My Attorney Blog

The recent rumors of legal outsourcing have been sending small shivers of concern through the minds of many contract attorneys. I know I’m not immune to it myself. Outsourcing is not a new phenomenon but when it affects your profession, it becomes very personal and real.

Honestly, it is not difficult to see why law firms and corporations would want to move their man power intensive legal work offshore to countries that command much lower wages. By outsourcing their work overseas, law firms and companies can potentially and substantially decrease their cost of intellectual labor. The natural place to outsource document review is India, an English speaking, low wage, and low cost of living destination. Due to tremendous language hurdles, other low labor cost countries like China or Vietnam would not be feasible so India is probably the best bet.

Despite stories of legal outsourcing that we’ve been hearing about recently, why am I not concerned that the outsourcing movement will affect the contract attorney market substantially? That’s because I don’t think the established conservative legal market will readily accept this type of employment and cultural shift. I also don’t think legal work is as easily exportable as other fields that have been outsourced such as customer service and information technology. This is just my own preliminary take on the matter.

The Conservative Legal Culture Will Resist

The world of law firms, partners, and associates is a very old fashioned and traditional profession, steeped in conservative values. Unlike the private corporate world, law firms have been very resistant to modernization of its cultural norms and old ways of doing things. For example, while corporate America has generally embraced a greater push towards diversity in the workplace, law firms have been very resistant to change, as minorities as a whole still comprise less than 10 percent of all attorneys.

Law firm partners are also generally very old fashioned and I feel they will be very resistant to such employment shifts. Law is still practiced the same inefficient way it has always been practiced. It’s only recently that some courts finally began accepting electronic filing for example. The old bigwigs will not be entirely embracing of the idea of sending tons of privileged and confidential legal work product to a third world country and allow some locals, who they will never meet in real life, ready access to such privileged information.

There will be always be trailblazers in the legal field who will attempt to migrate some legal work overseas, but I truly feel this movement hype will ultimately subside.

Other Outsourcing Attempts Have Not Entirely Succeeded

The concept of outsourcing work to a country with cheaper labor costs is nothing new. But the reality is that outsourcing is fraught with serious confidentiality and adaptation difficulties. There is also the hidden cost of customer attrition. Many companies who have tried to outsource their work overseas have not been entirely successful. They have also not reaped the overall financial benefits they initially expected when they began their outsourcing efforts. Many have ultimately brought the work back in-house.

It’s interesting to read a few stories of outsourced work to India but I just don’t see it happening successfully on a grand scale. Instead, I think the greatest long term threat to the current document review attorney market is technology itself. One day, perhaps many years from now, it is possible that reviewers may be replaced by super efficient software that can keyword sort through documents at lightening speed, completing work in a few minutes that would have taken a lawyer hours or days to complete in the past.

The market will continue to adapt over time and so should we.

I’ve always believed that the efficient contract attorney can best improve his or her professional prospects by diversifying his or her skill sets and abilities, whether it be by acquiring an accounting background or improving a pre-existing language skill. I suppose another way to broaden one’s employment choices is to change fields altogether, although that’s something I wouldn’t consider myself.

I’m writing in response to today’s Wall Street Journal follow-up article on Monday’s piece regarding the dismal state of the legal employment market. The follow-up article reported that Seton Hall law graduate Scott Bullock, the first lawyer quoted in the original article, has finally jumped ship, quitting his law firm job and joining a former high school friend to work as an electrician. The article reported that he’ll be paid the same as his former lawyer job, about $50,000.

Contract Attorney Work Can Be A Great Stepping Stone

Is that how far the attorney job market has deteriorated? We now have lawyers quitting their jobs to become electricians. I wonder why doesn’t he work temporarily as a contract attorney until he gets back on his feet? Many contract attorneys perform document review work for short stints while they plan out their future. It is much easier to plan for the future when you are actively working and paying the bills than when you’re just sitting at home all day, moping about your plight. Performing contract work will keep you productive during the day so you don’t completely fall out of the legal loop. Despite what some may say, document review does entail the practice of law, albeit in its lightest form.

