Outsourcing Legal Work
These posts both from FKJacobs on the PA board
Adding fuel to discussion is Change of Venue in the American Lawyer Magazine December 2003 issue. This column's sub-heading says it all: “Cost-conscious general counsel step up their use of offshore lawyers, creating fears of an exodus of U.S. legal jobs.” The article quotes Forrester Research, a market research firm, as predicting that 8% of lawyer jobs will go abroad by 2015. The article then sites examples of companies that are using the services of offshore lawyers. The head of one outsourcing firm “notes that foreign outsourcing could benefit large, multi-office law firms. Much of the work being done by junior associates, he says, could be handled offshore.” He may not be exactly unbiased, but I believe this is true. The article concludes that with skepticism about the idea of associates losing jobs but nonetheless suggest law firms need to consider the offshore possibility.
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Outsourcing Legal Work Overseas
Thanks to beSpacific & Doug Simpson for the pointer to an Information Week article entitled "Legal Research And Back-Office Work To Go Offshore Next" (December 9, 2003). In accordance with trends discussed here and at Netlawblog, some leading law firms are considering outsourcing paralegal and legal research work to Indian contractors. As Doug notes: "It provides a classic example of component suppliers gaining share by using disruptive technologies to deliver a 'low cost' alternative to existing sources."
As the Internet's global penetration continues, and users become more comfortable with its reliability, I think at least some degree of this type of outsourcing is probably inevitable. After India, the next big cheap labor source will be China. Just this week, a friend in the legal tech business gave me these estimates for the estimated annual cost to hire a competent computer programmer based in the folowing places:
U.S. $90,000
India $9,000
China $3,000
Legal work may not be quite as readily amenable to outsourcing as computer programming, but given the labor cost differential, some outsourcing of legal services will happen.
Update, Dec. 13, 2003: Orwellian Times responded to this posting by an on-target anecdote:
Everyone in the professional information trades -- accountants, lawyers, doctors, you name it -- is going to get squeezed by professionals in low wage locales. Some of this is happening already. For instance, my wife was in a car accident -- her x-rays were read by a doctor in New Zealand. |
