Friday, August 26, 2005

Slaw on| Outsourcing legal work

Simon Chester at Slaw notes a recent article in Legal Affairs on outsourcing legal support work to India.

The market for outsourced legal work is expected to reach $163 billion by next year, and India is positioned to seize the largest share. 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. Intellevate recently placed a want ad for a patent researcher in the Times of India, the leading English-language daily. The company received 1,700 résumés. "There are 200 million English-speaking, college-educated Indians and there are not 200 million jobs," Steinberg said. Such a disparity in supply and demand allows his company to hire credentialed, capable labor, cheaply. "We're not selling shoes," Steinberg likes to say. "We're selling cobblers." . . .

At Lexadigm, 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.

The disparity in salaries makes this seem like a more heroic sacrifice than it is. The lifestyle a Lexadigm or Intellevate salary buys is in many ways more lavish than an American attorney's. (And more than an Indian attorney's—Intellevate employees make 40 percent more than new associates at corporate law firms in India; many left such jobs to come to Intellevate.) . . .

While the plight of underpaid legal researchers is unlikely to be the next cause célébre for the anti-sweatshop movement, legal outsourcing, whispered about now, is likely to become a hotly debated topic in American law soon. For now, third-party outsourcers like Intellevate and Lexadigm remain popular mostly with corporate legal departments, which use outsourcing to keep costs down. Large law firms have been slower to send work to overseas outsourcers.

But what if they were to come around? Thomas Morgan, the professional responsibility expert, says bar association ethics rules require law firms to pass on to clients cost savings from outsourcing. In theory, at least, it would take only one big firm looking for a competitive advantage to start a bidding war that could change the cost of buying legal advice in the U.S.

I wonder if LexisNexis and Westlaw charge the same rates in India that they do in North America.

No comments: