In retrospect, outsourcing worked out pretty well for my law firm.
Of course, it would have been much easier if I had known what I was doing at the time (which is why we recently created a course on outsourcing – so you can do it without all my challenges).
When I started my firm, I had no idea how hard it would be to get employees to do what I needed. Getting results from other humans is difficult. It will never be easy.
As the leader of your business, your goal is to get work done through others. You’ll have to go down one of three paths with your team…
Most lawyers choose to assemble and manage a small team of lawyers. It can get ugly. Fast.
Managing people is hard. They don’t teach it in law school (or any other professional school, for that matter). From what I can tell, it’s barely taught in business school.
Management is mostly learned along the way. Many businesses plod along without good management, which is why we’re often frustrated by the purchases we make, the poor service we receive, and the attitudes of people who service our accounts.
For the same reason, we’re excited when we come across a business that does things right, on time, and as-promised.
Management is a never-ending headache. You never get to stop. It never gets easy. But it’s an essential part of getting results for discriminating clients.
The minute you stop managing your team, it will lose its edge and outcomes will suffer. You need endless patience, resilience, and persistence.
Lawyers who commit to managing a team have to learn as they go. In addition to practicing law, they need to become excellent people managers. Being able to lead a team is an incredibly valuable skill.
An alternative to managing a team is to assemble autonomous service providers on an ad hoc basis. Today’s technology and marketplaces make this approach easier and more accessible than ever.
You can staff a big project quickly with experienced experts and let them collaborate to reach a successful outcome. Instead of hiring generalists, you can hire specialists experienced in whatever challenge you face at the moment.
You can find excellent vendors to help you run the firm and handle client work. You might hire vendors to help with human resources, financial management, information technology, and marketing projects.
You might hire other lawyers to help with a particular legal problem or specialists adept at assisting lawyers with a particular problem.
If you commit to outsourcing, you’ll become an expert at sizing up new team members, organizing and managing their work, supporting them, and driving them forward.
You’ll become an excellent project manager. Being able to manage the disparate parts of an ad hoc team is also an incredibly valuable skill.
3. A hybrid approach
Most of us find we can’t hire in-house people for every role because the role is too small or it requires specialized (expensive) expertise. We can’t solve every problem internally, so we outsource some things.
At a minimum, most law firms outsource some accounting, information technology, and marketing. You might outsource more, but you’ll probably find yourself mired in a soupy mix of managing people, dealing with outsourcers (and their assignments), and coping with clients.
The hybrid approach leaves us in an awkward middle space without expertise in either management or outsourcing. We become semi-adequate people managers and semi-adequate project managers.
When we dabble on both ends of the spectrum, it can be difficult to gain clarity regarding the best techniques and tactics for each arrangement. We struggle with hiring and managing in-house positions, as well as using online marketplaces to assemble effective teams.
Unfortunately, those of us who take the hybrid approach typically end up confused, and fail to become excellent at managing either people or projects.
My approach: A zero management team (haha!)
I did the hybrid thing for a long time. I tried managing our internal team and outsourcing the things a law firm typically outsources.
The result was a poorly managed team and outsourced projects left to run themselves while I scrambled back and forth between employees, vendors and clients.
I spent a lot of time banging my head against the wall and wondering why nobody would do what I wanted.
My team limped along because I lacked the skills to encourage peak performance.
Was I a crappy manager? Guilty as charged. I wish I’d done better.
My dream was to create a business of people who didn’t need to be managed. After all, I certainly didn’t need someone to manage me. I drove myself, I enjoyed my autonomy, and I got my work done.
I figured I could create a law firm filled with people like me who didn’t need, or want, someone telling them what to do next.
I held a meeting with my team where we adopted a firm values statement about autonomy and authority. I got buy-in from all of my employees.
We agreed that we wanted a culture where each of us could have space and freedom to make our own decisions, and we were willing to accept responsibility for managing those decisions whether they went well or not.
I got my team to agree to manage themselves.
But it’s clear to me now that my interest in autonomy was just a clever way to get out of managing my team. I pitched it as autonomy, but it was really just neglect.
I should have shown up more, engaged more, and involved myself with each team member.
