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India Legal Outsourcing: The Next Wave?

by Brandi Moore on August 6, 2010

Mainstream Americans are becoming aware that one of our highly esteemed professions is being sent off shore.  Law firms are outsourcing by heading to India.  Offshoring legal work to India is talked about in whispers around me at cocktail parties “is it true?” An insurance advisor recently told me ”its against the rules of their insurance policies.”  Others scoff at the idea of outsourcing such important tasks–how can something so critical be sent off shore?  Aren’t the culture differences too great?  What about education?   One technology provider told me recently that the tools for document review have become so advanced that the costing that made India attractive is no longer relevant.

The NYTimes article this week breaks open the real trends in this outsourcing vertical:

  • India’s legal outsourcing vertical is experiencing lightening growth
  • India is successfully recruiting American lawyers to lead a team of Indian lawyers (end running concerns about dispensing advise outside of India)
  • Corporations WANT this.  Right from the mouth of GE: “You don’t need a $500-an-hour associate to do things like document review and basic due diligence”

In a culture that regards legal process with such high esteem, the transition of these services is bound to cause consternation.  America is the most litigious society in the world.  But the economy has forced this issue to the desks of many law firm partners who watched competing firms fail last year.  Newly graduating law students are not finding jobs because firms are not hiring.  The economics of the decisions around outsourcing to India for legal tasks are the same as any other industry.

Legal outsourcing is going to continue.  American based lawyers will be the new IT managers, moving up the chain in responsibility with additional remote employees to lead.  These lawyers will need to be cross-culturally savvy, something they did not focus on in school, to lead their diverse workforce.

There will always be room for top talent that comes from places like Harvard, etc.  But other law students should be wary as India continues to hire on lawyers from inside its country, convince NRI’s to return home, and woo Americans away from the US it will expand its breadth of services making it tempting for law firms to resist the margin.  This is compounded when American companies demand firms take action on fees.

I want to highlight a comment to the article posted by Russell Smith who talked about how this shift, allowing cheaper labor to be involved in litigation, is changing the dynamics of access to the American legal process.  Smith’s point of view is that companies are now engaging in the legal process instead of settling for costs.  This is such an important point of view its unfortunate the reporter did not pick up on this angle.  Russell’s blog is here: http://lawwithoutborders.typepad.com/legaloutsourcing/

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{ 1 comment… read it below or add one }

Brandi Moore August 6, 2010 at 4:28 pm

I just received a good article to add on to this one — adding credibility to the rumors around what is really happening in the industry: According to the ABA 83% of firms that were asked about outsourcing refused to provide any information.

http://www.abajournal.com/news/article/are_top_us_law_firms_outsourcing_their_work_83_wont_say/

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