For many businesses, the choice between recruiting an internal legal professional and opting for legal service solutions can be a pivotal decision. There is no right or wrong answer – the decision depends on the facts of the situation, your location, and the required objective. In this article, we’ll explore what the benefits are for recruiting resource internally and equally why an increasing number of companies are instead turning to outsourced legal services to augment the way in which they provide in-house legal services.
Hiring an in-house legal professional can be a substantial financial commitment. It involves not only salaries, but benefits, office space, national insurance and ongoing training costs which can add up to a significant amount on top of the published annual wage. On the other hand, legal service solutions offer flexible pricing models. This cost-effective approach allows businesses to pay only for the legal services they need when they need them. It’s particularly advantageous for organisations that face fluctuating legal demands or those looking to maximise cost-efficiency.
Per hour it may look like full time resource is the best option however this is not straight forward – 100% productivity on a 35 hour week will never be achieved with employees needing to attend training, team meetings, supervise other colleagues and take general down time, all of which is paid for as part of the annual wage. Outsourced solutions only charge for what is used so it is that productive time only that is paid for. Just as importantly too is that geography plays a big part in overall costings given that lawyers based in the South for example will demand far higher wages than those in the North, and so finding outsourced providers that can ‘Northshore’ or even do work in lower cost countries (whilst managing quality) can make the calculation even closer.
Legal service providers assemble teams of experts with diverse backgrounds and specialisations. When you hire an internal legal professional, you may be limited to their individual expertise. However, outsourced service providers can tap into a network of specialists who can handle a wide range of legal matters. This includes specialisms like corporate governance or data protection, ensuring that your business has access to the right legal resources for specific compliance needs and challenges. The work can also be moved to the right level of experience so that you pay for the level of support that you need, whereas it can be difficult to ensure a full time resource doesn’t pick up work that could be done by someone more junior.
Full time resource has the advantage of being there for your business five days per week, with a commitment to knowing the business and its needs. There will be time – five weeks if not more – however where that staff member is not around, not to mention potential periods of sickness or other absences catered by employment law. Outsourcing solutions do not have this same disadvantage, being available for 52 weeks of the year using their team to cover absences so that the client sees a seamless service. Ensuring outsourcing is done properly too, with initial onboarding training for the team in the same way an employee would receive, and regular constant work, ensures the outsourced team are fully plugged in and up to speed with the working of the business.
Businesses often experience variations in their legal requirements. Legal service solutions offer the flexibility to scale up or down based on your needs. This adaptability ensures that you’re not overstaffed during quieter times and have sufficient support during busy periods. This scalability is especially valuable for startups and growing businesses.
The legal landscape is becoming increasingly technology-driven. Legal service providers invest in cutting-edge technology and software to streamline processes and manage documents effectively. By choosing legal service solutions, businesses gain access to these advanced tools without the need for significant investments. This can lead to faster and more cost-effective legal services, particularly in the realm of data protection, where efficient record-keeping is essential.
An outsourced service provider is employed to do a job well, and if they don’t, clients can very easily vote with their feet. So the pressure is constantly on a service provider not only to do a good job, but to improve and innovate to consistently show value to their proposition. Employed staff on the other hand may not always necessarily be that consistent – competent, committed, and driven staff members are worth their weight in gold but there may be equal numbers of staff who can become complacent, under motivated or are ‘lifers’, and it can be difficult and time consuming to refresh the staff in your team.
In-house legal teams, especially small teams, often choose to bring in junior staff such as trainee or paralegals on the basis that there are simple tasks that can be handed off to them. This can work, although choosing the correct paralegal or trainee who can learn quickly and take on responsibility easily is key. Time supervising and teaching junior members should not be taken lightly as this will inevitably reduce the productivity of the more senior lawyers, which can depending on the tasks being delegated and speed of uptake can be substantial. Junior staff will also not remain junior staff forever, meaning that their position will need to be re-resourced in the future with another junior lawyer who will again need the level of training to allow them to get up to speed. With an outsourced provider, these dynamics are pushed to the provider to manage, with all training dealt with by the provider as a cost to them, leaving the client just to pay for the services that they obtain.
While the decision between hiring an internal legal professional and utilising legal service solutions hinges on your unique business needs, the advantages of the latter approach can in many cases be compelling. Cost-effectiveness, expertise on demand, the service provider culture, scalability, access to advanced technology and management of team dynamics are all compelling reasons why businesses are increasingly turning to legal service solutions.
Outsourcing can in many ways be a key component of a fully optimised legal function, with the correct work being carried out in the right place for the right price, allowing the legal team to meet their objectives by using a range of tools to deliver legal services at their disposal.
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