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An estimated 6-minute read

Could Technology Turn The Tide Against Legal Outsourcing Overseas?

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The title of this blog has been taken from a blog by GABE ACEVEDO published on an American legal tabloid, Above the Law. In the blog, the columnist talks about how Indian LPOs have been marketing the growth and benefits of outsourcing in American media and “trampling all over the US legal system”. Acevedo argues that the current tide in favor of Legal Process Outsourcing can be turned in two ways – by using social media and by offering a legitimate alternative.

Unfortunately, Acevedo doesn’t really see the real picture of Indian Legal Process Outsourcing companies that have been thriving and making news in the United States. Most of the leading LPOs, who are attracting serious business from the US are owned/ managed by Americans in India.

Pangea3 is one of the most talked about LPOs in India and abroad. The Chairman and Director of Pangea3 is Larry Graev who has served as Of Counsel to King & Spalding, LLP, a global law firm with approximately 800 lawyers across offices in Atlanta, London, New York, Washington, D.C. and Houston, representing a significant portion of Fortune 500 companies and was also a partner of O’Sullivan Graev & Karabell, LLP, a national law firm specializing in venture capital, private equity, strategic M&A and corporate finance. He led the firm’s growth from five attorneys to approximately 130 attorneys, becoming one of the leading law firms in these practice areas. He also served as Managing Partner and Chairman of the firm from 1977 to 1999. Out of the 6 people on the Board of Directors, only 2 are Indians.

Similarly, SDD Global is an LPO that’s run by Russell Smith who is also the founder of SmithDehn LLP, a law firm based in New York. In this firm also, the management is controlled by American lawyers. Mindcrest, India’s best LPO as per the Black Book of Outsourcing 2009 rankings, also has only 2 Indians in their 5-member board of directors.

The point I am trying to make is most of the LPOs who are doing considerable business in India are being managed by US attorneys and businessmen and the profits are staying in the U.S. economy. And the balance of convenience is in favor of outsourcing can be understood in terms of the simplest principle of economics – demand and supply. In this era of globalization and technology, the supply of lawyers has increased manifold and firms now have access to the global talent pool. Outsourcing comes as a natural choice in these circumstances. Clifford Chance has set up its knowledge center in India and the center is doing so well that attorneys have been promoted to the London Office.

Contract Attorneys

In his article, Acevedo talks about Wilmer Hale opening a facility in Ohio for contract lawyer services. This is again based on the simple demand-supply principle where Hale is trying to offer cheaper services. Outsourcing is not a question of principles or ethics but is a pure business decision. It has allowed many firms to retain clients at lower costs during the recession and more jobs would have been lost without outsourcing due to clients not being able/ willing to pay $250 an hour and above in legal fees. Contract attorneys will be able to replace outsourcing only if they’re willing to compete with the present rates at which LPOs are working. And it’s not that the alleged fears of outsourcing are not attached with contract attorneys. In an earlier article written by Acevedo, he spoke about firms already finding themselves in situations of crisis due to outsourcing work. However, when you click on the link to the story Acevedo is talking about, you see that the mistake in the trial of McAfee’s former General Counsel was made by contract lawyers at Howrey who had marked two critical emails as “not relevant”.

I am not arguing that lawyers from one country are better than others. This mistake could have been made by any regular associate and pin-pointing that outsourcing could lead to a higher chance of such errors would be wrong. As long as law firms are not just sending their work to any random LPO without knowing the credentials of the lawyers who would be actually working on their assignments, the risks of outsourcing is the same as giving the work to another associate at the law firm and not supervising it yourself.

Use of Technology

I am not arguing that there should be no protest in the US against outsourcing and this is a malicious agenda that certain lawyers are propagating. But the arguments against outsourcing somehow do not convince me. One such argument taken by Acevedo is the use of technology to curb outsourcing where he used the example of Fulbright transforming its document review system. Let’s break down the facts of this example. Fulbright came across a document review project for which using American lawyers in the traditional way would have been very expensive. They came across a technology that helped them reduce the cost and they did not end up outsourcing the project to India or any other offshore location. Instead of outsourcing, this technology helped them to do the work within their budget – in-house. How did this set up generate a single job opportunity in the US? The man hours were less – approximately the same or a little more than what US attorneys would spend supervising when the project would have been sent offshore.

Today, the argument against outsourcing is that it is taking away jobs such as document review; and other assignments that were usually done by first year associates is now being sent to India. Tomorrow, when technology improves and the same work is automated, it will be sent to machines instead of India! Will it be prudent to campaign against technology then? How many people with a good business sense would agree to that? That would be saying e-mail killed the post card, so let’s campaign against the use of email. During the industrial revolution, a lot of workers protested against the use of machines, as they feared job losses. Did machines not make the world a better place?

Even Indian LPOs are in favor of improved technology and cutting down man hours. Integreon recently announced the availability of its Seek & Collect™ service, which quickly and efficiently captures electronically stored information (ESI) in a forensically sound manner without the need for physical collection by forensic experts. Does that mean Integreon is against outsourcing by using technology and reducing man hours? This is again just a simple demand-supply business decision that they have made.

Competition is healthy so is technology and outsourcing. LPOs are not stealing jobs but ensuring that those paying legal fees have better options to manage their money in the market. If legal spending in the US can be reduced due to outsourcing, it will do more good than harm. The economy will get a boost with better savings for the litigants and overall, more jobs will be created than lost.


Written by Ashish Arun, Managing Partner at Offshore Research Partners | Ashish can be reached at 

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