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Should you outsource your IT department?

It’s a question many law firm administrators face at some point, particularly when discussing workforce restructuring: Is it time to outsource our IT needs? It’s not an easy decision to make and it’s not the same answer for every firm. If your firm is currently having this discussion, let’s take a look at some of the pros and cons of outsourcing, and what you need to consider before taking the plunge.

The advantages of outsourcing

There are many reasons firms choose to outsource their IT department, such as space constraints or to reduce operating costs. But one reason that comes up most often is the challenge of keeping IT staff trained in current and evolving practices. Those who favor outsourcing believe that their firm will have access to a team of professionals trained in new technologies.

“For many years, we had in-house IT support,” says Travis Armstrong, Firm Administrator at English Lucas Priest & Owsley, LLP. “We outsourced about three years ago and have been very pleased with the results. Now, we have an entire team of professionals looking after our needs and helping us look forward as we grow. We feel much better about the stability and security of our network, which has allowed us to focus more of our attention where it should be—on our law practice and serving our clients.”

Kristine McElhaney, Executive Director at The Cavanagh Law Firm, agrees. “I have worked with both in-house and outsourced IT departments and have found the outsourced option to be a better fit for me.” She adds, “what I have seen happen several times is the (in-house) IT department builds its own little empire. Few people want to understand what they do or how much projects cost or if they are even needed. The department grows, costs increase, and decisions made are not always the best direction for the firm.”

The disadvantages of outsourcing

However, John Ryan, President of Legal Matters Software, Inc., disagrees with the notion that a firm needs to outsource in order to gain access to the latest and greatest technologies. In fact, he feels that by outsourcing, a firm loses the opportunity to have an in-house champion who has the firm’s interests and goals in mind. “I’ve worked with many firms and in some the IT manager is actively looking for and evaluating new technologies and striving to get the right mix in place to make the staff more efficient. That IT person is worth having on staff. I think that forward-looking would be lacking when you outsource.”

Another potential downside is a slow response time to technical problems. In an industry where important deadlines are abundant, waiting for a technician is simply not acceptable and can cause more problems and more stress.

Of course, many vendors are equipped to handle this. “As part of my agreement,” says McElhaney, “I have a tech onsite for four hours each day. Help Desk assistance is available the entire day, and they can access the office remotely. I have found this arrangement to be financially and strategically beneficial.”

Technical support is not a problem for Armstrong either. “Our support team is located about an hour away in another city, but this hasn’t been an issue either. Nearly 95% of problems can be resolved via remote access. They come onsite as needed and for quarterly meetings with our management team. Our provider offered a flat-free contract, so this is a shared risk arrangement. They have a financial incentive to keep things running and minimize support calls as much as possible.”

Speaking of finances, outsourcing is not necessarily cheaper than in-house.”Costs today are still not competitive and many businesses will find that it is cheaper and potentially more effective to keep IT internal,” says Ben Weinberger, Chief Strategy Officer at Phoenix Business Solutions. “That should change for many facets of IT, but we have not reached that point yet for everything. Do the math and you’ll see what I mean. Vendors who try to convince you otherwise are not being honest. Some aspects of IT today are more cost effectively outsourced, but not all.”

Another potential disadvantage is the security of your records. When outsourcing, your data could be stored almost anywhere in the world. And, if you’re working with a large provider, it’s likely to be stored with the data of thousands of other clients, making it a more attractive target for hackers than records stored locally.

Assessing your readiness

Whether you choose to outsource or not depends on the needs of the firm and your corporate culture. Your first step is to take an honest look at your current system, your future upgrade goals, and your end users.

Your current system. Is your current infrastructure clean, stable, and updated? Or is it a patchwork of disjointed components? A poorly built network will require more support and, ultimately, costs, often resulting in the firm being disappointed with the service and possibly changing providers. Before making the decision to outsource your IT department, you might be better served by first having your entire system assessed and perhaps overhauled.

Your future upgrade goals. Consider the firm’s goals and objectives. Are you experiencing growth or are you downsizing? Is a merger in your future or is the firm changing practice areas? Will your needs be unique and require customized technologies? Are you considering a virtual environment or increasing remote access? How will all these changes affect your applications and workflows?

Your people. Another key element in your decision to outsource or not is the firm’s end users. Are your staff members technically savvy or do they require a lot of handholding? Even if your end users are willing to learn basic settings and how to troubleshoot, is there someone on staff you can designate as the IT interface/liaison? This can be anyone from a technically inclined receptionist to the operations manager. Without having a competent person on staff who can diagnose and relay IT issues to the outsource vendor, a firm risks being billed repeatedly for trivial items.

Still can’t decide?

The conversation about whether or not to outsource IT isn’t new and it isn’t going away any time soon. As with other trends, take the time to consider costs, goals, and productivity. And no matter what you decide to do, be prepared to reevaluate the situation in a year or so.

Finding the right partner

Another potential drawback to outsourcing is the downtime experienced when either the firm changes providers or there is turnover within the vendor’s organization. With each transition, there are increased costs, time, and pressure, so it’s important to choose the right provider who is able to support your firm, understands your industry, and is familiar with legal applications and workflows.

“Like any business, when the right partnership comes along, both companies are successful,” says Mark Brophy, Director of Security Services and Risk Management at Keno Kozie Associates. “That’s why a key step to successful outsourcing is the vendor vetting process. Some organizations may be able to offer more hands-on and others may have more depth of resources.

“And remember, just like frequent turnover can wreak havoc on an internal department, problems can be amplified when dealing with outside companies. Ask potential vendors how they develop the careers and retain the staff that they have. Ideally, you want them to develop the intrinsic knowledge that can only come about through experience.”

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