Outsourcing your Back Office

If you are a criminal defence lawyer, at least in Ontario, Canada, intending to use a transcript during your trial, you aren’t obligated to provide the Crown with a transcript of the police questioning of parties involved, while the Crown definitely has this obligation.

If you’re the defence, then why not take advantage of this to take the other side by surprise?  A verbatim transcript definitely goes much further than your notes from videos of the police investigation.

I’m sure your client would appreciate this upper hand especially considering it costs around $100.00 for a transcript for an hour long interrogation.  At $2.50/ page for a Court ready transcript, considering the return, this expense is definitely worth it. 

eDecree provides transcripts of police recordings and other legal proceedings .  At $2.50/ page for a standard Court formatted transcript that you can use for trial prep as well as during the trial during your questioning, it’ll give you the edge and the element of surprise that goes a long way.

Every time I speak to a lawyer, including my husband, about the possibility of outsourcing the Legal back office, the first reaction I get is that they can’t live without their assistants.  Who would do the filing?  Who would call the client to arrange appointments?

We’re not talking about replacing the Legal Assistant.  We’re talking about complimenting him/ her.  Pushing the different tasks down the office totem pole is the best way to maximize returns.  Depending on the size of the practice, there’s different ways to do so:

·  Sole Practitioner looking to get the job done?
Having seen my brother-in-law and several of my husband’s friends set up their solo legal practices in various area of law, one thing is for certain.  They start up just like any other start up out there.  They are short of cash and cannot afford an assistant, but will admit that the first thing would do once they could afford one is to hire one.  Which means that they do require someone to do what an assistant would otherwise do.  Type up their dictation, update edits in their documents, file their papers, set up appointments with clients, etc.  require all and having set up a business myself.  Do not have the need for a full-time legal secretary, but still have correspondence that needs to be typed?
Outsource the simple and time consuming task of dictation to the experts @ eDecree. ·  Small to Mid-Sized Firm looking to improve efficiency?
Assuming 1 assistant per lawyer, output is limited by the bandwidth of your assistant

• Limiting the number of files you can handle
• Resulting in multiple day waits for your letters to be transcribed causing delays

Why hire an additional assistant? Reduce costs by dividing the type of tasks that need to be done. The assistant performs tasks which require onsite support, while outsourcing repetitive tasks such as transcription to the experts @ eDecreeBy outsourcing your dictation, you free up considerable time for your legal assistant to take care of higher priority tasks such as scheduling and file management.According to 2007 Salary Guide from Robert Half Legal, the average salary of:·  Junior Legal Secretary: $36,000/yr + benefits ·  Midlevel Legal Secretary: $41,000/yr + benefits which results in a conservative average cost of $51000 on the low end.Why would you utilize an employee costing you ~ $25/ hour to do a task that can be done at ~ $8/ hour? Free up your assistant to perform tasks that are higher up the value chain and result in higher efficiency. As well, outsourcing your dictation can result in significant cost savings for your firm. For instance, using eDecree for your dictation is much cheaper than hiring a temp if your assistant is sick or on vacation. Also, if you have a surplus of dictation, then using eDecree is similarly much cheaper than hiring additional staff. 

In the last post, I introduced the fact that you will need to analyze your business to see what to outsource.  The reason is that business is all about margins, and core competencies.  If your core business is providing insurance services and processing claims that come in as a result, why would you have a large team in the office typing up the correspondence that goes with providing those services?  Your team should consist of people that are able to sell those services (sales), and people who are able to respond to claims coming in from current clients (customer service).  In some cases, insurance companies even go the next step and outsource the claims handling as well, such that they are essentially the sales arm for an underwriting organization.

The insurance company in this case has recognized that their core competency is doing sales.  So their biggest cost is their revenue producing sales staff.  Notice that I used the term “revenue producing”.  That’s your goal as a business owner, to make a profit beyond what you are paying your staff.  If your only fixed cost is your revenue producing staff, then you can effectively increase margins. 

How do you analyze your current resources to see what can be outsourced?  Follow the steps below to chart out your team’s activities.  It might seem like a tedious process but it’ll help you determine how your resources are being spent to perform your core business, and hopefully also to assist in cost cutting measures as a result.  I would recommend doing this in a spreadsheet program of some sort.  It’ll help make the math easier.

1. List all the individuals/ teams currently in your staff, and what you pay them.  Assign an hourly rate to each one of them.
2. Speak to them briefly and list what each of them do.  Assign a percentage to each task they do if they do multiple tasks. 
3. If they work over-time, list that as well, including any compensation that goes with the overtime.
4. Look at the task list and compare it against the person’s qualifications and abilities.  Is the person able to do higher value work compared to what they are currently doing? I have listed a couple of examples below:
   • Is your Legal Assistant and/ or Law Clerk typing up your dictations for you when she could assist you in running files instead?
   • Is your Claims Adjustor spending time typing up letters or hand writing letters instead of dictating them?
5. Highlight all of the tasks that are not directly revenue producing.  I have listed a couple of examples below:
   • When a Legal Assistant or Law Clerk is putting together a Motion document or Brief for a proceeding, it is directly translating to billable hours that the firm is able to collect on.  The time spent doing transcription of a Lawyer’s dictation isn’t directly recoverable as billable hours.  It is usually a part and parcel of the final hourly bill rate.
   • When a Claims Adjustor is typing up a letter, and as a result is only able to run one claim file instead of five or six claims during that same time period, it results in more claims adjustors required overall as a company to process the claim files.  And the process of typing up a letter instead of dictating it definitely isn’t a part of the core competency of that individual.
6. If none of the tasks under a certain individual/ team are revenue producting, highlight the entire individual/ team in that case.

