Almost everyone agrees that the billable hour is the scourge of the legal profession. So why is it still around?
Douglas McCollamThe American LawyerNovember 28, 2005 For about 50 years now the billable hour has been the dominant feature of the legal profession. And for just as long lawyers have been trying to kill it. A group of litigators who usually couldn't agree that the sky was blue without several footnotes qualifying the shade will gladly sing in harmony about the evils of the billable hour and its partner in crime, the daily time sheet. Yet generations of lawyers have accounted for their work lives in six-minute increments. Both reviled and ubiquitous, the billable hour is the cockroach of the legal world. The basic flaw of the billable hour, say its detractors, is that it puts the financial incentives for lawyers in the wrong place. Back in a more genteel age, grouse many lawyers, when the practice was more of a profession and less of a business, the cost of legal services was determined not by the amount of time a lawyer spent on a matter but on the value he delivered to the client. That model broke down and was replaced by a time-based metric -- which, say critics, encourages firms to overstaff matters, lard their bills with marginally useful services, and draw out cases that might be brought to a swifter conclusion. "Their pricing model follows the production costs instead of following the needs of the buyer," says David Perla, a former in-house lawyer with Monster.com and co-founder of Pangea3, a new company that offers legal services performed by lawyers and scientists based in India at a steep discount to domestic rates. Perla calls the time-based American legal profession "grossly inefficient" and ripe for the competition that companies like his can provide. Offshoring is only one development posing a threat to the long hegemony of the billable hour. Technology in general has allowed firms to automate certain services for which they used to rack up billable hours. At the same time, as associate costs have soared, so have firm billable hour rates, climbing almost 30 percent during the last five years. That has prodded corporate clients, led by the likes of E.I. du Pont de Nemours and Co. and General Electric Co., to be more aggressive in exploring alternative pricing models for legal services, forcing even longtime outside counsel to bid for the right to represent the company. Fifteen years ago elite firms like Skadden, Arps, Slate, Meagher & Flom could get away with padding charges for photocopies and danish. Today sharp-eyed corporate accountants aren't afraid to put bills from even esteemed outside firms under an electron microscope. Such aggressive auditing, and a growing recognition of the defects inherent in the billable hour-based system, have led many inside the profession and outside to ask some simple but profound questions. What is it exactly that lawyers are selling to clients? Is it their time or their skill? And, if it is their skill, isn't there a better way to measure that value than by watching a clock? No one has put more effort into trying to drive a stake through the heart of the billable hour than Robert Hirshon, chief executive officer of the Portland, Ore., firm of Tonkon Torp. As president-elect of the American Bar Association in 2001, Hirshon traveled the country taking the collective pulse of the profession. The principal source of dissatisfaction, he says, was the billable hour. Associates complained that outlandish billable hour requirements were ruining their personal and professional lives. Partners resented that the almighty billable had become the single most important measure of their worth to the firm. And general counsel thought the billable hour caused firms to focus more on how much time they could put into a matter rather than to focus on the result obtained for the client. "All these complaints seemed to intersect at the billable hour," Hirshon says. So Hirshon put together a special commission to examine the impact of the billable hour on the legal profession. The commission surveyed hundreds of law firms and in-house legal departments, quizzing them about their billing practices and reliance on billable hours. The resulting report, issued in late 2002, ran more than 60 pages and fingered the billable hour system for a host of perceived ills in the profession, including bill padding, associate defections and the dearth of pro bono work. The report recommended a host of alternative billing strategies that firms could adopt to replace or augment the billable hour.
Law.com
Monday, November 28, 2005
Tuesday, November 22, 2005
E-Discovery: Pre-Litigation Considerations for In-House Counsel
LegalEase Solutions LLC: Another way legal outsourcing can be a viable provider to conduct timely due diligence and pre-emptive discovery for corporations on a regular basis.
Article
Every week, it seems, there is another article (or another court decision) highlighting the pitfalls of electronic discovery for companies in litigation. This article touches on some key considerations for in-house counsel even before litigation lands at your door and you are in the thick of discovery.
Consider all of the electronically stored information throughout your company -- including far-flung offices, servers that may be maintained by third parties offsite, and even computer files of contract employees. Consider the volume of electronic information that is created -- and destroyed -- each day. E-mails and more e-mails; Word documents in multiple versions; PowerPoint presentations; Excel spreadsheets. Multiple copies of every one of these. Now imagine being told by your litigation counsel -- or by the judge -- that you must locate, review and produce all of that electronically stored information for purposes of a pending lawsuit. And that you must take steps to ensure that no potentially relevant data is destroyed -- that you must stop all business deletion of electronically destroyed information, even the most routine practices, such as rewriting of backup tapes and the deletion of e-mails by individual employees.
Law.com - Legal Technology
Article
Every week, it seems, there is another article (or another court decision) highlighting the pitfalls of electronic discovery for companies in litigation. This article touches on some key considerations for in-house counsel even before litigation lands at your door and you are in the thick of discovery.
Consider all of the electronically stored information throughout your company -- including far-flung offices, servers that may be maintained by third parties offsite, and even computer files of contract employees. Consider the volume of electronic information that is created -- and destroyed -- each day. E-mails and more e-mails; Word documents in multiple versions; PowerPoint presentations; Excel spreadsheets. Multiple copies of every one of these. Now imagine being told by your litigation counsel -- or by the judge -- that you must locate, review and produce all of that electronically stored information for purposes of a pending lawsuit. And that you must take steps to ensure that no potentially relevant data is destroyed -- that you must stop all business deletion of electronically destroyed information, even the most routine practices, such as rewriting of backup tapes and the deletion of e-mails by individual employees.
