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To: Mike da bear who wrote (11933)	7/30/2003 8:07:25 PM
From: Les H	Read Replies (2) \| Respond to of 306849

PASSAGE TO INDIA: GE Ever since Benjamin Heineman joined Fairfield, Conn.-based General Electric Corp. in 1987, the company's law department has been credited with managerial excellence and innovation. It's no surprise, then, that GE uses a number of sophisticated strategies for managing outside counsel. These include everything from e-auctions among preferred providers to electronic invoicing. Even in this sophisticated milieu, however, GE's newest method for cutting outside counsel costs and improving efficiency is extreme. Since 2001 the company has been exporting U.S. legal work halfway around the world: to in-house lawyers based in India. The salaries of Indian attorneys are lower -- a total of $1.7 million that would previously have been spent on outside counsel in the U.S. has been saved so far -- and a nine-hour time difference means work gets done while Americans sleep. Why would GE take such a radical approach? Part of it has to do with the company's sheer size, which allows it to explore new and unusual methods. GE currently boasts 930 lawyers in-house, spread out everywhere the conglomerate's 13 divisions do business -- from Schenectady to Singapore. Heineman notes, with some pride, that the company spends only 40 percent of its legal budget (he wouldn't disclose the exact amount) on outside counsel; the remainder goes to in-house staff. When he arrived at GE 16 years ago, that percentage was reversed. Now only commodity work and "superspecialized stuff" get farmed out. Although GE retained about 500 law firms in 2002, 60 percent of its spending on outside counsel went to just 30 firms. GE Plastics first hit upon the idea of sending U.S. legal work -- in this case, contracts with company vendors -- to India. In 2001 the unit hired an in-house lawyer to work in Gurgaon, India; two others were hired soon thereafter. GE Consumer Finance followed suit, late in 2001, hiring two Indian lawyers and three Indian paralegals. Other GE businesses are now considering the India option. According to Suzanne Hawkins, GE's senior counsel for legal operations, the India team saved GE Plastics approximately $500,000 in 2001 and $700,000 in 2002. GE Consumer Finance saved about $250,000 each year. As Hawkins carefully puts it, Indian lawyers are "cost-competitive." The Indian attorneys are interviewed, hired and supervised by senior counsel in the United States. They spend a week in the U.S. for training. Because they work under an American in-house lawyer, aren't representing themselves as American lawyers, have only one client, and don't deal with third parties, rules on the unauthorized practice of law aren't a concern. And their credentials are impeccable. Four of the five attorneys have law degrees from American or English universities. All have law degrees from Indian universities and have practiced for several years. "It's gone extremely well," says Lawrence Harnett, senior counsel-Americas, for GE Plastics. "And the clients are very happy with the work." Law firm consultants praise GE's efforts too. Rees Morrison, a principal with Hildebrandt International, calls the venture "really monumental" and notes that it has the potential to rattle the legal establishment. "The relentless pursuit of low-cost legal talent leads offshore," he says. "It should scare in-house lawyers as much as it does law firms. It will eat its way up the food chain." law.com