Monday, August 27, 2007

Now, law firms offshore...

Bill Heinz of I/P Updates has an intriguing post on Bloomberg’s article “Jones Day, Kirkland Send Work to India to Cut Costs”. The article itself has some commentary on Law Firms' involvement in LPO. This is interesting and encouraging especially beacause of quotes from rather known firms. Snippets:

Clients are pushing law firms like Jones Day and Kirkland & Ellis to send basic legal tasks to India, where lawyers tag documents and investigate takeover targets for as little as $20 an hour.

"The objective is to have only the most valuable people in London or New York, and the others in India, China or Columbus, Ohio,'' said Robert Profusek, co-head of the mergers and acquisitions practice at Jones Day in New York, who sends low-end work to the cheapest locations and plans to open a document center in India. "Lawyers are service providers. We are not gods.''

General Electric Co. sends about $3 million a year in routine legal work to its Indian affiliate, said Janine Dascenzo, the Fairfield, Connecticut-based company's managing counsel for legal operations.

"India has very talented lawyers,'' she said. "But it's a misconception that you can just send work there and it gets done. You need proper supervision and security.''

Kirkland & Ellis, the seventh-largest U.S. law firm, works with offshore attorneys at the client's request, said Gregg Kirchhoefer, a senior partner in the firm's outsourcing and technology transaction practice.

"I'm not an advocate of offshoring legal services, but having worked in this area for so long, I understand the value of the model,'' he said. Typically, clients hire a provider and Chicago-based Kirkland helps manage the attorneys, Kirchhoefer said.

Armed with the knowledge of how little law firms might pay for offshore work, corporations can use the threat of cutting them out and sending legal tasks overseas on their own to force law firms to reduce fees.

Corporates first, then corporate directed law firms, and then law firms themselves. Small attorney firms all along. That, in two sentences is what I hypothesized the offshoring of legal services will be, and I am glad that is being ratified to a reasonable degree.