By Rob Mattern, President
Published in Legal Management Magazine
As firms analyze the viability of returning to the office, they need to take some permanent steps regarding their back- and middle-office services. The steps outlined below should reduce current costs 25% to 30% and, if done correctly, provide the flexibility needed to move forward.
The key word to keep in mind is flexibility, not only over services but also costs —
all without losing the superior customer service that end users need and are accustomed to. It is all possible if it is done correctly.
1. RIGHTSIZE YOUR BACK- AND MIDDLE-OFFICE SERVICES
It is gratifying to see how many firms maintained full headcount in their back-office services regardless of whether they were outsourced or in-house. It may be time to review operations and make appropriate adjustments. The volumes are not there and won’t be there anytime soon.
Unfortunately/fortunately there is an abundance of talent out there to fill these positions when the need comes back. Another option is to redeploy this staff into an area that should get more focus now, such as digitization of records.
2. RIGHTSIZE OR RENEGOTIATE YOUR CONTRACTS
Some contracts are dependent on service volume and will adjust accordingly —
in other words, if you don’t use it, you are not getting billed. Examples of these contracts are office supplies or overnight shipping. If your volume has stayed steady, it is an excellent time to look at your contract. Service providers are anxious to procure and secure business.
Other contracts, such as off-site records storage, are not volume-dependent — you are paying for those stored cubic feet regardless of the services. It’s an excellent time to negotiate. If you don’t have the resources in-house due to internal cutbacks, hire an outside consultant.
3. UTILIZE CONSULTANTS TO GET THINGS DONE
As firms cut back on support and professional staff, the most successful will be the ones that leverage the talent of outside consultants to come in and complete projects that deliver results. You may need an information governance policy or retention schedule that will allow you to decrease off-site storage and reduce costs, or an outsourcing request for proposal that will help you trim back-office expense. Think like your clients think when they hire your firm — hire experts to get the job done well.
4. TAKE A HARD LOOK AT IN-HOUSE SERVICES THAT ARE NOT CURRENTLY OUTSOURCED
Now can be a great time to look at outsourcing services that are currently completed in house. Outsourcing, if done right, can be an excellent tool to increase flexibility over the services being performed and the associated costs. It allows you access to talent you may not have had before and should provide an industrywide perspective. The status of current in-house employees must be addressed, and it is critical to build flexibility into these contracts.
Many outsourcing providers will try to include nonsolicitation or severance clauses into the agreements that hinder your ability to manage the costs. Be sure to have contractual terms that allow 100% flexibility over the status of the personnel.
5. OUTPUT (MFDS AND PRINTERS)
Chances are you entered the pandemic overequipped, and now your firm is way overequipped. Look at reducing units, speed and capacity to match your projected reduced volume. This is another area you should build flexibility into — so if volumes change in the future, units can be upgraded, rightsized or deleted as you see fit.
6. MAXIMIZE SERVICES FOR THE WFH SEGMENT OF YOUR POPULATION
Work from home (WFH) is here to stay. Make sure you have plans in place to provide maintenance on firm-provided equipment, supplies and access to overnight services.
7. ACCELERATE THE DIGITIZATION OF RECORDS
If there is one area where it makes sense to spend money, it is in digitizing current records. It does not mean going into your off-site records storage vendors and permanently withdrawing boxes to scan. Instead, consider the records that are not active but still on-site. You will need processes — an information governance policy and associated retention schedules — in place to support this initiative, but if you are looking to retain or redeploy personnel, this is the area to do it.
The successful law firm will be the one that adapts to their current environment in a way that allows for the flexibility the future will demand. Setting up your contracts correctly, utilizing expertise where needed and making the tough decisions when required will position your firm well.