My team never managed themselves. They wanted to make it work. We all had good intentions. But people need direction, feedback and coaching. Without management, most teams struggle to stay on course.
Fail! Here's what I should have done instead
Over a long period of time, I became more effective at managing employees and the projects we outsourced to vendors.
But it took me a LONG time to figure it out.
I practiced law for thirty years, and I struggled with this problem for most of those years. Had I understood, at the outset, how complex (but essential) it is to delegate the work that I once thought of as mine alone, I could have been dramatically more efficient.
I could have gone further, achieved better results, and done more.
Over the years, though, from all of those frustrations, I gained some insight. I can see clearly now. I should have clarified my approach.
- In order for the business to grow, other people needed to get the work done, so I could focus on higher priorities.
- Those “others” could be employees or external contractors/vendors.
- Managing employees is different than managing the projects of external contractors/vendors.
- I needed to develop skills for managing both types of “others” and become excellent at least at one approach.
Had I committed to learning one approach (managing people or outsourcing projects), I could have been more effective sooner. Mastering one approach is certainly more efficient than trying to learn both simultaneously.
I didn’t have clarity in my approach, which created a lack of clarity for my employees and my contractors/vendors.
If I had chosen to focus on managing people, I should have learned to do it better.
I should have made sure each employee clearly understood their responsibilities. I should have delegated more effectively, tracked their work more carefully, provided better feedback, and spent more time coaching them toward success.
When I did those things with some people, they performed well. I should have done it with everyone.
Management works. It gets results. But it’s hard and it takes time, patience, and a never-ending commitment to your team.
If I had chosen to focus on managing projects, I should have learned to map out the schedule, specify deliverables, set timelines, and control outcomes. I should have learned to run kickoff meetings, communicate with vendors, and manage reporting.
Some of my outsourced projects went well, but that was usually because we had good luck selecting the vendor. The success of the project was rarely attributable to my project management skills.
By spreading myself thin, I failed to get the traction required to accelerate growth. I was mired in the details of learning too many things at one time, and doing them all poorly.
It was hard to focus, mostly because I didn't realize I was failing as both a people and a project manager. I was stumbling through running my business.
At the time, I didn't understand the skills I lacked, nor was I able to back up far enough to see all the pieces of the law firm puzzle.
Outsourcing works better than ever
It wasn't long ago that the best and the brightest workers wanted to be in-house employees. They wanted all the benefits and perks of a traditional employment relationship.
The world has turned upside down over the past decade on that front. Great employees are available on a project-by-project basis. It's easier than ever to access a network of people, including lawyers, with the skills you need to accomplish your goals.
I've been using sites like Upwork to hire these types of people for quite some time now.
In fact, if I had it to do over again, I'd lean more heavily on outsourcing. Personally, and this may just be me, I find managing outsourced projects easier than managing a team of humans. But seriously, that could just be me.
You might be exceptionally good at one-to-one meetings, team meetings, providing feedback and coaching, and maintaining your team culture. Go with your strength. Outsourcing isn't for everyone.
But outsourcing works for me. I've been able to get an excellent work product for my clients and my business without having to do the management work.
I still have to manage the project, of course. Projects don’t manage themselves. Sometimes vendors fail to deliver, and being distant from my contractors can be frustrating. Outsourcing isn’t nirvana.
Managing outsourced projects comes with its own challenges. They're just different challenges than those we face when we manage employees.
What can you outsource?
You can outsource EVERYTHING!
We started by outsourcing the usual suspect: accounting. We needed someone to prepare our tax return. That was easy, normal, and what everyone else did.
Then we outsourced some marketing. We needed help with websites, radio and TV advertising, public relations, media relations, and on and on. Again, that was pretty easy.
When we realized outsourcing was working, we started to dismantle our team more aggressively.
The independent contractors we used for our projects worked for themselves. They loved being independent, autonomous, and results oriented.
These folks were like me: They didn’t want anyone managing their daily activities. They knew how to deliver and they got paid for performance. I quickly became a big fan of this approach.
We jettisoned our internal technology people in exchange for an outsourced vendor and independent contractors.
