Outsourcing is in for Scottish legal firms

Published on 22/02/2005 03:34

SCOTLAND’S corporate lawyers have always been cautious about the adoption of new ideas, but the concept of outsourcing within a law firm’s own office is gathering momentum.

While City lawyers are contemplating cuts in partner numbers, Scottish-based firms have been examining their internal structures and looking at how existing fee-earners can do their client work more efficiently.

Martin Sweet, director of operations at Burness in Edinburgh and Glasgow explains: "There is a big benefit for us in outsourcing non-core administrative functions, so we have appointed experts to do this. We can then concentrate on the law for our clients as specialists in this area. This allows us to focus on what we do best."

Burness, one of Scotland’s largest corporate firms - with 35 partners and more than 200 staff - has selected Edinburgh-based Docuserve, now in the vanguard of support for law firms across the UK. Docuserve has grown rapidly over the last three years and now has 180 employees - many embedded in legal firms - helping with the administration and support work that frees up lawyers to get on with their key tasks.

"What’s the point in a lawyer spending valuable time on basic administrative tasks when a specialist can do it more effectively and efficiently?" asks Docuserve’s Chief Executive Margaret Lang, who imported the idea from New York.

"Our job is to assist firms by allowing the lawyers to focus on their core business. We add our own ethos of efficiency and customer service to the firm’s administration services."

Lang was a senior manager with Bowne Business Solutions, a global business servicing the top US investment banks and many of the top 200 US law firms. She returned to Scotland to set up Docuserve with the aim of bringing US best practice to the UK.

Harper Macleod is another top-tier firm that has grown rapidly since its inception in 1988. It is now one of Scotland’s leading medium-sized commercial firms - with a complement of 160 staff, including 30 partners - and also uses Docuserve.

Martin Darroch, Finance Director of Harper Macleod, says there is a constant need to examine how best to serve the firm’s clients: "Our philosophy is one of expertise in our defined specialist areas of law. All of the partners and staff are actively encouraged to become specialists in their areas of commercial interest. What they need is the kind of administrative support that understands this philosophy. We looked at the on-site model provided by a company such as Docuserve and it fits extremely well with our own existing needs."

Recent reports suggest that 100 top City lawyers could lose their jobs because of a slowdown in corporate activity. Annual partnership reviews at Clifford Chance, Allen & Overy, Linklaters and Freshfields Bruckhaus Deringer are expected to lead to job losses in a bid to increase profits. The reviews follow a decision by Lovells to axe 25 partners to drive up its profitability.

Alistair Rose - head of Pricewaterhouse Cooper’s professional partnership advisory group - says: "Law firms are not used to reducing their partner numbers and that creates uncertainty because it is not a pleasant experience if you have been operating in a collegiate atmosphere. Firms are being forced to become more strategic. They have taken a long hard look at their cost base and I don’t think they have had to do that in the past."

Scottish firms - such as Harper Macleod, Lindsays, Henderson Boyd Jackson, Russell & Aitken and Burness - have carried out such reviews and are now adopting elements of on-site outsourcing that can improve efficiencies. But how far should it go?

Some law firms in England and Wales are even outsourcing bulk conveyancing to India but that is beyond the pale for Sweet. "The legal businesses in Scotland are generally very conservative," he says. "We place a lot more emphasis on confidentiality, so we don’t like client documents leaving the premises."

Burness is fairly typical in that it outsources reception, telephone and fax services, mail-room, printing and reprographics and hospitality functions. "This is fine for us," says Sweet. "It is all on-site and nothing leaves the building."

Sweet worked with Eversheds in Leeds and Manchester and has witnessed outsourcing going much further. He believes Burness has found the right balance of efficiency and control.

Down south, others are witnessing the benefits. Wiggin & Co is a niche media law firm once based in London. Their 40 lawyers look after contracts for scriptwriters and handle Hollywood film negotiations. After deciding they didn’t need a large office in London they moved to Cheltenham, opened a satellite office in Los Angeles - and engaged Docuserve.

John Banister, chief operating officer of Wiggin, admits there were initial concerns among staff about the arrival of Docuserve but that these have long gone: "Improvements just happened over time - the end result was considerably different from the starting-point. It takes a long time to change old habits, but you do begin to see the most surprising things."

But did he feel that he had let the staff down by transferring them to another business?

"Anything but; they provide direct, experienced, knowledgeable management support to the administration team - something not always available, due either to time commitments or inexperience, or both, in the legal environment.

"This support not only allows for future career development, but eases the resolution of daily operational issues that have to be dealt with by the staff.

"Staff and their customers also appreciate being pro-active rather than reactive."

Isn’t he worried that Wiggin’s corporate culture was being diluted as a result of outsourcing?

"Not at all. Wiggin & Co are all about quality of service delivery. It’s an ethos that fits alongside Docuserve. Service has improved. Not just the daily structured activities, but the ad hoc one-offs that require flexibility and imagination."

Have there been any problems involving client confidentiality - certainly a major issue for those resistant to on-site outsourcing?

"No problems at all," insists Banister. He adds that the TUPE process of transferring staff - retaining terms of employment on transfer - another potential minefield, was straightforward and efficiently managed.

Lang is obviously delighted to hear such a glowing testimony. "For many legal companies, the concept is dismissed without proper consideration of the advantages," she says. "I think this is due to the fact that it is a relatively new idea in this country, but it is certainly gaining ground."