By Rob Mattern, President
As we enter the ninth month of the COVID-19 pandemic and firms continue to analyze the viability of the return to the office, it is now time to take some more permanent steps regarding your back and middle office services. All these steps outlined below should reduce your current costs 25% to 30% and, if done correctly, provide you the flexibility you will need.
The keyword to keep in mind is flexibility, not only over services, but obviously costs, all without losing the superior customer service that your end users need and are accustomed to. Possible? Yes, if done correctly.
1. Right-size your back and middle office services
It is gratifying to see how many firms maintained full headcount for the last 9 months in their back- office services regardless of whether they were outsourced or in-house. Very benevolent, but the time has come to be realistic and make the appropriate adjustments. The volumes are not there and won’t be there anytime soon. Unfortunately/fortunately there is an abundance of talent on the street 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. Right-size/renegotiate your contracts
Some contracts are service volume dependent 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 is 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 firms will be the ones that leverage the talent of outside consultants to come in and complete projects that deliver results. Whether it is an Information Governance policy/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 access to and should provide an industry-wide 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 non-solicitation 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 over-equipped--and now your firm is way over-equipped. 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, 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 the area of digitizing current records. I am not talking about going into your off-site records storage vendors and permanently withdrawing boxes to scan. As Ben Schmidt points out in his article in this newsletter, it never makes sense to do that. What I am talking about are the records that are not active, but still on-site. Obviously, you need supporting 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 to adapt to their current environment but 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.