What Fronterion’s Legal Outsourcing Trends Report Means for Independent U.S.-Based Contract Lawyers and Hiring Firms

Fronterion, an international management consultancy that focuses exclusively on advising law firms and corporations on outsourced legal services, recently released a report called Ten for 2010: Top Ten Trends for Legal Outsourcing in 2010. While the report is aimed at convincing large American and UK firms and corporations to outsource to offshore LPO providers, it contains valuable nuggets for both independent, U.S.-based contract lawyers and the solos and small firms that hire them.

Two of the trends Fronterion identified are particularly significant for independent, U.S.-based contract lawyers. The first (which the ABA Journal focused on in an article last Friday), is the prediction that,

[a]s legal outsourcing vendors gain prominence in 2010, they will have much greater access to talent as more lawyers consider outsourcing as a genuine career path.

Client confidence in the outsourcing legal services market is translating into a rising talent pool, both on and offshore. Positions at outsourcing vendors will increasingly become an attractive alternative career path for entrepreneurial and global-minded legal professionals as pay, positions and prestige increase.

While Fronterion doesn’t specify exactly what types of onshore positions might be available with large outsourcing vendors, it’s likely that those positions would include (1) sales and marketing; (2) legal technology training and support; and (3) top-level supervision and quality control of foreign lawyers’ work. If you love being a lawyer, only the third type of position would be of interest to you.

But if you’re really an “entrepreneurial . . . legal professional,” chances are you won’t be happy working for someone else: instead, consider starting your own practice working exclusively (or primarily) as a contract lawyer. As an independent contract lawyer since 1996, I’ve always been more than satisfied with my income and the regard in which I’m held by my clients and colleagues. With the legal industry still reeling from the (supposedly now-over) recession, more and more lawyers are pursuing “alternative” careers such as contract lawyering.

The second Fronterion-identified trend that’s particularly important for independent, U.S.-based contract lawyers is the fact that,

[d]ue to the continued uncertain economic outlook in 2010, many firms may be hesitant to lock into long-term, multi-year contract agreements with legal outsourcing vendors. Instead, firms will consider flexible outsourcing agreement structures with third-party vendors which will allow for increased resources on-demand.

Just as the economy has made large firms are hesitant to lock into long-term, multi-year contract agreements with legal outsourcing vendors, it has made the small firms and solos that hire independent U.S.-based contract lawyers reluctant to hire associates, even as their workload increases. As I noted just over a year ago, a bad economy is good news for independent, U.S.-based contract lawyers.

One trend identified in the Fronterion report is of special interest to hiring attorneys. Fronterion predicts that

[l]egal organisations will take a more strategic approach to their outsourcing arrangements as opposed to an ad hoc, cost-focused approach.

* * *. . . [S]trategic opportunities include better allocation of internal firm resources, increased access to scale, advanced restructuring opportunities and more effective variability management.

In the solo and small firm context, smart hiring attorneys will realize that they can reallocate the time that they (and their current associates) spend doing tasks that either

1. they don’t enjoy doing;
2. they’re not very good at;
3. don’t directly help grow the firm; or
4. some combination of (1)-(3)

by outsourcing those tasks. Hiring attorneys (and their associates) are then free to spend their time on tasks that

1. they enjoy;
2. they’re good at;
3. help grow the firm (such as in-person marketing and relationship-building); or
4. carry some or all of these benefits.

For example, a small firm might give an associate an opportunity to develop a new practice area (and thus diversify the firm’s offerings), while outsourcing some back-end tasks (such as legal research and writing) that would otherwise occupy an inordinate amount of associate time.

Fronterion’s conclusion is a rousing call to action for hiring attorneys:

Industry leaders will not only adapt to change but will also use change to their advantage. Successful law firms and corporate counsels will study the trends in 2010 and ask, “How can our firm not only adjust to change but thrive in the midst of it?” The answer to that question will most likely involve changes in the delivery of legal services.

Supporting—not supplanting— firm operations with an outside legal services vendor has emerged as a successful strategy and will gain momentum in 2010.

In a changing and dynamic legal industry, firms that understand these emerging trends will be able to leverage the full value of their outside legal and litigation support vendors.

Trends mean change. Responding to change means success.

As law practice experts such as Carolyn Elefant, Allison Shields and Susan Cartier Liebel have observed, solos can respond to changes in the legal industry much more quickly than large firms can; I would expand this to small firms as well. There’s no better time than now—at the threshhold of a new decade—to use this agility to incorporate outsourcing as an integral component of a 21st century business model.