In the next post, I will talk about how to use the above information to compare the cost and rationale of keeping certain things inhouse versus outsourcing them, and to increase the value add of your current staff to increase your profit margins.

In most cases you are so engrossed in your business and its day to day operations that you are unable to see the potential cost savings that outsourcing can provide.  Large businesses bring in process consultants to advise them on the advantages of outsourcing.  And it isn’t because the businesses themselves aren’t aware of the benefits that such cost cutting measures can provide.  It’s because a third party bird’s eye view provides the feedback that is often unattainable when you are sitting in the company and have set it up a certain way to meet the daily needs of your business. 

Such process consultants are often beyond the scope of most small and medium sized businesses.  But a few simple logical steps will allow you to quickly assess which portions of your business you can actually outsource, and which you need to keep inhouse.  Because a business can only grow in size and profits by making a margin off its processes, and if you are able to make a higher margin off certain business processes by outsourcing them without negatively affecting your business, why not?

Over the next few weeks, I will be writing about the different steps you can follow all the way from assessing your business for its outsourcing potential, all the way to ensuring that your business grows in margins while keeping fixed costs as low as possible by outsourcing efficiently.

For those of you who are unclear on the difference between outsourcing, offshoring, and other such jargon that I will be referring to, please refer to my post on the same. 

Much has been said and written about the existing or impending recession in the U.S. Whether you agree or disagree on whether the U.S. is in a recession, everyone would concede that the economy has seen better days. In times of economic uncertainty, businesses should consider every reasonable cost cutting measure. Outsourcing your company’s transcription, typing, and data entry work is one such measure. The cost savings can be very significant. As well, outsorucing will allow your company to focus on its core compentencies and the challenges ahead in a slowing economy.  

Having been through engineering school not too long ago, I remember wishing that I could pay attention to the professor instead of scrambling to take notes.  That was in the days of tape recorders.

Today, with the proliferation of cheap digital recorders in the $50 range, they are a must have for all students.  We have several students who use our service to make what I wished for their reality.  They walk into class, sit at the front of the class with their digital recorder, or maybe place the recorder on the lecturer’s desk if he’s comfortable with being recorded, and get transcripts for the lecture instead of making sure they write down every spoken word.

An hour long lecture can run anywhere from $32 to $55 depending on how quickly they want it back, and the template used for the transcript.  The students could choose to pool their resources as a class and bring down the cost per lecture to anywhere from $1.00 to $3.00 per lecture depending on the size of the class.  An entrepreneurial student could go a step further and make some extra cash on the side.  All you’d have to do is co-ordinate the transcript program for your class.  Which student wouldn’t want that?

That’s an example of how eDecree’s transcription service makes a student’s life easier while helping the entrepreneurial ones make some cash.

Here’s one about taking outsourcing to the extreme: MBA students outsourcing project works

What was intriguing in this one was the organized fashion in which the company that the reporter referred to had actually set up the operation.  You could either trade project reports or get a project report created for a fee.

There’s been quite a bit in the news for the last few years about how we’re losing jobs because of globalization.  First it was the manufacturing industry, then it was IT, then it was call centers, and lately it’s administrative tasks.  It’s a general climb up the professional totem pole, especially with the latest trend of outsourcing non-client-facing professional services such as Legal Research and other paralegal tasks.

There is a distinct difference between Outsourcing, NearShoring and Offshoring and they could be mutually exclusive depending on the arrangement.

Outsourcing is when you take a certain business process and you let a different company take care of it for you, because you recognize that it detracts away from your core competency.  On the most simplistic level, using the US Postal Service or Canada Post to deliver your mail instead of you hand carrying it directly to the recipient is outsourcing because you have decided that you want to focus on your business of delivering a service or making widgets because you have found a service that can do a better job at delivering your mail at a more effective cost than if you hired someone to do it yourself.

Nearshoring is when that same business can be done more efficiently at a closely attached geographical location due to several factors including cost, turnaround time, quality, availability of labor, etc.  Canada is often considered the near shore operations center for several US companies. 

Offshoring is when that same business can be done more efficiently at a distantly located geographical location often in a time zone difference of 12 or so hours.  The reasons for doing so are often the same as those for Nearshoring, except in most cases with higher cost savings due to a difference in economies of the country that is offshoring when compared to the country that it is being offshored.