Running a business can be hugely rewarding but it also brings many challenges. Whether you are running a law firm or an accountancy practice, you need to ensure you have the right people and skills on your team while also balancing the budget. Outsourcing can be an invaluable tool for growing your business by bringing in skills you don’t have in-house, but it’s important to know what roles to outsource and when is the right time to do it.
If you’re new to outsourcing, it helps to start with a basic definition. Outsourcing is a practice used by businesses in which services or jobs are distributed to a third party, differing from hiring employees. This can include functions such as admin, accounting, legal, marketing and IT. Outsourcing has many advantages including increased skills, greater focus and a reduction in costs.
Let’s take a closer look at how to decide what to outsource, what to keep in-house, when it’s the right time to start outsourcing and some of the challenges involved.
When is the right time to outsource?
As the saying goes, timing is everything, and this applies to outsourcing too. If you are feeling the squeeze in your business and are wondering whether now is the time to outsource some roles, it may help to ask yourself these questions:
Do you lack expertise?
It may be a no-brainer, but despite how amazing your core team is, they can’t excel at everything. This means it is sometimes essential to outsource certain tasks when you don’t have the in-team knowledge or skills necessary to do the job.
By outsourcing, a business can draw on the unique skills of experts in certain fields which can improve performance. Outsourcing to people with greater expertise is especially useful in areas of legal, marketing or accounting.
Outsourcing also impacts the credibility of your business. When you lack expertise, there’s a risk you may provide misleading information or not perform a task to the highest standard. If you outsource to someone with specific expertise, you have a better chance of delivering a good outcome for your client and your business.
Are you wasting good talent?
It’s important to nourish your business’ core strengths. A key reason for outsourcing is to allow employees to focus their attention on the tasks that bring value to the business. By outsourcing administrative or repetitive tasks, it allows greater expertise and attention to be directed towards more vital activities that directly affect the bottom line.
For example, in the case of a legal business, you might have a talented associate attorney who writes beautiful motions but is bogged down doing legal research and managing discovery, so you aren’t nourishing their core strengths. That team member will excel if you free up their time to focus on motion work and start outsourcing the research and discovery management functions.
Likewise, if you run a marketing agency and your creative people are constantly held back from producing their best work with menial tasks like filling out spreadsheets, it would be wise to outsource this to an admin or virtual assistant.
Are you time-poor?
If you’re falling behind on tasks that could be helping your business grow and succeed, it may be time to consider outsourcing. As the saying goes, losing time is losing money. Attorneys are especially aware of the value of their time. By choosing to outsource, you are saving time which can help increase the efficiency and effectiveness of your business.
If you run a law firm, consider that many new potential clients want to meet during “regular office hours.” During these hours you should be focusing efforts on meeting with potential clients for consultations in order to grow your business. However, if the majority of your time during “regular office hours” is spent drafting documents and working on case strategy you aren’t maximizing the potential for your law firm to reach its full potential.
The same goes for other types of businesses. Whether you operate an insurance company or a finance firm, you are the best sales person for your business. You need to be available to meet and connect with prospective clients during office hours. Outsourcing day-to-day work will free you up to grow your company and keep your existing clients happy.
Are there tasks you keep avoiding?
If you have had certain tasks lingering on your to-do list for months, it’s worth asking yourself if completing them is a good use of your time. If the answer is no, then outsourcing them may be the perfect way to finally get them crossed off. Those tasks that you love to avoid are prime candidates for someone else’s to-do list!
If you’re an attorney, perhaps you’ve written hundreds of motions for summary judgment in your career and you simply don’t want to draft another one. Or if you’re an accountant, you may be fed up with the process of filing taxes with the IRS on behalf of your clients. That’s okay! The best way to grow your firm is to incorporate regular delegation and outsourcing into your work flow.
Getting those vital tasks done is a key part of being a successful business. Outsourcing those lingering or less important tasks to someone else can drastically improve your company’s focus. You’ll also feel a huge sense of relief knowing that those tasks are no longer haunting you each day!
3 Steps to help you decide what to outsource
Once you’ve uncovered a need to outsource some of the work in your business, the next step is deciding which roles or tasks are ready to be outsourced. These 3 steps can help identify the prime candidates.
Identify your core business strengths (and weaknesses)
Decide what your business’s strengths are and identify your weaknesses. Picking one of a few key areas in which your business is lacking allows you to spend more time and energy on other key areas. The less important areas or areas lacking expertise can and should be delegated.
Recognize how often you may need the tasks fulfilled
Being efficient is key to your business’s success. Ask yourself whether your tasks need to be completed daily, weekly, or monthly. If you seem to have a handful of tasks that need to be completed within a limited timeframe, outsourcing can be a useful tool. Even recurring, ongoing tasks can be delegated efficiently when you curate a talented team of freelancers to work with on a regular basis.
Consider the task’s importance
If a task rates low on the importance scale, it may be a good idea to outsource it. Is the task vital to your company’s competitive edge? Consider whether the task is part of what makes your business unique and niche from others in your sector. If the answer is no, outsourcing can be useful in allowing employees’ attention to be given to those more important tasks.
