The concept of outsourcing is relatively new for the Russian business community. In the meantime, year by year both in Russia and abroad it is more obvious that without outsourcing (professional, managerial, consulting resources) it is difficult for companies, more so manufacturing ones, to stay competitive under restrictions of a constantly developing market.
Legal outsourcing has absolute advantages. Some believe there are also drawbacks.
Legal outsourcing advantages:
1. Cost cutting.
Legal outsourcing service utilization results in reduced company’s administrative costs, office costs (work space setup), and taxes on employees’ salaries.
2. Increased competitiveness.
Company leaders constantly face different issues related to labor, tax, civil, administrative, and sometimes criminal law. All the issues lie heavy on an in-house counsel. But it should be understood that even the most experienced in-house counsel usually cannot be highly professional in all areas of law at once. If however this means a whole department capable of providing reliable protection of employer’s interests and dealing with various legal issues on a real-time basis, then costs of its upkeep will be several times’ worth of legal outsourcing costs. By entering into a legal outsourcing contract a company automatically gets a whole staff of experienced legal experts at its disposal for its operations.
3. No staff issues.
Company leaders constantly face different issues related to labor, tax, and civil law. Our client automatically avoids such issues as vacations, dismissals, and any other reasons of employees’ absence at work. The issues will not be of concern for clients making use of the outsourcing service. In this case, they will not have to think about how the outsourcer manages to perform jobs on time and in the best way. No doubt a company using the legal outsourcing service have a good bargain getting a whole legal department or firm at the value of one counsel.
The main arguments of legal outsourcing opponents are as follows:
1. Confidential information will be known to the public.
- when it comes to an in-house counsel there exists such probability as well;
- if disclosure by an independent legal expert leads to damages on part of your company you may recover the same against the legal firm, while it is highly unlikely that you will be able to recover such an amount against your in-house counsel;
- psychological aspect: an outsider show interest in your company’s internal matters only professionally. They will not discuss them to anyone outside your office.
2. An invited legal expert is not your employee. Thus, he/she will not be scrupulous enough as regards solution of your issues.
- this is just the kind of expert who will go into more detail trying to investigate an issue and find the ultimate solution due to financial incentive;
- a more experienced legal expert comes up with more original solutions. Be confident that you are not the first company facing these issues. Solutions are already available.
3. Legal outsourcing services are expensive and such costs do not pay (one does not use the legal services on a daily basis).
- the fact that at a given moment a legal expert is not rendering his/her advisory opinion or preparing documents for your company does not mean he/she is doing nothing. Professional development is a never-ending process.
- professional services may not be cheap. Your company’s legal support is not a case when excessive cost-cutting is appropriate.
4. In terms of location, an outside expert is not available to you at any moment.
- legal expert’s workplace and procedure satisfying the both parties are specified in a contract, thus you may always voice your preferences;
- your company saves on additional work space maintenance.