Academic

Legal Services Outsourced To India

By Dan Filler

The Washington Post reports today about the outsourcing of legal services to attorneys in India.   This can't be unexpected news; costs are much lower in India.  And since much of the work product can be delivered instantly, via email, the industry seems reasonably well-suited to international outsourcing.

According to Russell Smith, whose legal outsourcing firm SDD Global Solutions apparently does some amount of Hollywood legal work, "my people in India can do everything from here, except sign the opinion letter and appear in an American court." Apparently the most fertile site of outsourcing - no shock - is the vast world of discovery and document review.  Why have fifty contract attorneys in a some high priced New York (or even Newark) office tower look for hot docs when attorneys in Hyderabad can do the same thing for less than half the price?

Attorneys are creatures of the guild, and many will probably respond: what about unauthorized practice issues?  I am certain that some state bars will make efforts to prohibit this outsourcing.  Still, it may be hard.  In many law offices, paralegals do these sorts of tasks - everything from discovery to basic drafting.  That's kosher because a lawyer supervises, and signs off on, the projects - as he or she does with outsourced work.  Any bar regulation clamping down on international outsourcing might therefore have signficant collateral effects on existing practice structures.  While large firm lawyers are the most likely victims of international outsourcing, the state bar rank and file - lawyers in small and midsize firms - may have less of a stake in this battle and might be more protective of their own cost-control schemes.  (In small firms, an experienced secretary often "practices" law.)

Will anything stop this practice?  I suspect that if there is a brake, it will be the market.  I imagine that first-rate quality control will require having supervising lawyers physically present at these international sites.  That is a cost - and not necessarily a simple problem if you're Cravath and want a Cravath-quality lawyer on site.  Then there is the reputational risk.  Big firm billing rates can only be supported by a guarantee of exceptional quality.  When I was clerking, I always had the sense that top firms were billing thousands of dollars to insure perfect footnotes (that virtually never changed the outcome of a case.)  The only reason for a client to pay this money is to create a near perfect assurance that it has obtained the best possible outcome in a matter.  But it's very hard to figure out if you've actually received this level of service.  Consequently, firms need to find signals to convince clients of their quality.   These signals range from office location to the hiring of Harvard Law graduates.   The mere act of international outsourcing may undermine client confidence.

At the end of the day, however, it seems clear that there is a market for these services.  In-house counsel will identify those matters that justify fully-domestic work and demand outsourcing of other projects.  In some cases, in-house counsel may retain firms in places like India to research and write to the her strategic preferences, and ultimately sign the papers herself.  If SDD Global Solutions can deliver high quality technical services, there are bound to be some clients who'd rather keep their money than deliver it to BigLaw.

Photo: the High Court of Hyderabad.

Full post as published by The Faculty Lounge on May 11, 2008 (boomark / email).