The bookkeeping person left, so we replaced her with a small bookkeeping firm.
We replaced the human resources person with a professional employer organization.
We replaced the receptionist with an auto-attendant and an answering service.
We replaced the file clerks with contractors in the Philippines.
We found paralegals in India, computer programmers in Ukraine, and virtual assistants in Israel.
As the size of our team dwindled, so did our need for office space, desks, chairs and coffee.
We took this approach further and shifted the compensation system for our legal work. It became an incentive-based variable-compensation system–a commission instead of a salary. We paid our lawyers for finishing cases.
At its core, our attorney compensation system proved to be more than simply variable pay with incentives. It evolved our associates’ mindset. Instead of employees, they became contractors.
By paying them for their performance, we incentivized them to manage themselves, take control of their practices, and direct their own careers. Some adapted, some struggled, but the law firm become more profitable.
The more we outsourced, the better we became at defining and managing projects. We developed the skills to get work done through others.
We became adept at searching Upwork, defining projects, weeding through proposals, and coordinating with vendors. We detailed much of what we learned in our outsourcing course. You don't need our lessons to do what we've done, but our course is a shortcut for getting faster results and better outcomes.
Outsource something now
Where do you start?
When we did the research for our outsourcing course, we found that most of our Rosen Institute Premium members had already outsourced their accounting and some technology. They were comfortable with an accounting firm, an IT vendor, and a contractor or two for other special projects.
But many of our members struggled to outsource their website work to anyone other than a web design firm that specializes in law firm websites.
Our members would meet with a sales representative, take the free cookies (a common gift from vendors), and buy the whole package.
Later, they would regret their purchase when they realized how many calories were in the cookies and how much they spent on a website that looks like a cookie-cutter package imitation of most other lawyer websites.
We push our members to build something unique on the web, to avoid marketing firms selling to their competitors, and to try something different in order to stand out.
We push them to use vendors who aren’t used to dealing with lawyers because the traditional industry vendors fail to bring creative ideas. Finding someone creative with mad skills and interesting ideas is a struggle in the legal field.
So our course uses the building of a new website to illustrate outsourcing principles. We walk you through defining a project, setting objectives, posting the project, selecting a vendor, and managing the relationships to a successful outcome. You’ll end up with a website that looks different from your competitors (and generates better results).
The outsourcing course teaches our members how to outsource projects using online marketplaces instead of hiring a full service agency. It's a different approach that achieves different results. It's something most of our members have never tried.
It turns out that different can be better in many other aspects of law practice as well. Lawyers who see success by outsourcing one project end up trying our approach for other projects as well.
They develop outsourcing skills that grow as they experiment with getting work done outside of the law firm. Once a lawyer realizes they can grow exponentially faster by outsourcing, they jump on the bandwagon. It’s like magic.
Outsourcing frees you up to manifest your law firm vision
As our team size shrank, I became a better manager of our internal team.
A smaller team is easier to manage. It takes less time and less energy. I found myself excited by the possibilities as we reduced headcount and I could actually remember everyone's name.
By outsourcing more projects, I found the time to handle more client calls, get personally involved in the progress of my employees, and work on the business so we could continue to grow.
It's incredibly challenging to be good at all of the components of running a business. To be good at practicing law, managing a team, accounting and bookkeeping, human resources, technology, and everything else is an unreasonable expectation.
We mostly accept that reality, and outsource some of those tasks. But we can go further.
We can outsource more of the business than many lawyers believe. Outsourcing today is easier, more reliable, and more effective than ever. Now is a good time to free up your time so you can focus on your priorities.
I wish I'd understood more of what I can see so clearly now as I was living through it. The pressure and stress of dealing with more than you can manage is tough.
I assumed it was my shortcomings that made my practice such a struggle. Now I see that it’s simply difficult, if not impossible, for one person to learn and juggle all the disparate aspects of a law firm. I needed to either get really good at managing people or really good at managing projects.
I just didn't see a clear path while I was mired in the mess.
Outsourcing proved to be the right path for me. It got me where I needed to go. Getting results from other humans is difficult work. It'll never be easy.
Outsourcing might be the right path for you as well.