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Insourcing v. Outsourcing: The Dance of Legal Work

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By William Vogeler, Esq. on February 15, 2017 11:04 AM

It's not as catchy as dancing the hokey-pokey, but corporate attorneys increasingly put one foot in and one foot out in the legal marketplace.

For in-house counsel, it's about balancing the bottom line between outsourcing or insourcing legal work. On the other side of the dance, outside counsel have to bend with changing demands for legal services.

The trend is toward insourcing core attorney work while outsourcing more legal tasks. As a result, lawyers are having to take a step back and reassess their skills.

Mark A. Cohen, a former corporate attorney and litigator, said law firms are feeling the squeeze. That's because legal service providers want the next dance.

The Pendulum Is Swinging

"The pendulum is tipping toward in-house -- at least as to the "legal" work -- as many companies have bulked up their legal departments at the same time they have reduced the number of outside firms ('convergence') while utilizing service providers for certain high-volume/low-value tasks," he wrote for Legal Mosaic.

Clients are demanding flat fees, reverse auctions, fixed pricing, or steep discounts on hourly matters. At the same time, corporate clients are taking work in-house to save money. Meanwhile, legal service providers are offering services that most companies and law firms cannot provide, like complex e-discovery and document management services

Cohen says law firms need to adapt to the changes in the marketplace by collaborating with legal services providers. He said "everybody wins" when lawyers can align expertise with economics.

Room for More or Less

Valerie Fontaine, a legal search consultant and partner with Seltzer Fontaine, says the changing market offers opportunities for attorneys and who don't want to work full-time or only want projects. They can help clients and law firms who need to be flexible.

"And so what the firms are looking for, again, are people that work hard that are very smart and who can do an excellent job. But they may not be requiring some of the fancy entrance requirements they have for hiring their partner-track people," she said on the ABA's podcast, Asked and Answered.

Fontaine, who authored "The Right Moves: Job Search and Career Development Strategies for Lawyers," explained that law practice cycles with the economy.

"We were advising people before, in the recession when people were being laid off and there were so few jobs, any law-related job was a good job to have because it kept them still in the loop and developing their skills to some degree," she said.

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