Thursday, December 18, 2008

Legal outsourcing:a reliable answer to law firms and corporations

The article “India Work Grows, With Glitches” by Julie Kay gives an overview of the legal outsourcing industry in India and enumerates the concerns currently faced by law firms and companies worldwide.

According to Forrester research, legal outsourcing to India will reach $4bn by 2015. The figure summarizes the changes witnessed in the past couple of years. The market has grown phenomenally owing to pressure from corporate counsel on law firms to reduce costs. Also, the favorable bar opinions have encouraged corporations and law firms to explore the benefits of outsourcing some of the legal support work. Even the profile of work handled by LPOs has changed from “back-office work” to intellectual property, legal research, contract and conflict review and litigation support. Thus, it has now become imperative for law firms to address their respective interests and reexamine all aspects of outsourcing.

The write-up talks about firms such as Baker& McKenzie; Greenberg Traurig; Milbank, Tweed, Hadley & Mc Cloy; and Shapiro Sher Guinot & Sandler, which are plagued by questions related to legal outsourcing, things such as maintenance of quality control, confidential nature of client information, supervision of lawyers located at different geographical points and other difficulties such as terrorist attacks in Mumbai.

Terrorism has in today’s world become a rampant problem. No country is spared from its detrimental negative effects. “Terrorism can happen anywhere”, said Jeffrey Bailey, associate general counsel for Fresh Del Monte Produce Inc. Having said that, the article stresses on the point that outsourcing companies cannot ignore lingering apprehensions about “… not only whether their (our) information is secure but whether there could be disruption to their (our) service”.

Among the key benefits of legal outsourcing to an offshore location such as India are access to a huge talent base trained in common law, ability to scale up operations in a cost-effective manner, ability to benefit from principles of operations management such a ISO 9001 and Six Sigma when applied to legal support services, effecting a 24-hour work day and provisioning relatively simple legal tasks such as document or contract review from a willing workforce unlike new associates who perceive these tasks to be mundane. However, these advantages are desired only when accompanied with high quality services being offered.

Julie Kay gives the example of Greenberg Traurig that has recently outsourced a limited amount of IP work. Its focus is “to deliver the highest quality legal services as cost-effectively as possible” to its clients. In order to achieve this they have done some pilot projects using offshore resources.

Lately, outsourcing industry gained further momentum from recent favorable Bar ethics opinions, from the San Diego Bar Association in 2007, the Florida Bar in January 2008, the North Carolina State Bar in April 2008 and the American Bar Association in August 2008. All are in unison in the thought that outsourcing is allowed, provided certain pre-requisites are met, including notification to the client and supervision of the foreign lawyers by U.S. lawyers.

As a final comment to disquietude regarding offshoring, the article mentions step taken for its mitigation. People like William Byrnes, assistant dean at the Thomas Jefferson School of Law, are involved in developing an LPO certification program along with American Academy of Financial Management. This and more will help in answering the questions still in the minds of those deliberating about benefiting from legal outsourcing.