The Low-Cost Center Trend
by Scott Paster
October 7, 2016
I recently read an ALM Intelligence report focused on how law firms are looking to reduce costs by leveraging the benefits of a shared service center strategy (ALM Intelligence, 2016, “Shared Service Centers: Reshaping the Legal Marketplace and Saving Money,” almlegalintel.com).
The paper states: “Law firms have approached the issue of efficiency improvement and cost control in a variety of ways…An approach that many firms are increasingly embracing—and many other professional services firms outside of the legal space have long embraced—aims to optimize firm operations by shifting work away from law firms’ traditional, lawyer-centric offices to lower-cost alternatives. While there is significant variability in how law firms are accomplishing this, one strategy dominates: the onshore shared service center.” The paper goes on to detail how the savings generated by this strategy can add up to millions of dollars in reduced labor and real estate costs.
I have written before about a similar trend concerning legal office services and the drive to advance operational efficiency and contain costs. As most law firms know, the solutions provided by their office services center—whether the center is managed internally or by an outside provider—have expanded dramatically over the past few years. Certainly the traditional services including mailroom service and print/copy management as well as overseeing conference room, reception and facilities management activities remain critical to a firm’s success.
However, enhanced staff expertise and new workflow processes and document process management technologies are morphing the traditional office services center into a true “information management center” that can provide document imaging, records management, electronic evidence processing and more. Another key development driving this trend has been the fact that many legal administrators and attorneys are now less dependent on physical documents and more focused on dealing with information in digital format such as utilizing online collaborative document review tools and services. As with onshore shared service centers, leveraging the benefits of an internal or outsourced information management center can significantly improve efficiency while reducing costs.
As always, an evolution brings both opportunities and challenges. To learn more, feel free to visit the Legal Services page of our website. There you will have access to the latest industry trends including white papers, survey reports, case histories and more.