Worst Is Over According to PWC

While some heralded the recent economic challenges in the US and UK as a basis for growth in the legal outsourcing industry, the actual outcome has been less than expected. Many vendors in growth positions have not been immune from challenging economic times, either.

When litigation and transactional work dries up, domestic legal firms work to keep their own staff busy before using an outside vendor either domestically or abroad. General counsel who have the same or even increased legal requirements in economically challenging times are often forced to delay or forgo legal services due to internal capacity and budget restraints. While client pressure on their legal counsel can have a positive impact on outsourcing, many times firms don’t even have time to consider augmenting their staff with an outside vendor during arduous periods.

What is often lost is that what is good for domestic US and UK legal professionals is also good for legal outsourcing industry. And vice versa.

A well-structured legal outsourcing engagement helps firms proactively manage risks previously uneconomical to pursue. It helps firms direct and allocate internal resources and provides better support to internal personnel. In short, legal outsourcing is not a zero-sum game. This is true for both the buyers and providers of outsourced legal services.

Recent economic volatility has highlighted many benefits of working with outside vendors. In addition to cost savings, outsourcing enables firms to manage variability better, improve client servicing, and initiate transformational change without expenditures among others. Current increased client cost sensitivity is another positive outcome in favor of outsourced legal services.

As organizations see a pick-up in their work dockets and more stable financial conditions (as noted by PWC), law firms and corporate counsels are now able to focus on more proactive organizational initiatives such as a new or expanded outsourcing engagement to better support their staff. We are looking forward to it as well now that the worst is behind us.