kitchen table math, the sequel: outsourcing legal work

Thursday, August 5, 2010

outsourcing legal work

My friend R. has been telling me about this:
NOIDA, India — As an assistant attorney general for New York State, Christopher Wheeler used to spend most of his time arguing in courtrooms in New York City.

Today, he works in a sprawling, unfinished planned suburb of New Delhi, where office buildings are sprouting from empty lots and dirt roads are fringed with fresh juice stalls and construction rubble. At Pangea3, a legal outsourcing firm, Mr. Wheeler manages a team of 110 Indian lawyers who do the grunt work traditionally assigned to young lawyers in the United States — at a fraction of the cost.

India’s legal outsourcing industry has grown in recent years from an experimental endeavor to a small but mainstream part of the global business of law. Cash-conscious Wall Street banks, mining giants, insurance firms and industrial conglomerates are hiring lawyers in India for document review, due diligence, contract management and more.

Now, to win new clients and take on more sophisticated work, legal outsourcing firms in India are actively recruiting experienced lawyers from the West. And American and British lawyers — who might once have turned up their noses at the idea of moving to India, or harbored an outright hostility to outsourcing legal work in principle — are re-evaluating the sector.

Outsourcing to India Draws Western Lawyers
Published: August 4, 2010


AnonymousFrustratedLawyer said...

It's been going on for a while.

Most big firms do not have their associates read documents. The big firm hires a staffing agency, who then assembles a bunch of lawyers on project basis.

- firm bills client @ 150/hr for doc review attorney
- agency bills firm 75 an hour for doc review atty
- doc review atty makes 30-35 an hour

For a long time this was a profit center for big firms. (Howrey comes to mind)

This outsourcing primarily hurts young attorneys who graduate law school with little more than how to research cases.

The important stuff like finding and dealing with clients, building relationships, running the practice, what to actually say in front of a judge, what the laws actually mean to real living people - the typical law school expects the lawyer's first employer to train them how to actually practice. This is much different than medical school, and sadly more like business school.

But law schools are a major source of profit for the university, because the facilities aren't technology heavy and they norm is 100 students to 1 professor, with only 1 exam at the end of the semester.

Most people outside the profession think that the new lawyer can just open up shop.

But most law schools teach a mandatory course called Legal Ethics - in which the student hears case upon case of newly minted attorneys making mistakes and being disbarred.

Mamas, don't let your babies grow up to be lawyers

Anonymous said...

If the bits can be sent over a wire (heck, or burned onto a DVD and mailed), then the job is a candidate for off-shoring. Examples include:
   *) Programming computers,
   *) Accounting,
   *) Tax Prep,
   *) X-Ray/MRI/etc analysis,
   *) Animation,
   *) Customer Support,
   *) Stock Market Analysis

The off-shoring is not guaranteed, and if tried it may still, fail, but the possibility is there and this makes things a bit different than 30 years ago.

Additionally, *ALL* manufacturing is at huge risk for going off-shore, with the standard caveat that success is not guaranteed. *This* has been going on for a long time.

Still, some things can't be off-shored (at least not yet) or can't be off-shored easily.

Porn production can be off-shored (and I would expect that East European actor/actresses would cost less ...), but the local hooker isn't in much danger of losing her job to someone in Bangalore or Prague.

The pipes used by the local plumber might have been made in China, but the plumber isn't going to face any competition from China when your plumbing needs fixing.

As nearly as I can tell, there are two "defenses" to having a job be off-shored (or at least put at risk by off-shoring):

  1) Be *VERY* good at what you do. Your competition outside the US is often cheaper than you are, but if you are better you can still come out ahead in the cost vs. value game.
  2) Do something that needs to be done locally.

Category (2) will probably be at risk going forward as clever technologists find ways for things to be done remotely that used to be done in person, but it still beats competing with Indians for call-center work or with Chinese for textile jobs.

-Mark Roulo