© 2004 Baker Robbins & Company

IT Outsourcing in Law Firms: Threat or Opportunity?

An Overview of Market Issues

and Baker Robbins’ Sourcing Services

IT “Sourcing” Defined

Sourcing assessments are an aspect of

IT planning.

Sourcing is about improving IT effectiveness and value and making informed decisions.

Sourcing assessments don’t push a firm to outsource.

Sourcing involves defining services, service level agreements and performance measures.

Market Expectations

Service expectations are increasing

Few firms have outsourced to save money

Some firms are using service levels and ‘cost of services’ information to deliver services better internally

Market is immature Firms are not experienced in engaging suppliers

Suppliers provide poorly fit bids

IT Services Subject to Sourcing

Primary Areas Today Help Desk Level 1 – offsite or onsite IT Operations and Support (Almost) Full IT Department Business Continuity WAN Management

Additional Areas of Opportunity Storage Management E-Mail and Document Management Phone and Voice Systems Business Processes

Top 250 U.S. firms

Market Overview: Current Status

50% - Open minded; generally need to be facing changes to make an outsourcing decision

10% - Already partially outsourcing

40% - Will not consider outsourcing

Market Overview: Suppliers

Legal-specific:

Aspire.net (Union Square)

Thomson

Intelliteach

Bowne

KKL/LexisNexis

Office Tiger / Hildebrandt

Steelpoint and Ringtail

Niche players

Savvis, NetDocuments, HubbardOne

Big players and BPO:

Perot, IBM, Deloitte

Sourced Performance Indicators

Service Levels

System availability: 99.97+%

Help desk response time: 20 seconds for phone calls; 15 minutes for e-mails

Guaranteed problem resolution times (2 hours for Severity 1 systems)

24x7x365 operations

Optional off-site, centralized operations

Standardized PC and server builds for centralized operations

Business Performance Indicators

User and management satisfaction

Adaptability

Collaboration with internal staff or other suppliers

Opportunities We can control how outsourcing is used

We design and manage the solution

60% of our sourcing clients will turn to us rather than an outsourcer

Creates projects in smaller firms where little opportunities previous existed

Outsourcing can cannibalize our services.

We decided to get ahead of the curve rather than wait for it to

happen to us.

Baker Robbins Services

Assess Opportunities

- Evaluate Service Levelsand Costs

- Compare to ExternalBenchmarks

Design Solution

- Improved Processesand Service Levels

- Establish BusinessContinuity Solutions

Select Suppliers Manage Transition

Lead IT Improvement Projects

- IT Upgrades, Interim IT Positions,Business Continuity, etc.

Resulting Projects

Network Design (e.g., centralization, capacities) Continuing IT Planning Business Continuity Planning Transition Project Management System Migrations IT Organizational Improvement Projects Business Impact Risk

Projects during the outsourcing term

Spotting IT Sourcing Opportunities

Signs to Look For Firm Examples

Poor service levels, lack of IT processes, inconsistent service across offices

Proskauer Rose

Aggressive firm growth or mergers; office moves or expansions

Piper Rudnick

Major new technology changes

(storage, Server 2003, disaster recovery)

Andrews & Kurth, Norton Rose

Small or medium firms who want professional IT like a big firm

LeClair Ryan,

Frommer

IT moving away from infrastructure focus; management doesn’t want the hassle

Hunton & Williams, Linklaters

Long Term

Can BRCo make projects out of closing gaps in IT performance we do not focus on today?

Can BRCo complete a full IT transition and hand over only support to an outsourcer?

Should BRCo outsource IT services?

Can BRCo outsource business processes? Business analysis capabilities Financial processes Litigation processes Enterprise content management (DMS + RMS + E-Mail)

Points to Take Away

Sourcing Assessments = IT performance and value

Use term “outsourcing” sparingly

Good IT management benefits from sourcing

Even firms with no interest in outsourcing should know services, service levels, costs and risks