Wednesday, May 24, 2006

Online Roundtable Discussing Outsourcing in the Legal World

Darryl Mountain sent me this link that has the transcript of an online rountable discussing "Inside vs. Outside: When Does it Make Sense for Law Firms to Outsource?" Great read for anyone interested in legal outsourcing.

The patrician panel comprised Ron Friedmann, Dennis Kennedy, Darryl Mountain, Stephen M. Nipper , John Tredennick, Wendy L. Werner, all known names in the legal technology circles.

Some quotable quotes:

I've talked to lawyers who'd like to explore offshoring document review and to CIOs who want to investigate outsourcing help desks. So in my experience, outsourcing is not hype but serious consideration of this option, however, does not guarantee rapid growth.

Office Tiger provides outsourced legal secretaries to a major U.K. firm at a 3 to 1 ratio. That isn't 3 attorneys to one secretary as you might expect. Rather, that's 3 secretaries to one attorney--round the clock secretarial support for about 30,000 Euros a year

I think the biggest impact on law firms that "outsourcing" hype will cause is increasing the rate at which clients question the fees their attorneys are charging them

An old adage says that lawyers are finders (business getters), minders (relationship managers), or grinders (ones who crank out legal work). Today, lawyers who are great at "client hand holding" typically rely on a partner or associate to do the legal work. Could the minder instead outsource this to a lawyer in another organization?

Anyone can put up a shingle as an outsourcer but you don't want to be their first client. Start with a small project and build from there.

Lots can go wrong. But lots can go wrong with performing functions internally or with people you hire as employees. With outsourcing, you typically spend more time specifying requirements and monitoring performance. Others can enumerate the legal and business risks of outsourcing but a key point is to weigh these risks against the alternatives. No option is risk free.

The costs of document review in discovery will kill the goose that laid the golden egg. Deploying armies of domestic lawyers to review documents is not sustainable. If document review cannot be "outsourced" to advanced software, then someone will figure out how to offshore this function to lawyers in India.

If you were to extend the trap door model, you could have a model where contracts are drafted in-house in the U.S., the Indian lawyer handles exceptions only, and the U.S. lawyer reviews the Indian lawyer’s work.

Long gone are the days of "all my client needs to know about the law is my phone number." If you don't treat 'em right, someone else will.

Students attending law universities face high debt loads and increasingly prefer to work for LPOs, which pay about the same as top-tier Indian law firms (US$10,000 per year). LPOs are able to recruit students whose grade point average is in the lower half of the class, who have experience with the use of Internet based legal resources such as Westlaw and Lexis, and who often have completed an LLM in the U.S. or the UK.