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March of the Professional |
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Outsourcing of Legal Work will strengthen the Indian U.S. Legal relationship By Bharatji Agrawal, Senior Advocate High Court, Allahabad & Deputy President, AIFTP |
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Chairman Mr. J.D. Nankani, our Chief Guest Mr. Howard Weinman, Mr. Jeffrey H. Howard, Mr. Jeffrey L. Snyder, Mr. Arif H. Ali and Dr. K. Shivaram. Outsourcing is defined as the “the process of transferring an existing business function, including the relevant physical and/or human assets, to an external provider in order to strategically use outside resources to perform activities previously handled in-house.” Outsourcing involves transferring a significant amount of management control and decision-making to the outside supplier buying services from a provider is not necessarily outsourcing or out-tasking. Outsourcing always involves a considerable degree of two-way information exchange, coordination, and trust. The overhead costs of customer service are typically less where outsourcing has been used, leading to many companies, from utilities to manufacturers, closing their in-house customer relations departments and outsourcing their customer service to third party call centres. The logical extension of these decisions was of outsourcing labour overseas to countries with lower labor costs, this trend is often referred to as offshoring of customer service. OUTSOURCING LEGAL WORK TO INDIA The outsourcing of legal work is known in India as Legal Process Outsourcing (“LPO”). India’s legal system is based on English Common Law, Indian legal training is conducted solely in English, Appellate and Supreme Court proceedings take place exclusively in English, and legal opinions are written exclusively in English. Virtually all Indian lawyers are conversant with the UK legal system. OUTSOURCING LEGAL WORK TO INDIA began in 1995, when the 34-lawyer, Dallas-based litigation firm of Bickel & Brewer opened an office in India. Co-founder and co-managing partner Bill Brewer explained that the idea was hatched when he was out to brunch with a relation by marriage. INDIA ADVANTAGE The time difference between India and the United States allows for work to be done overnight, and many people in India’s enormous workforce are college-educated and English-speaking. There is a day time when there is a night in US, hence, Attorney, while leaving the office, instruct his counterpart in India to do research on specific legal issues and he can have the complete research done on his table in the early morning. India seemed like the best bet.
With more than 500 law schools and about 200,000 law students graduating each
year, it had no shortage of attorneys. Lawyers in India had access to the same
research tools and case summaries as any associate in the U.S. Sure, they didn’t
speak American English. “But they were highly motivated, highly intelligent, and
extremely process-oriented, They were also eager to tackle the kinds of tasks
that most new associates at law firms look down upon—such as poring over and
coding thousands of documents in advance of a trial. In other words, they were
perfect for the kind of document-review work he had in mind.” ATTORNEYS’ SALARIES range from $ 6,000 to $ 36,000. The employees, whose résumés lead off with LLMs from top U.S. law schools and are studded with internships at the World Trade Organization in Geneva and apprenticeships at the Indian Supreme Court, would earn six-figure salaries at elite U.S. law firms. But the education visas most of these young attorneys used to study in the United States allow for only one year of work after graduation, so most have to return to India to find jobs. With outsourcing, those who are not members of an American bar are supervised, and their work vouched for, by someone who is. “To the extent that what you have them to do is legal research for U.S. firms, it’s not much different than having law students do it, said George Washington University Law School professor Thomas Morgan, a scholar of professional responsibility. The core business of law firms is a combination of solving legal problems and helping clients cope with difficult situations. 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? The point is that even in what many would consider the core business of law firms lie potential outsourcing opportunities. There is a compelling logic to this approach and there has been some push from clients as hourly rates for inexperienced lawyers have soared. The recent round of salary increases for starting associates will only cause more interest in this approach. My sense is that, not surprisingly, like all areas of outsourcing, we’ve seen mixed results at the beginning. As the industry matures and we can determine who does this well, the results are likely to improve substantially. I expect to see more of this happening, especially in “commodity” legal work, especially document review and standard litigation preparation work. I also expect state bar regulators, who seem to have become very aggressive in the last few years, will soon have legal outsourcing on their radars. LEGAL OUTSOURCING TREND Some of the dozen or so outsourcing companies that have sprung up over the last decade in India focus on low-level paralegal work—keeping track of filing dates and document reviews. I came across with many solo
Indian legal practitioner who is doing legal work such as documents review,
legal research, litigation support and legal opinions for US, Canada and UK
while sitting in the peace of their home. Even Microsoft, which has been widely reported to be using India for patent research, declined to discuss the company beyond confirming that Microsoft is a client and issuing a statement that “[as] a global company, we are constantly working to improve our ability to serve our customers worldwide in the most cost effective, efficient manner. Given this reluctance to discuss outsourcing, convincing a potential client to accept even a free sample can take months of lobbying Generally, the legal work is outsourced by legal department of the companies and solo legal practitioner, small law firms to India but the trend is changing, large law firm is beginning to think about legal outsourcing to India. The legal outsourcing to India is bound to grow further within next 5 years and shall resolve all the present controversies despite initial issues relating to security, quality and political issues. The US attorney shall get benefited by concentrating on quality legal work, thus enhanced fees and it will also help the small law firm to grow without requiring much investment and staff. The client shall also benefited in terms of reduced legal cost. The presently, the benefit of low cost legal outsourcing is not passed over to the client but US attorney shall have to pass the benefit to their client. The political controversy around off-shoring has focused a lot of attention on the issue. That attention has caused some law firms to take a wait and see attitude — However, other law firms are progressive and are keenly interested in reducing costs and increasing responsiveness. For these firms, the political debate has actually raised awareness of off-shoring as a well entrenched business trend with a short span of time only from US outsourcing. Other countries; i.e., Canada, Australia and UK have also started outsourcing to India. I have been told that Rob Hyndman, a technology lawyer in solo practice in Toronto who has a particular interest in outsourcing, believes it has the potential to transform the legal profession by levelling the playing field for small and large firms. “The common wisdom now is that you’ve got to be big or you’ve got to be focused,” he says, but outsourcing enables small firms and even sole practitioners to bring on extra people with a variety of skills as needed, giving them the staffing advantages enjoyed by bigger firms, but without the overhead. With the work being done in India becoming more sophisticated, some American attorneys are skeptical of American firms that use outsourced legal services. “I think a lawyer has a responsibility over his work and he just can’t delegate it,” said former ABA president Jerome Shestack, now the head of litigation at the Philadelphia firm of Wolf, Block, Schorr and Solis-Cohen. “The problem with outsourcing is, how do you keep control over it? How do you see how it’s being done?” There have been some disputes within the American Bar Association about whether document review and legal research constitutes the practice of law. We have decided that if we bill people out as lawyers, they need to be licensed in the state they are working in. There are plenty of phenomenal lawyers here in the U.S. that you don’t have to gamble on. You can screen who is doing the work; you have access to where they went to law school, where they clerked. That’s something you might not get from lawyers in India. Source: Speech delivered on 23-5-2007 at Washington. |