Why Outsource your Legal Services

The advent of the computer saw a major shift in dealing with legal matters by law firms and their clients. The trend brought about COVID of on-line working has accelerated even further legal thinking on home working. Many consultants to the legal profession have argued for years that the current approach to the practice of law is outmoded and needs to be changed. Has COVID made Romanian commercial law firms more aware of the possibilities and the new ways law firms and their clients can work together.

The first thing to consider in Romania is the practice of law itself. There is no doubt that lawyers brought up and educated in the Civil law and Code system of Europe consider and see law in a very different way from those brought up in a common law environment. It seems to me that Romanian lawyers are far more independent in their thinking regarding the practise of law and do not feel the need for an office structure with many lawyers for the practising of law. Common law lawyers take the opposite view and feel the need to co-operate with other lawyers so that there is a rigorous examination of a legal argument rather than referring to the interpretation of a Code.

Considering the changes in respect of home working which have been brought about by office work due to COVID how will this affect business in Romania and other European countries.

In Romania many commercial firms because of their history have or feel that they need to have an in-house legal department sitting in their factory or office waiting for legal problems. One can now ask the question why? An in-house legal team can be wasteful and expensive and is not a profit centre.

Some companies in Romania have in the past asked their outside law firm to supply lawyers for the company rather than hiring their own legal advisor. This is cheaper and does go some way to providing legal advice in many legal fields without incurring large expenditure. A commercial lawyer leased from a Romanian commercial law firm only requires the client to pay a fee for the lawyer to the law firm. There are no employee taxes involved No income tax payments or social security payments. This can drastically reduce the costs of the company of having legal advice. All the costs of employing an in house lawyer disappear. A law firm with collaborators means that the lawyers’ costs and expenses are dealt with by the law firm administration. This means that the client has a reduced cost access to law.

In my view even this will be an outmoded model within the next five years. COVID has accelerated a new way of think about the law and how it works.

Many in the legal profession have had at time to work from home because of lockdown. Has this method of working caused issues for the clients in Romania and I would answer no.

I believe that over the next few years as law firms both in the west continue to develop their own new business models of ownership and management this will overflow into Central and Eastern Europe. Why does a Romanian law firm require expensive offices and large reception areas. Who pays – the client. Do the clients really need this type of show? Some clients will, but as time progresses I think that they will move away from this model. I can only quote the examples of Keystone Law and GunnersCooke in London as an example as to how businesses may develop. Both these organisations provide for their lawyer’s administration and meeting facilities but they do not provide offices and desks on a permanent basis for the lawyers. The lawyers come to the office when they need to use the firm’s facilities such as conference rooms or a meeting point. The other times they work from home. If they need additional legal support then they can contact other members of the firm to assist them.
This has an important message for businesses in Romania.

I would propose that companies in Romania rather than hiring expensive legal advisors or lawyers to work in your firm, why not buy a number of legal hours from an established law firm in Romania. This will enable you to cap your expenses for legal services from month to month and help with budgeting. The internet and ZOOM mean that you can always be in Contact with your chosen lawyer/law firm; you can meet with them on the internet.

The fees that are charged should not reflect that you pay for large offices meaning that there is a saving on your legal costs. Rather than taking a contract down the passage to the “Legal Department” for review – it is sent by email to the chosen lawyer. The chances in reality are you will get a response quicker. If there are issues the lawyer can consult with other lawyers in the firm without you incurring additional fees because you have bought hours of legal advice. Further if you buy hours of legal services from a law firm in this way you will have access to the expertise of many lawyers.

The Romanian law firms themselves will have to change. As mentioned above out go offices for lawyers to work in. A firm will need to have a finance and administration centre as well as conference facilities on site. All other inter office communications will be dealt with using the web. The question of control of the lawyers will need to be addressed by the management of the law firm, but this can itself be covered by meetings at the administrative office.

Will this concept catch on in Romania? You only have to look to the US and Great Britain to answer that question. Hybrid firm with lawyers based other than in an office are opening up. If you listen to the management of these firms and you will hear the message that the lawyers like the system and are therefore more productive.

Based on our experience and the enquiries we have made it is clear that whether you are in London, Bucharest, New York, or Sofia the only reason for law firms to have offices is that there is a point of reference both for clients and employees. Will these solutions work in Romania? I cannot say with any certainty what will happen, but I do believe that some hybrid model for delivering legal services will develop in Romania in the next few years.

About Nicholas S Hammond

Nicholas is an English solicitor who has been practising in Romania since 1990. He has been a partner in a number of law firms in Romania as the principal partner. Hammond and Associates trading as Hammond Partnership is the culmination of many years experience.

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