Like law firms, corporate legal departments generally have plenty of office space, attorneys, paralegals, support staff, and benefits. And, many of the challenges they face are the same challenges law firms face. But as corporate legal departments, they also have some of their very own challenges. Just as they do solos and law firms, paralegal support services compliment the corporate legal department’s unique needs.
Corporate legal departments face:
- Increased workloads;
- Tighter budgets;
- An increase in the number of legal matters they’re charged with overseeing for the corporation;
- Significant increases in litigation costs;
- Limited resources, requiring them to maximize the use of the few resources they have; and
- A need to prove their value to the corporation.
More and more, corporate legal departments are turning to outsourcing to minimize cost and maximize value to their client (the corporation). They outsource to try and mitigate increased workloads, to minimize administrative and labor costs, minimize litigation costs, do more with less, and provide top-level legal services to the corporation.
Why is outsourcing such a great option, even during hiring freezes?
When there’s a hiring freeze, there’s a huge void that cannot be filled every time someone leaves the company. That workload has to be distributed amongst others, in addition to their already-extensive workload. The company’s goal in implementing a hiring freeze is to minimize expenses and/or allocate those funds to other areas. And even though the department is not authorized to hire replacement employees, there are generally funds budgetable for other expenses such as the retention of outside services, which fall under a different expense category.
When an employee leaves, the company saves not only wages, it also saves employment-related costs and taxes; benefit-related expenses such as workers’ comp. insurance, health and dental benefits, retirement benefits, and sick and vacation benefits; reduces costs for human resources; the time and expense of advertising the position, going through the hiring process, and training a new employee; and, costs associated with overhead, including equipment, furniture, and office space. Of course, this list of expenses is not all-inclusive, but the idea is present.
The legal department can outsource those same tasks that were once handled by an employee at a fraction of the cost to a contract/freelance paralegal or attorney. None of the overhead, human resources, administrative, or employment expenses exist; the corporation pays only for the work performed, saving thousands of dollars each year while addressing increased workloads for remaining employees, budgeting constraints, and increases in the number of legal matters while reducing legal costs associated with litigation and increasing the department’s value to the corporation. When you know the benefits of outsourcing and compare the options, it just makes sense.