Outsourcing to Rural Areas Can Lower Costs

website-design-guide-cover-2

Free: 10 Things the Best Law-Firm Website Designs Have in Common

For seven years, Lawyerist has published an annual list of the best law firm websites. Now, you can find out what they have in common.

Rural outsourcing, I’ll call it “ruralsourcing”, is emerging as a cost effective, domestic alternative to outsourcing. Technology has opened the door for clients to find and interact with providers anywhere in the world. Legal outsourcing to places like India and the Philippines has been increasing and a major point of discussion and concern for attorneys and law students alike. As legal outsourcing becomes more common, ruralsourcing can offer even more benefits to the client in the legal context than traditional outsourcing.

1. Ruralsourcing can lower legal costs

The reason for legal process outsourcing, commonly referred to as LPOs, or outsourcing in general is fairly evident, you can lower your overall costs by moving work to a place with lower costs of living and lower costs of overhead. In the era of globalization, outsourcing is commonly thought of as a boon to India, the Philippines and other foreign countries. However, cost savings can be found domestically. Rural service providers in any industry can provide cost savings relative to metro providers because the costs of living and overhead are lower relative to metro areas.

Additionally in the legal context, even if English speaking and legally trained, workers in a foreign country usually need oversight. Attorneys in rural areas don’t need the same type of oversight. When balanced with the cost of oversight and reviewing the work of offshore providers, the costs savings of “ruralsourcing” becomes even more competitive.

2. Ruralsourcing offers local expertise

The legal industry, in particular, is well suited to ruralsourcing. Legal outsourcing may work well for areas like document review and due diligence. However, for work that requires knowledge of local law, interpretation of domestic statute and case law, and giving legal advice, traditional outsourcing is unable to properly serve the needs of clients.

Ruralsourcing, however, allows for technical legal work and interaction with the client that outsourcing does not. Rural attorneys are as versed in state statute and case law as their metro counterparts. They also have the experience in working with the ins and outs of that law and the local courts to know how to best approach a legal problem both in the most cost effective and outcome effective manner. LPOs simply cannot offer that.

3. Ruralsourcing providers have a local license

Having a local license is an important distinction between offshore LPOs and rural providers. Rural providers are licensed attorneys. They have the ability, are trained, and have experience in giving client advice. LPOs, for the most part, do not have attorneys licensed in American jurisdictions. While they can provide support services, they cannot give legal advice without the license. Being licensed also means that the attorney is required to follow ethics rules and likely carries malpractice insurance, which gives the client a recourse if the attorney doesn’t meet general standards of practice. If the matter involves interpreting statute and case law or applying law to a set of facts, an LPO can offer little assistance.

The legal field is evolving to offer high legal service at lower costs. Although offshoreing might be an option for some types of legal services, ruralsourcing is an option that can offer a wider variety of services while still offering savings on cost.

(photo: http://www.flickr.com/photos/stevecadman/134974908/)

Subscribe

Get Lawyerist in Your Inbox, Daily

Current Articles
Current Lab Discussions
  • On the flip side, this is another reason attorneys may want to create web-based services…They can base their offices in areas where the cost of living and the overhead costs of business are cheaper, while still offering services to clients in communities across their state without forcing clients to travel long trips to country offices. You don’t need a downtown office to practice law, but if you plan to work with attorneys who might be in rural communities, separated by greater distances, it’s a good idea to utilize technology to facilitate better communication.

    • I agree. It’s also a reason for rural attorneys to consider a higher web presence.

  • I just drove down a half-mile logging road to get to my house in mid-coast Maine, so I guess I’m “rural”. I offer legal services to other lawyers and law firms, so I am an “outsourcing” vendor. I had not thought of jamming these two terms together to make a new word to describe what I do, but I think it’s terrific. Jennifer, I hope you haven’t protected the term “ruralsourcing.”

    The idea of lawyers hiring people outside their firms from areas where costs are lower, whether or not these areas are within the hiring lawyer’s state, received some strong validation in 2008 with the publication of ABA Ethics Committee Opinion 08-451. That opinion ranged well beyond the law practice economics issue, but on that point it said this: “Labor costs vary greatly across the United States and throughout the rest of the world. Outsourcing affords lawyers the ability to reduce their costs and often the cost to the client to the extent that the individuals or entities providing the outsourced services can do so at lower rates than the lawyer’s own staff.”

  • Jennifer Gumbel
  • Great article! It really does make a lot of sense. My own law firm business plan in part depends upon it. I recently moved from downtown Chicago to Iowa City to open up a boutique corporate law firm. The premise is simple. Same (or better) legal services, lower overhead and hence lower rates. So far, so good.

  • This is a new concept but it should be encourage as it gives a good opportunity for the employment in a field of software outsourcing in a not so developed area.