background, the lack of local knowledge on the part of operators in India and often the difficulty in understanding accents. This is also relevant in the field of typing and transcription. As a result it is often necessary for work to be quality checked and audited by experienced staff in the UK. All services provided by UKTyping are quality checked by experienced legal and medical secretaries in the UK prior to the submission of work to client firms.

Summary

Undoubtably the outsourcing and off-shoring of relevant business processes to lower cost environments will become the norm. This will be a matter of necessity rather than choice. In setting up such operations, however, one needs to be diligent in choosing the most appropriate off-shoring centre identifying the facilities and skills that are available at that centre. Management from the UK of the production centre is critically important if standards and quality are to be maintained.

The considerable benefits of off-shoring and outsourcing outweigh the initial difficulties in setting up such an operation and the time and money invested in the establishment of such an operation is recouped within a matter of months.

Sunil Radia is a partner in The Radia Partnership, www.radialaw.com and also represents UKTyping, www.uktyping.com.
Email skr@radialaw.com.

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