One theme of legal technology and this blog is outsourcing: Orrick’s move to W. Va. (May 30th), downtown v. suburban offices (June 1st), the move of professional work off-shore as reported by Fortune (June 14th), Dorsey & Whitney’s move to outsourced document management (June 18th), and the move of legal work to India (July 10th).
In Zapped by Outage, Firms Scramble to Cope, the Recorder (8/15/03) reports on the impact of the Northeast power outage on law firm operations. The lead sentence aptly summarizes the situation: “One of the problems with going global is that when disaster occurs in some far-flung locale, every corner of the law firm is affected.” In spite of preparations post-911, the article reports that several law firms experienced significant disruptions firm-wide because key servers are located in Manhattan.
One benefit of outsourcing computer services is that power outages are less likely to disrupt the operations of an entire firm. Take as an example Dorsey & Whitney, which is migrating its document management system to an outsourced service. The firm’s documents will reside in a highly secure facility that has power back-up and a mirrored back-up site. The likelihood of their documents going offline is very low. Of course, any Dorsey office in power blackout zone might be out of commission, but other offices would be unaffected. Contrast this to a firm whose primary document servers reside in Manhattan. When key services are outsourced, it’s even possible that those in the blacked out area could do some work. For example, my brother, who lives in Westchester and works in Stamford was able to use his notebook PC (battery powered, of course) and a dial-up connection (the phones continued to work) to finish essential work.
When law firms consider their back-up and outsourcing options, it would be wise to factor in the cost of business disruption. Firms with central operations in the affected area will now have the potential to quantify the cost of disruption. Once the emergency is over, finance departments should be able to analyze time billed to determine if the outage reduced billable hours or merely shifted them forward to the weekend and subsequent weeks. Even if an outage of less than 24 hours does not reduce billable hours, there is the service element to consider and the value to clients of being able to operate continuously.
I do not mean to suggest that every firm should outsource all of its computer operations. But firm and IT management should explicitly consider the possibility and carefully weigh the costs and benefits to reach a conscious and well-reasoned decision.