Outsourcing companies may send work across street

After seven years in business, Message Broadcast in Newport Beach, Calif., grew to need more legal assistance than its outside law firm had time for. But the marketing firm still didn't have so much legal work that it needed to hire a full-time general counsel.

Instead, the company decided to outsource the work — not to China, but to Orange County, Calif.

Enter The General Counsel, an Orange County firm that goes to clients' sites to fill the gap between companies that need only occasional legal advice and those that must hire a staff attorney.

Message Broadcast gets experienced, cost-effective legal help, and The General Counsel gets to include Message Broadcast in a broad base of customers that provide it with consistent work.

Outsourcing is often equated with sending work to other countries. But studies about outsourcing — such as a report from consulting firm PriceWaterhouseCoopers that 73 percent of U.S. executives outsource at least some business processes — typically don't distinguish between work sent halfway around the world and what's sent across the street.

While the motivation to send work to foreign countries usually is saving money, domestic outsourcing often enables small or growing companies to tap greater expertise than they could afford to hire as employees. It also gives them greater flexibility when their workload spikes temporarily.

Marketing and human resources are among the functions that businesses most frequently handle through domestic outsourcing.

In contrast to companies that outsource abroad, flexibility rather than cheap labor is the greater motivation for companies' outsourcing to local third-party providers.

Filenet, a Costa Mesa, Calif., software company, has 100 marketing employees worldwide, but hires The PowerMark Group, a San Juan Capistrano, Calif., technology marketing firm, for special projects such as planning its recent user conference in Las Vegas.

"I expect outsourcing to smooth out the peaks and valleys, so I don't hire people for the whole year to do three months' work," said chief marketing officer Martin Christian.

Domestic firms that handle outsourced tasks tend to have experienced people in specialized areas, said Denise Chavez, chief executive of Conduit International, a Long Beach, Calif., marketing company.