5 functions that can be outsourced
If you’re new to outsourcing, you might be wondering which roles and functions can be outsourced. These five areas are a good place to start.
Outsourcing substantive legal work is a great idea for multiple reasons. Law firms can outsource legal work like litigation support, document review, analysis and drafting, and legal documentation. This helps avoid costly salaries and reduces the need to hire a full-time lawyer.
As the leading online marketplace for freelance lawyers, we understand that different companies have varying needs. Through LAWCLERK, you can hire a freelance lawyer as added support on a per-project basis or if you require lawyers on a more permanent or ongoing basis, you can hire a “virtual associate” via our new Virtual Association Subscription Program. It’s as simple as posting a job and hiring the right talent!
The repetitive nature of administrative tasks can impede your business. There are plenty of administrative duties that can easily be outsourced. Payroll processing also can be outsourced, reducing costs and providing a more straightforward means of filing your taxes on time and paying employees.
Other assistant duties like data entry and calendar management are also administrative tasks that can be beneficial to outsource. Using a virtual assistant to manage your business’ calendar will save your company time and will help keep you organized, while outsourcing data entry to a specialized team can not only save costs but also increase accuracy.
Bookkeeping and accounting
Tasks like bookkeeping and accounting are an important aspect of any business but without a dedicated resource working on them, they may become disorganized. This is especially critical when managing client trust funds or IOLTA accounts. As such, it is becoming more practical for companies to outsource bookkeeping and accounting.
Improper bookkeeping can be an expensive mistake to make but hiring an in-house bookkeeper or accountant can be costly. An outsourced team of experts will most likely be more affordable and just as accurate. Many offer services customized to the needs of particular businesses like law firms or ecommerce companies, for example.
You are an expert at what you do but you can’t be versed in everything required to run a successful business. Marketing is one function that many business owners choose to outsource because it’s a specialized field that requires a specific set of skills.
Effective marketing of your business is essential to stay on top of the competition and can include a diverse array of tools including email, social media, and paid advertising. Using platforms like Linkedln, Twitter, Facebook, and Instagram requires a lot of time, creativity and organization. Outsourcing these and other marketing tasks to marketing agencies or freelance marketers with the current know-how can help your business to thrive.
Technology and IT
Technology and IT require highly specialized skills — a fact no business wants to learn the hard way. Things like setting up software and creating company websites are complex and mistakes can be costly. This is why it’s more cost-efficient to outsource the building and management of websites and other IT tasks to the experts.
Cyber-attacks and threats to businesses including law firms have become a significant concern. The importance of managing and mitigating risks before they escalate cannot be emphasized strongly enough.
The challenges of outsourcing
Outsourcing has many useful functions that can positively impact a business, but it is not without its challenges. The risks that come with outsourcing are similar to those that arise when hiring new talent, but more often than not, the benefits to your business will far outweigh the challenges. Following are the main challenges that are important to consider if you decide to outsource.
Loss of control
When you delegate work, you will naturally lose some degree of control. You may lose visibility of how the tasks are performed, so delegating projects should be done cautiously with proper handover and monitoring in place. The good news is that if you delegate time consuming tasks like legal research, writing and managing discovery you can outsource them in a way that you remain in control of supervising and reviewing the work before it is sent to the client or court.
Outsourcing work also means that lines of communication may become less clear. This is because people you have hired could be working in different time zones and you may be communicating virtually rather than in person. You can maintain good communication with outsourced staff by setting up an instant messaging system and by scheduling regular calls and meetings either weekly or monthly.
When you outsource a task, you should have clear standards and expectations so that you don’t run into issues down the track. If your standards differ from that of your freelancer, it may not be the right match. Always be clear about what you expect from your outsourced team so they know exactly what to deliver. You could discuss specifics such as tone and style of writing, formatting preferences and the like. You can absolutely provide templates or samples to a freelancer to give them a clear idea of your expectations.
Risks to security
The more employees you have, the more people have access to your company’s networks, data, and resources. This could pose risks to security as more and more people gain access to sensitive information, especially if personal data is involved. To avoid issues arising, use a secure software system and be aware of sharing sensitive data. Ask your freelancers about their work station. Do they have a complex password on their WIFI system? Do they take care to keep confidential information out of eyesight of roommates or visitors? These questions may seem intrusive but addressing these issues can head off problems down the road.
There may be hidden costs
One of the greatest upsides of outsourcing is saving money, but there is a chance you could get ripped off if you don’t have your wits about you. Read the terms from any service providers carefully to avoid the financial burdens that may arise when outsourcing work to a third party. By and large we find the cost savings from reduced overhead far outweigh any risks.
Outsource the smart way
If this is the first time you’ve considered outsourcing the task might seem daunting, but it needn’t be. By doing some basic research, taking an honest look at your business and speaking to legal outsourcing experts like LAWCLERK, you can make smart choices that will take your firm to the next level.