Working as a contract attorney is still a job, and indeed it’s a well paid job. The work is not particularly stressful and there is usually time after work to develop other side opportunities. The wage rate and hours are generally very good and the hours are flexible. Taking time to develop your side business or consider future projects can be performed during your non-working hours. I even see some do it at work during their breaks, talking on the phone to clients of their part time real estate business or like me, typing on this blog during my mandatory lunch break.

I know some contract attorneys have grown very disillusioned with being an attorney and have chosen to exit the legal market altogether. However, I am concerned that these people are wasting the time, money, and effort they previously invested in their legal education. Yes, a law practice is not for everyone, but that doesn’t mean you should ditch everything you’ve learned altogether and go become an electrician. That is, unless being an electrician was your original calling. But for most people, they should keep finding a way to put their education to good use. There are related opportunities out there.

I’ll admit, I haven’t decided exactly what my next professional move will be, but it certainly won’t be what the attorney in the Wall Street Journal Article did. I truly wish him well if that is what he wants to do, but as for me, I didn’t rack up law school loans for nothing! My future move might not necessarily be a legal practice but it will at least have some tenuous connection to my education and previous legal experience.

I’m disappointed to report that the D.C. contract market is beginning to noticeably slow down. But keep your spirits up because there are still ongoing projects and a few are still in the market pipeline. When 9/11 occurred, the contract attorney market saw a major contraction and halt in the number of projects. Major contract attorney market recessions have historically lasted several months before ultimately recovering. If you are currently on a project, be diligent in your work and stay on board for as long as possible, and you may ride out this one. For those seeking employment and looking for projects, I truly sympathize. The market situation is affecting us all.

I’m sure many contract attorneys are also members of The Posse List, and if you haven’t already done so, I highly recommend registering for their e-mail listserv. They protect the identities of their members and offer plenty of contract attorney employment related information. You may have already read the recent market status e-mail from them, but here is the excerpt:

Yes, it is very slow. Things have tightened up for a few reasons, and the mega-attorney projects are far and few between. We believe it’s based on the following reasons:

1. The financial market turmoil has put a number of projects on hold. We discussed the situation with our contacts at various DC and NYC law firms (associates and staff attorneys we have known a long time who are in the loop on projects that will need contract attorneys) and they pretty much hone to the same line: “the deals that must be done by fiscal/calendar year end December 31 are in progress. Everything else can wait”. If you monitor DealBook, Deal Digest, and Deal.com you get the same story. Postings for contract attorney work on Craigslist and Monster.com are also down for DC, NYC, LA, San Francisco, and Chicago.
2. The new changes in the DOJ/FTC review process (instituted last year) have cut-down on the number of attorneys needed for projects, as well as the review time needed for those projects. For example, Google/DoubleClick, a huge deal, got done with a total of 80 attorneys on both sides. (later corrected to 90 on the Google side and 40 on the DoubleClick side)
3. We monitor Hart-Scott-Rodino filings, and they are also way down. Angela also tracks corporate activity through SEC filings via our Edgar search programs and activity is quiet.

   That does not mean nothing is going on. Based on D.C. Posse member feedback, we count between 10-15 projects out there, though all are small. NYC Posse members rang in with about 10 projects. There are not a lot of complex litigation reviews around but we counted about 3 in D.C. and 5 in NYC based on Posse member feedback. And there are a lot of small (1-3 attorney) projects.

   NOTE: We do not get/hear about/see everything. When the market is this slow, agencies can staff internally. And of course there’s Intel out in Falls Church.

   Markets will fluctuate. We saw this “dry” pattern post-9/11 through mid-2002. Our busiest listserv right now is foreign language, with Europe a close second. There are two large (comparatively speaking) reviews in Brussels: one in progress and about to ramp up. And before you swamp us with emails, the first prerequisites: you need to be an EU national with either a U.S. law degree or a U.S. LLM. Those projects are posted to our Europe listserv. Go to [The Posse List] to see/subscribe to our various listservs.

   The good news: of the 10 D.C. law firms we spoke with, we guesstimated they’d generate about 8-10 projects between now and end of the year. One of those DC law firm has 3 projects in the pipeline.

   The NYC firms saw about the same, but none are big projects. We will see it when we see it. As indicated, these were guesstimates.