My Preliminary Reaction To the Legal Outsourcing Rumors
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.
November 1st, 2007 at 12:59 pm
Established law firms and old school parterns may not like to change. But their clients are agitating to save money. And younger, more aggressive law firms are often looking to exploit new opportunities, technologies and options.
The temporary attorney and document review business has evolved over the years and will continue to evolve. The big question for everyone in the field is, “Will I be losing my job to a low-paid, outsourced temp?” Only time will tell.
November 1st, 2007 at 6:53 pm
I agree with Max above. As The Posse List pointed out a few weeks ago, it is client driven. For instance, a number of Posse members work for GE directly through GE’s in-house legal department. GE has made it quite clear (to their outside law firms and others) that they intend to move 90% of their legal processing work to India and other offshore centers within 1 year. They made several careful studies of LPO (legal processing outsource) operations in India and are quite pleased. GE has survived by cost cutting and bucking established, conservative patterns. And they are but 1 U.S. corporation using India. This trend has emerged because legal firms, legal departments in large business organizations, and legal publishing and research houses based in the US are increasingly turning towards India to source services. The cost savings is clear. Agreed: super efficient software is the nearer threat. But if you go to Mumbai, and Bangalore and Vadodara you will very sophisticated operations and very motivated lawyers. A threat just as keen.