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External solutions?

External solutions?

With firms looking to cut costs globally, the future of internal support staff is under threat. Is outsourcing the solution? Kate Gibbs investigatesAS SOME large UK law firms launch sweeping…

With firms looking to cut costs globally, the future of internal support staff is under threat. Is outsourcing the solution? Kate Gibbs investigates

AS SOME large UK law firms launch sweeping reviews of their support staff, assessing the necessity of paying top rates for jobs that could just as easily be done overseas, Australian law firms also look inwards.

Freshfields Bruckhaus Deringer is expected to make a number of redundancies as part of a reassessment of its support services teams in the UK. The magic circle firm announced the review to its London staff in mid-October this year, and is now going through a consultation process with up to 100 affected staff members.

But Freshfields is only the latest magic circle firm to review its support service teams. Clifford Chance is now looking to launch a shared service team in India, which will also include its IT support function and the global finance centre.

According to some news reports, the firm has consulted with staff in an effort to identify which support roles in its offices around the world can also be moved to Delhi in India. London’s The Lawyer reported in October that Clifford Chance had axed about 700 business support roles over three years, a reduction that allowed the firm to empty two floors of its Canary Wharf office.

The moves represent a global rethink on ways to save costs, but are not necessarily a sign of things to come for Australian firms. Holding Redlich Sydney managing partner Ian Robertson said in an interview with Lawyers Weekly that he has reservations about it. He argued that support staff are an important part of the law firm engine and cannot easily be removed without affecting a firm’s effectiveness. “The concept that support staff [are] somehow separate from the rest of the practice is not really correct,” he said.

Holding Redlich takes the view that its support staff are an extremely valuable part of the business and a vital component of client service. “The idea that you could outsource them to another business or another country, I frankly find extraordinary,” Robertson said.

“The other thing, in my view, is that in this business there needs to be a close geographic proximity of all the people working together to produce something for a client. I have heard firms say over the years that they can take instruction from one office and produce a seamlessly good product in another city or another country. I don’t think it’s true and I haven’t seen it working in practice,” he said.

Blake Dawson Waldron (BDW) similarly does very little outsourcing, seeing the risks associated far outweighing the potential benefits, executive director Kevin Coppel said. The top end of the Australian legal market, in which the firm operates, is extremely competitive, argued Coppel, and this means firms are always searching for cost savings. “Cost is an area where we are constantly vigilant,” said Coppel.

BDW does outsource the people who maintain, service and stock its document production devices, such as photocopiers and printers, but little more than that. And even then, they use companies within Australia only, who actually come into the BDW offices. “They basically live here,” said Coppel. The firm gets plenty of proposals from companies that allow them to outsource discrete activities, but while it does look at them, it is yet to find a compelling alternative option.

While acknowledging there are risks around confidentiality and security, Coppel said he basically takes those issues as a given. “If people can’t assure us of that then we don’t even look any further.”

Another concern is a lack of flexibility. Being a people-intensive environment, comprising intelligent and talented professionals, it is difficult to box people in with bureaucratic rules, argued Coppel.

An advantage, however, is access to the best technology, noted Coppel. “It’s really about giving someone else that problem to worry about. While we have specialist knowledge, we are not huge organisations. We employ 1,600 to 1,700 people. There are organisations out there with 30,000 employees and they may have a much deeper expertise in areas that we don’t have.” The firm, then, would look at outsourcing activities that are not necessarily core to what it does, but that are core to what the outsourcer does.

Swaab Attorneys CEO Bronwyn Pott has outsourced some translation work, however, this has been more of a dabble than a full-blown outsource of any one area of support staff. A Spanish woman does translations “somewhere in California” for $25 a page, which Pott said is working well. A Swiss woman who did some German translations was less successful, she said, “so I’ll have to have a fossick for another translator”. She agreed that the process is a little like a lucky dip.

Pott said the firm has outsourced some IT simply because it became so frustrating that it couldn’t get it done locally. But a firm needs someone locally who can “plug the stuff in”, she said. She suggests firms get buy-in from their own IT departments within the office if they are going to outsource any aspect of that type of work.

Some special project work, as well, has been handed over to women who used to work full-time at the firm but then have decided to stay at home. This is an excellent way to retain some talent, Pott argued, because former full-time employees know the way the firm works on the inside.

“This does save a cost. You don’t have the overheads and you don’t have to house them in your office. A lot of firms are moving their non-core staff out of their prime real estate. Some firms have paralegals working from home. It’s a good way to keep people after maternity leave,” Pott said.

While it may be taking off in the UK, outsourcing is yet to be a highly regarded alternative to internal support staff in the Australian legal industry. Some firms have accepted it as an option for special projects, and have, in some cases, shifted parts of their support teams to offices in less expensive real estate, but for the time being, at least, support teams can rest assured that they won’t be shipped away for a cheaper alternative.

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