LPO News

Calibration is the act of checking or adjusting (by comparison with a standard) the accuracy of a measuring instrument; “the thermometer needed calibration”. In other words, it simply means understanding your own needs.

Richard A. Hall, founder and President/CEO of Lex Tech, Inc., a legal information consultancy company, writes

“We calibrate or check to ensure that the instrument has retained absolute accuracy of performance. However, we also see an extension of this word as “recalibration” and its association with the business world, specifically with service provider relationships. Typically, recalibration involves starting with a failure of a particular model or relationship, identifying the problem, and fixing or strengthening it. Just as with calibration, recalibration in business can make or break a company.”

There is an increasing trend among the producers in the Western economies to outsource bulk and labor intensive work to countries where they enjoy substantial labor arbitrage. For small and start-up companies it means replacing the one-man office with a team of professionals working at a fraction of cost. For large companies, it is a way of increasing profits and fulfilling their moral obligation of keeping their shareholders happy. Additionally, business relationship with the service providers can be taken to the next level to tap and penetrate the local markets.

“In choosing to outsource, companies must fully evaluate their business needs, how outsourcing will contribute to the organization and the value of the service being outsourced. Many organizations outsource activities and functions which are not their core competencies.”

Contrary to popular understanding, outsourcing of legal activities has been commonplace in evolved economies like the United States. External counseling and opinion drafting are some of the frequent forms of services traded. In any area of business, the goal of outsourcing is to create greater operating efficiencies and ensure that internal teams are free to work on critical value tasks.

With the transition of businesses from “personnel management” philosophy to “human resources management”, outsourcing service providers are now being viewed as indispensable business partners.

“Outsourced law firms should be integrated into business activities and no longer viewed as a function that happens in a silo. In-house counsel gains specialized knowledge and a broader knowledge base from outsourcing. These relationships need to be effectively managed to ensure the continuing value and successful outcomes. The business aspect of outsourced relationships needs to be managed as well as the communication aspect.”

Your relationship with your business partners need to be constantly reviewed. Are the processes and methodologies being improved? Are you achieving the desired business results from the relationship? Are you achieving greater efficiencies by outsourcing? Work cannot simply be outsourced without a process of evaluation and measurement.

As for the service providers, they are no longer satiated with supplying services on a one-time basis. The outsourcing business has evolved and vendors have become highly-focused and sensitive to the needs of their clients. It is critical to build long-term relationships to sustain business.