Technology plays an increasingly crucial role within the UK Law Firm. The line between legal expert and technologist is being blurred, as the legal sector expands its reliance on innovative technology and IT services to gain an edge and to ensure uninterrupted delivery of service to clients. This demand and reliance places additional pressure on the smooth running of these systems and services, and downtime can quickly result in a loss of billable hours or even client trust. Increasing budgetary pressures and the ongoing tech skills shortage has led organisations to look at new IT services options, including offshoring, in an attempt to balance budgets.
Offshoring, the practice of moving business processes to another country, comes with attractive benefits like lower labour costs, favourable economic conditions, and access to specialised skills. This practice is often driven by the need to reduce costs and improve profitability, which is a common pressure for organisations in the legal sector.
However, offshoring IT services does not come without risks and challenges. For law firms, these can range from data security infringements to disruptive communication barriers, all of which can impact service quality and ultimately, client satisfaction.
In this blog, we will delve into the reasons why some law firms are choosing to offshore their IT services, the potential pitfalls they may encounter, and alternative strategies.
Why offshore?
Offshoring can provide access to a larger talent pool of IT experts, which is particularly relevant given the current tech skills shortage in the UK. By offshoring, firms can tap into global markets where these skills may be more readily available.
Additionally, offshoring can offer cost advantages. It allows law firms to leverage economies of scale and lower labour costs in other countries, which can significantly reduce overall operational expenses. This is a crucial consideration in today's economic climate, where businesses are under increasing pressure to optimise costs.
It can serve as a strategy for facilitating 24x7 support, which may be difficult to fulfil in-house. It can also free up resources within the firm, allowing them to focus on primary legal functions and delivering high quality service to their clients. However, while offshoring might seem attractive, it's crucial for organisations looking into this strategy to fully consider potential implications.
Challenges of offshoring for law firms
Security & legal challenges:
Data security: law firms deal with highly sensitive information, making data security a paramount concern. Offshoring can increase the risk of data breaches due to varying data protection laws and standards in different countries. This data, if compromised, could have severe consequences for clients and the firm itself, including legal ramifications.
Compliance: different countries have different data protection laws and standards. When offshoring, firms need to ensure the provider complies with all relevant regulations, such as GDPR, including those in the firm's home country and the country where the data is processed or stored.
Risk of data leakage: offshoring increases the number of people who have access to an organisation’s data, which inherently increases the risk of data leakage. This could occur unintentionally, due to human error, or intentionally, through malicious actions by employees or hackers.
Frameworks & liability: legal frameworks vary across countries. If a data breach occurs, navigating the legal landscape to address the issue can be complex and costly. The law firm might still be legally liable even if the fault lies with the offshore provider, which could have can have serious reputational and financial implications.
Vendor trustworthiness: the firm must fully trust the offshore provider to handle its data securely. However, assessing a provider's trustworthiness can be challenging, particularly when dealing with companies in foreign countries.
Cultural and quality challenges:
Quality of service: while offshoring can offer cost savings, it may also impact the quality of service. Differences in technical expertise, problem-solving abilities, and understanding of the specific IT infrastructure of the firm can lead to lower service quality.
Communication barriers: language differences can lead to misunderstandings and miscommunications. This could result in errors, slower resolution times, and ultimately, dissatisfaction among the staff who rely on the IT services.
Loss of control: when you offshore IT services, you often give up direct control over those operations. With significant geographic separation, this lack of oversight can make it harder to implement changes, address issues promptly, or maintain the firm's specific service standards.
Time zone differences: Although offshoring can provide 24/7 support, time zone differences can also create challenges such as coordinating meetings or addressing urgent issues.
Loss of face-to-face collaboration: in-person meetings often lead to a more in-depth understanding of the firm's operations and needs, enabling the IT team to provide tailored solutions. Unlike with outsourcing to a UK provider, with offshoring direct collaboration is lost, which could lead to a less personalised service, potential misunderstandings, or slower problem resolution.
Cultural fit: the service provider may have a distinct cultural outlook and communication style that differs from the law firm's. Misalignment in work ethic, decision-making approach, or even business etiquette can lead to misunderstandings, misinterpretations, and ultimately, ineffective collaboration. Such cultural differences could also impact the speed and quality of service delivery, as well as user satisfaction.
Overcoming these challenges requires careful planning, rigorous vendor selection, and effective management of the offshore relationship. It's crucial for law firms to weigh these potential difficulties against the benefits before deciding to offshore their IT services.
Alternatives to offshoring
The main alternative to offshoring is to outsource IT services to a UK-based Mnaged Service Provider (MSP). Unlike offshore providers, local MSPs have a better understanding of your legal firm's culture and requirements. They are also more likely to adhere to the UK’s strict data privacy regulations, reducing the risk of data breaches and cyber-attacks.
Moreover, with local MSPs, services staff can utilise their industry knowledge to provide tailored support. They can provide bespoke services to improve your system's resilience and stability, alleviate your legal team's IT burden, and create solutions that fit your specific needs. Outsourcing to UK-based MSPs will also help reduce costs since the operational, and maintenance costs associated with in-house help centres are eliminated.
Another key challenge when considering offshoring is the impact on current employees. The Transfer of Undertakings (Protection of Employment) regulations, commonly known as TUPE, is a UK law that protects employees' terms and conditions when a business or service is transferred to a new employer. This includes situations where functions such as IT services are outsourced to a new provider.
Outsourcing a IT services to a UK-based provider would likely involve the TUPE process, providing certain benefits over offshoring. Here's why:
Employee rights protection: under TUPE, employees' employment terms and conditions are preserved when a service is outsourced. This means that they continue to enjoy the same rights and protections they had prior to the transfer. This may not be the case with offshoring, where different countries have different employment laws and protections.
Continuity of service: TUPE helps ensure continuity of service, as it often involves the transfer of existing staff to the new service provider. These employees, with their understanding of the firm's systems and processes, can help maintain service levels during the transition.
Reduced risk of legal challenges: TUPE provides clear legal guidelines for outsourcing, reducing the risk of legal disputes associated with employee rights. In contrast, offshoring could potentially lead to complex legal challenges due to differences in employment laws between countries.
Maintaining employee morale and engagement: a well-handled TUPE process can help maintain employee morale and engagement by ensuring a smooth transition, clear communication, and preserving employment terms and conditions. This could be more challenging in an offshoring situation.
Therefore, the TUPE process offers a level of protection and continuity that can make outsourcing to a UK provider a more appealing option for law firms.
MSP such as Advanced are able to provide tailored IT services solutions built for purpose with the client, whereas offshoring is usually more of an ‘out-of-the-box’ service, with less room for personalisation and ongoing support and optimisation. Advanced will act as an extension of your team, working alongside you to support your organisation and focus on XLAs rather than just meeting standard SLAs and ticking a box. At Advanced, our dedicated team, rigorous processes, and unwavering focus on user experience set us apart.
Get in touch today to learn more.
