Why Legal Firms Are Focusing Their Outsourcing Efforts

In an age of increasing demands for efficiency, outsourcing has become a hot topic of discussion.

Written by  Fatima Freifer
Written by Fatima Freifer


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The term ‘Outsourcing’ has been a buzzword for the last couple of years.  Outsourcing is becoming one of the new legal technology trends being embraced by law firms in an attempt to operate and reduce costs. [1] While it is by no means a new practice, law firms are beginning to focus their outsourcing efforts in ways that no doubt will have a positive impact on their bottom line. It is becoming increasingly common as more and more legal practices choose to delegate tasks that could be done by an outside entity. But what does outsourcing mean and why is it such a hot topic for law firms? With the growing number of law firms reviewing their legal departments and streamlining operations, there is a shift in delegation of tasks amongst other factors. There are many benefits to outsourcing, but there are also some potential pitfalls to look out for.


What is Legal Outsourcing?

Legal outsourcing is the practice of hiring outside law firms to handle certain tasks, including drafting documents, reviewing documents, processing documents, or acting as a process server. It can also include employing outside attorneys to represent clients in litigation or other types of dispute resolution.


Law firms are looking for ways to improve profitability and productivity by reducing costs. The amount of legal work is growing at a rapid pace. Even with the growth, many law firms struggle to keep up with demand. [2] The good news is that many firms have discovered that outsourcing legal software jobs  and legal software trainer jobs can be a profitable solution. The downside is that it has become increasingly difficult to find and hire the right talent. That’s where the term “third-party’ comes into play. Outsourcing activities that are performed by a third party, rather than by an employee of the law firm. The third-party handles tasks like document production, filing and correspondence without having to hire or train an employee. In the legal market, law firms can outsource legal management, administration, accounting, and secretarial services instead of investing in expensive law firm document management technology. [3]


What Makes Legal Firms Look to Outsourcing?

Law firms are facing growing pressure to reduce costs and find more efficient ways to do business. The best way to do this may be to outsource some of the firm’s legal tasks to external parties.  It is not possible to outsource everything, of course, but outsourcing can save time and costs. It can also assist with staying up to date with new laws and regulations that may impact the legal industry, including the impact of technology on legal services. [4] Outsourcing can also help a legal firm scale as the business grows. To stay profitable, it is a requirement to be efficient, and outsourcing allows for the workload to be distributed among more people or firms.


What are the benefits of legal outsourcing?

Legal firms are starting to realise that hiring and managing law clerks is cost-prohibitive and time-consuming, and that they should look to other firms to fill their open positions. This is a big change, because traditionally, law firms have been wary of embracing technology in the legal sector and hiring outside their firms. However, as law firms become more efficient, they are looking for ways to cut costs and streamline operations. Outsourcing is one way that law firms are doing exactly that. [5]

The benefits of outsourcing include the reduced cost of legal services, legal technology solutions and the ease of hiring and managing a team of remote employees. Firms can use the technology platform of a third-party managed service provider rather than building and maintaining their own technology platform. New legal technology software can be prohibitively more expensive to buy than to lease. These managed service providers frequently conduct stringent quality assurance and control reviews of work and create dashboards that track the status and quality of throughput. Many a law firms embrace legal technology artificial intelligence and the future of law practice includes outsourcing in that list.  [6]


Legal firm hiring trends

As the practice of legal outsourcing has been growing for the past few years, firms are reaching a tipping point where hiring outside the firm is now a possibility. The reason why more firms are looking to outsource is simple: it is a means to becoming more economical and diverting funds to other areas of the firm. If a law firm can find a vendor that can do the same work for less, then outsourcing is a key benefit. [7]


Legal firms are increasingly adopting a more business-savvy mindset, driven by the need for more efficiency and lower costs. This evolution has been driven by a number of factors, including the rise of digital platforms, drastic cost decreases, and the need for firms to remain competitive. [8]


Legal outsourcing risks

While outsourcing can save a law firm various costs, it also comes with some risks. The biggest one is that the firm is now responsible for any mistakes made by the vendor. Even though outsourcing allows for savings on labour costs, it is imperative to make sure that the vendor hired will deliver positive results. This can also impact the hiring process and increase the risk of a poor hiring decision. This is especially true when it comes to legal hiring, which can be challenging and even intimidating. Furthermore, smaller firms may be less experienced when it comes to hiring and managing remote teams, which can lead to errors. [9]


Even larger firms may not understand the best practices for hiring and managing remote teams, making them more susceptible to fraud and other risks. A hiring manager in a law firm needs to be vigilant when outsourcing some of the firm’s work. One needs to be realistic in regard to expectations. It is important to understand the differences between outsourcing, contracting, and working with an independent contractor. All three have their pros and cons, but outsourcing carries additional risk and is not always the best choice for a firm. [10]


The best way to mitigate the risks associated with outsourcing and legal hiring is to research the best proven practices. When it comes to managing a remote team, there should be clear guidelines for everyone involved, from the hiring manager to the law clerk. It is also recommended to invest in training to help employees better understand the hiring process and how to identify and avoid any risks.



Legal outsourcing is a trend that is growing in popularity with law firms. The benefits of outsourcing are numerous, but there are also risks involved. While there is no standard method for determining the right pay for law clerks, following a tried and tested code of ethics is a sure fire way to set off on the right foot. The good news is that outsourcing is a manageable risk, and the risks can be mitigated by hiring carefully and conducting thorough checks. Each outsourcing decision should be made carefully, and the firm must make sure that the vendor has a good track record and is capable of delivering results.



[1] Inflation and its Impact on Commercial Law, Fatima Freifer https://goodlawsoftware.co.uk/inflation-and-its-impact-on-commercial-law

[2] Legal function outsourcing ≠ transformation of legal departments, 7 Dec 2021, https://financialservicesblog.accenture.com/legal-function-outsourcing-transformation-of-legal-departments

[3] Reasons for Outsourcing Legal Services, https://www.hg.org/legal-articles/reasons-for-outsourcing-legal-services-43262

[4] Guide for in-house lawyers on outsourcing legal services, 25 MARCH 2021, https://craftycounsel.co.uk/blog/guide-for-in-house-lawyers-on-outsourcing-legal-services

[5] New Survey Sheds Light on How Corporate Legal Departments Handle Outsourcing – eDiscovery Trends, https://cloudnine.com/ediscoverydaily/electronic-discovery/new-survey-sheds-light-on-how-corporate-legal-departments-handle-outsourcing-ediscovery-trends/

[6] New Roles in Law and How Legal Tech Is Developing Them, Fatima Freifer https://goodlawsoftware.co.uk/new-roles-in-law-and-how-legal-tech-is-developing-them

[7] Virtual Legal Consultations & Ethical Considerations, Fatima Freifer https://goodlawsoftware.co.uk/virtual-legal-consultations-ethical-considerations

[8] Legal Process Outsourcing A Workbook for In-House Counsel https://www.acc.com/sites/default/files/2019-04/Legal-Process-Outsourcing-A-Workbook-for-In-House-Counsel.pdf

[9] How Valuable Are Legal Outsourcing Services? https://www.bolsterlegal.com/how-valuable-are-legal-outsourcing-services/

[10] Outsourcing legal teams – Will it ever be more than flavour of the month? Hamish McNicol, https://www.inhouselawyer.co.uk/feature/outsourcing-legal-teams-will-it-ever-be-more-than-flavour-of-the-month/

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