Pennsylvania Firms Not Looking To Move Back-Office Locations
India or Pittsburgh?
About 11 years ago, Reed Smith Chief Operating Officer Gary Sokulski looked at whether to off shore some of the Pittsburgh-based firm's business operations, such as word processing, where there were multiple people handling similar things across multiple offices.
The firm looked at Chennai, India, a hub of outsourcing activity for U.S. corporations. But when weighing the efficiencies, quality-assurance concerns and the idea of being committed to the economies of your local communities, Sokulski said the firm decided that wasn't the right move for it at the time. He said it has also come to bear that over the past decade the inflation rate in India has eaten away at some of the cost savings that might have been realized.
So Reed Smith scrapped the plans for India and instead created its Global Customer Centre in a separate office building in Pittsburgh.
"We had a uniqueness, us and K&L [Gates], that our marketplace had a very high blue-collar work ethic along with a very low cost of living, cost of housing, cost of people," Sokulski said.
Reed Smith took people out of its higher cost locations across the country and moved the word processing, marketing, accounting, human resources, information technology and now e-discovery review, to the GCC. The building is five blocks from Reed Smith's main Pittsburgh office. It's cheaper to rent, more dense, the employees dress more casually and many of the services are available 24/7 or 24/5, he said. There are now more than 300 people working in the GCC.
Sokulski said the firm's aggregate operating cost per attorney is about $75 million less a year than its competitor firms. A big part of that is because of the savings realized through the GCC, he said.
Sokulski said he is always evaluating whether there are better cost options for the firm and its clients and part of that evaluation is whether he should move 300 jobs somewhere across the world. But Sokulski said he is very comfortable that the firm is in world-class space where it is.
The next article in the Thinking Small series will focus on how law firms are re-examining the amount of and way they use office space.