As more processes of managing a business become digital, legal firms are using business-process outsourcing and legal-process outsourcing to cut costs, run more efficiently and automate tasks.
"We are constantly looking at ourselves," said James Reynolds, vice president of client services for Peak Outsourcing. "Is there some way to apply some AI machine learning type of approach to actually even make this more efficient and make it easier, not only for our clients but for the people we contact to help the process and our own employees?"
Peak can "simplify the job role for them, make it easier, take some of that kind of lower-hanging easier work and kind of automate the way and really have them focus on the more difficult tasks that potentially just can't use automation because it is so, so complicated," Reynolds said.
An estimated $230 billion is spent on managing business processes worldwide, according to the McKinsey Institute. Currently, outsourcing items that are explicitly next-generation technology account for only a small amount of that $230 billion. But an analysis of 53 business process outsourcing deals between 2016 and 2020 that pulled from 200 transactions showed that one-fourth of these transactions were composed at least one digital component.
Furthermore, an analysis of the total contract value (TCV) of digital services from 2016 to 2020 shows digital services as having grown from 30% to 70% with new deals that included digital components having increased nearly 50%, the McKinsey Institute said.
There has been significant growth in legal process outsourcing and the digital component growth in cloud technologies, according to McKinsey. In 2020, the McKinsey Institute analysis showed cloud-enabled deals peaked at 67% of TCV in the private sector and 63% in the public sector. Business and legal processing management services or outsourcing company is used in platform cloud services to reduce incentive processes, lower data loss, create easier management of process organization and tracking and improve customer experience.
The McKinsey Institute analysis found that using digital and automotive pools in renewing outsourcing processes and outsourcing contracts unlocks three times the financial impact of traditional outsourcing arrangements. It also improved the experience for customers, provided more efficiency and fostered collaboration and shared accountability.
The analysis found that four factors are crucial for the success of outsourcing deals: Focus on transforming operations through digital processes, shared incentives aligning to innovation, joint accountability for digital transformation and adoption and redesigning digital journeys end-to-end.
While industries transform their operations into digital processes, pay has also shifted to be based on the delivery and outcome produced. As a result, companies can better structure deals through incentivized innovation which ultimately aligns with the efficiency, effectiveness and experience as well as increasing profits for an organization.
Processes are increasingly being overhauled and redesigned, allowing companies the ability to capitalize on the digital growth trend. Companies can no longer just outsource a single part of a process to see improvement, but instead, have to create the entire end-to-end process for the best impact and high impact overall, according to the Institute.
The digital transformation of processes in the legal world also allows for joint accountability for the transformation's adoption. As the process being outsourced is digitized, firms and companies now have more decision-making power and oversight of the process or its data and KPIs. It allows closer coordination with customers and partners, according to the McKinsey Institute.