Thursday, August 19, 2010

Deciding to Outsource ~ Have you considered Issuing a Pilot Project?

For buyers, both corporate legal departments as well as law firms, using an LPO provider is not an easy decision. Hiring LPO providers without fully comprehending the operational, regulatory, ethical, and economic hurdles that may occur is foolhardy to say the least.

Deciding which activities should be done where and by whom, should be first step in your decision to outsource. And as I read somewhere, a decision to use LPO should be made strategically, more than just enthusiastically. How you use LPO in your firm/department should gel well with your firm/department’s positioning amongst your clients. The success or failure of the decision to outsource depends largely upon the ability to implement an effective and robust delivery mechanism and capitalizing upon the advantages generated by it.

The following issues (in no particular order) play a pivotal role in a firm’s decision to outsource to a particular vendor or not:

  • Vendor’s Compliance with various Legislations (especially in the US) governing LPO
  • Cost Advantages
  • Cultural Connect between Buyer and Vendor
  • Infrastructure to Maintain Security and Confidentiality
  • Quality of Deliverables
  • Reputation of the Vendor
  • Talent Pool Availability and Training
  • Turn Around Time of Deliverables

One way of ensuring that the decision to outsource is based on the right set of criteria is to create an RFP answering some of the following crucial questions: (compiled from various sources)

  • For law firms considering outsourcing, you must know which of your clients are likely to be interested in LPO, and for what categories of work?
  • For that work, which specific tasks can be done substantially more efficiently elsewhere, by others?
  • How are we going to know if things are going well?
  • What are the risks of waiting and learning from the mistakes of others?
  • What are we asking the outsourcing supplier to do?
  • What are we going to monitor?
  • What kind of ownership or contractual arrangements could support our business and professional objectives?
  • What kind of quality assurance mechanisms do we need to meet or exceed our current levels of accuracy?
  • Whatever choices we make, how do we prepare our firm for the changes required of us, if implementation of any such program is to be successful?

Once you have coherent answers to these questions, selecting a vendor can also be done through our novel mechanism ~ Issuing a Pilot Project, process described loosely below:

  1. Establish 10-12 high level criteria including the vendor's past outsourcing experience, reputation amongst rival companies, its technical competency, the size of its organization and its knowledge of the industry.
  2. Issue a pilot project** and select two-three finalists.
  3. Invite the finalists to your offices where your legal department sits so that both the in house counsels and the outsourcing vendor can meet first hand, discuss the kind of work and quality expected and generally break the ice.
  4. Post this interaction, make a decision based on the outcome of the pilot project issued as well as feedback received from in house counsels during their interaction with the vendor
  5. Your job isn’t over…in fact if possible you must visit your vendor to see the infratrusture/facilities being offered for yourself. You could do this post signing up with the Vendor or before, though doing it before comes with its own set of complexities: which vendors to go to, how to convince them that I am a serious buyer, etc etc.

**For more about how to issue Pilot Projects please click http://globallpoconference.com/about-the-conference/distinguishing-features.html

OR

Visit the Global LPO Conference 2010 where you have the Absolutely Unique Opportunity to Issue Pilot Projects for your chosen vendors and interact with them to help you make the right decision!

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