As a law firm owner, you might have felt the pinch already—yes, we are talking about how difficult it has become to hold on to your top talent. But the talent war is just one of the challenges that law firms in the US are grappling with currently. And, if we are guessing correctly, these challenges have been instrumental in making you look to outsource legal services.
Challenges Facing Law Firms
But before we can say how outsourcing legal support services can be a game changer or a source of strategic advantage for your business, let’s first take a step back to understand the challenges that law firms are grappling with:
- Talent Crisis
The unemployment rate in the US was at a historically low level of 4.2% around July 2025. This has resulted in law firms fighting fiercely, especially for top talent. The potential deportation of 8.3 million immigrant workers has further strained the talent pool and pushed up compensation rates. Compensation increased by 6.7% in the first nine months of 2024.
Adding to the woes is the fact that the number of new candidates applying for law degrees remains lower compared to the 2004 peak. This means that the talent shortage will continue to plague the industry over the coming years. Chronic understaffing has also increased stress and burnout among workers and pushed up turnover rates.
As much as it is hard to onboard talent, retaining them post-hiring is equally difficult. This is because the shortage of fresh talent has increased lateral hiring, with law firms prioritizing lateral entry of partners and associates to fuel expansion.
- Regulatory and Compliance Hassles
For law firms, compliance hassles have increased manifold in recent years. Modern law firms are required to comply with a host of regulatory obligations surrounding client data. Practitioners are required to comply with privacy laws (HIPAA, state privacy statutes, and more) and confidentiality rules. Additionally, the cybersecurity burden has increased significantly for law firms over the past 15–20 years, making it mandatory for them to invest heavily in staff training, vendor management, and secure systems to avoid breaches and regulatory penalties.
- Operational Inefficiency
The third big challenge for law firms is operational inefficiency. Over half of lawyers report spending a disproportionate amount of time on administrative and non-billable tasks like data entry, billing follow-up, document preparation, and more.
Moreover, law firms have also not been fully able to leverage the benefits of adopting modern tools, with many lawyers complaining of platform fatigue due to juggling multiple disconnected tools.
- Profitability Pressure
Law firms are also under huge profitability pressure. Inflationary cost increases, coupled with payroll hikes, investment in AI, and headcount increases, have put an extra burden on the bottom lines of most law firms. Also, profitability depends on the hours worked by a lawyer. However, as client demands fell, firms continued to hire, leading to a drop in productivity and profitability.
Outsourcing as a Source of Strategic Advantage
In the above sections, we have talked in detail about the four top challenges law firms in the US are currently facing. Now, we will discuss the solution—outsourcing. Yes, outsourcing legal services can be a strategic advantage for your business. Here is a list of points that showcase how your business gains when you outsource legal services: –
- Savings
The most prominent advantage of outsourcing lies in cost savings. You can outsource legal support services at a fraction of local hiring costs and save precious dollars, which can then be invested in marketing or technology to give you strategic leverage over the competition. Moreover, you also do not have to carry unnecessary real estate on your balance sheets, meaning lower lease rentals and more cost savings.
- Faster Hiring
The talent crisis is a reality in the US, leading to long hiring cycles and forcing firms to hire candidates even in the face of subdued demand to create a buffer. This leads to increased OPEX and higher pressure on the bottom line. However, you can avoid this by switching your hiring model to outsourcing.
- Flexibility
You can outsource legal services when there is demand and stop at other times. This means you don’t have to unnecessarily carry an inflated payroll around the clock, giving you more strategic flexibility.
- Synergy
You can choose to outsource legal support services so that your in-house talent can focus only on core billable tasks. This gives you increased operational synergy and efficiency while reducing profitability pressures.
- Strategic Guidance
Your outsourcing partner not only helps you save costs. They have several years of experience helping businesses like yours. This helps them provide you with strategic guidance and consultancy whenever you need it.
Final Words
US law firms are grappling with a shortage of top law graduates, making it extremely difficult for small and medium businesses to hire and retain talent. And this fact holds not just for hiring law graduates as partners and associates. There is also a steep demand for specialists in other domains, like pricing experts, data analysts, and tech specialists, to support modern practices.
Additionally, law firms also have to deal with increased regulatory and compliance hassles, operational inefficiency, and profitability pressure. This is where outsourcing legal services can prove to be a great source of strategic advantage for your business. When you outsource legal support services to Remote Resource®, you save operational expenses, grow faster, and become more agile.
Additionally, the Remote Resource® team acts as a partner and guides your business through thick and thin, helping you reach your goals faster. So, what are you waiting for? Your competitors are already achieving scale and unlocking agility by leveraging specialized talent through outsourcing.
It’s your time now! Hop on a free call with our experts and get started with a one-week free trial.
