Last week, one of the major legal blogs announced that a prominent Midwestern law firm dropped two “bombshells”: the first, that the firm is consolidating their legal research with a single provider (Lexis), and second, that the firm is outsourcing their records department to Williams Lea.
Vendor consolidation is a strategy we highlighted last week (October 4) on our own blog as one of quickest and most efficient ways to reduce expenses and to that end, job well done. As far as the consolidation of legal research vendors is concerned, this is a wise move and one that I am sure saved the firm money. In regards to outsourcing, the firm stated that this move was specifically in response to the migration of the records management process shifting from the physical record to the electronic version:
“Our rationale for making this decision is straightforward. The Firm is migrating away from records management processes that focus on the physical file to an environment where, in most cases, the electronic version of a document is the official record.”
Now, this firm is not a client of Mattern & Associates, and so, I am hypothesizing about these next two items—but I would advise the firm to not stop at consolidation, but to take their cost savings all the way. Here’s what I mean:
- Consolidating legal research vendors. What is the firm doing about the recovery of the legal research costs? Depending upon billable percentages and write-offs, any increase in their net billable realization will have a much greater impact than a corresponding reduction in costs. There was no mention about the firm addressing this area and modifying their strategies.
- Outsourcing. What about the thousand of physical files stored offsite? Do they have a firm-wide strategy to reduce the cost of these files and, through a records retention policy, to eventually destroy them? Have they structured their offsite records storage contracts to allow this to be a cost-effective strategy?
This firm may have addressed these two items, but if not, they are leaving significant cost savings on the table. They, and other firms that are also looking at vendor consolidation, don’t have to stop there—they can take it all the way and the results will bring a much greater bang for their buck. Now that is a real bombshell.