Law.com - Legal Technology
Drafting patents, the new BPO
During 1997-2001, the US Patent and Trademark Office (USPTO) granted almost half a million patents and over 700 organisations were granted more than 100 patents each during these five years.
Overall, more than 3,53,000 utility, plant and reissue applications were filed in 2004 alone and out of these, foreign applicants filed more than 1,59,000.
Evalueserve estimates that as many as 5,00,000 patent applications will be filed with the USPTO in 2010
Within the US, the task of preparing, filing and prosecuting patent applications as well as that of performing other intellectual property work (preparing, filing and prosecuting trademark applications and copyrights, intellectual property or IP litigation and IP asset management) is being performed by approximately 30,000 attorneys and agents who are registered with the USPTO.
In order to meet the rising demand for the additional IP work, Evalueserve predicts that this number will exceed 38,000 by 2010; otherwise, the corresponding prices will rise very sharply.
Currently, many large organisations have in-house IP divisions that usually consist of agents, associates, lawyers and business development professionals who handle pretty much all kind of IP work.
However, most small and medium-sized enterprises do not have such divisions, and even many large firms often outsource some -- or all -- of their IP work to external, US-based law-firms.
Rediff.com
Overall, more than 3,53,000 utility, plant and reissue applications were filed in 2004 alone and out of these, foreign applicants filed more than 1,59,000.
Evalueserve estimates that as many as 5,00,000 patent applications will be filed with the USPTO in 2010
Within the US, the task of preparing, filing and prosecuting patent applications as well as that of performing other intellectual property work (preparing, filing and prosecuting trademark applications and copyrights, intellectual property or IP litigation and IP asset management) is being performed by approximately 30,000 attorneys and agents who are registered with the USPTO.
In order to meet the rising demand for the additional IP work, Evalueserve predicts that this number will exceed 38,000 by 2010; otherwise, the corresponding prices will rise very sharply.
Currently, many large organisations have in-house IP divisions that usually consist of agents, associates, lawyers and business development professionals who handle pretty much all kind of IP work.
However, most small and medium-sized enterprises do not have such divisions, and even many large firms often outsource some -- or all -- of their IP work to external, US-based law-firms.
Rediff.com
Monday, November 14, 2005
Legal Outsourcing to India will Dramatically Increase
Los Angeles, CA 90017
November 11 2005
Outsourced services and manufacturing to India is not new. For the year ended March 2005, India earned $6.7 billion in U.S.-based outsourcing services, such as software and technology call centers. Legal services are next. NASSCOM (the National Association of Software and Service Companies - an Indian industry organization) recently estimated that the amount of U.S.-based legal outsourced work is currently worth about $60 to $80 million annually, but this will soon increase to $3 to $4 billion. The research firm, Forrester, provided similarly dramatic estimates. Forester estimates that legal outsourcing to India is currently less than 12,000 jobs, but is estimated to grow to 29,000 jobs in 2008, 35,000 jobs by 2010, and 79,000 jobs by 2015. Two-thirds to three-quarters of these outsourced legal jobs are likely to go to India. More importantly, the sophistication of work going to India is increasing. Until now, the bulk of legal services work consisted of paralegal, secretarial, and litigation support. However, the Indian firms are now offering more valuable services such as: Contract review and monitoring Document review for due diligence Patent drafting Simple filings Legal research Rates for outsourced legal jobs vary widely depending on the nature of the services provided, but range from $12 to $125 per hour. Generally, the rates for Indian legal workers are about 10% to 20% of their U.S. counterparts. Indian outsourcing offers the following economic advantages: A significant wage differential – Indian firms report paying legal researchers around $12,000 per year. There are also savings in perks, overhead, and working conditions since Indian lawyers do not have the prestige that attorneys have in the U.S. Time zone differences, which allow overnight turnaround and 24x7 operations These advantages are not without challenges, but none of these challenges are insurmountable. The most important challenges to Indian legal outsourcing include concerns about data security, conflict of interest rules, and the need for Indian lawyers to also pass U.S. bar examinations. Interestingly, the need for Indian-based lawyers is being addressed through American law schools and U.S. immigration policies. Some Indian-based legal talent is schooled in the U.S., but American education visas allow these students to stay in the U.S. for only a short time after graduation. The newly-minted Indian lawyers return to their homeland, where the best jobs are working for Indian legal outsourcers. The supply of cheap Indian labor is not likely to end soon. English is the language of business in India. India has 200 million English-speaking college-educated workers, most still in their 20’s. More than 200,000 Indians graduate law school each year, five times more than in the U.S. As with most emerging service industries, there are no identified industry leaders. The participants include: About a dozen operators that have no other service lines beside law - These include Pangea3, Atlas Legal Research, Intellevate, India Legal, ALMT Synergies, Lexadigm, and Lawwave. About 50 broader-based outsourcers that have a legal group - These include Evalueserve, Integreon, Office Tiger, and Manthan Services. In-house law departments of some multinational firms - Reported examples include DuPont, General Electric, United Technologies, Bayer, Microsoft, Cisco, Oracle and Sun. The impact on the legal job market is obvious. However, like most changes, other consequences are not so obvious. Here are some of the changes that might occur as outsourcing becomes more widespread: If the cost of litigation is reduced, this could encourage U.S. firms to become more litigious. Small firms, when backed by outside affordable resources, might become more competitive and able to take on larger cases. Fulcrum Financial Inquiry is a financial consulting firm that serves the legal community with damages analysis, forensic accounting, and appraisal capabilities
Trish Bongiovanni (dnolte@fulcruminquiry.com)Office ManagerFulcrum Financial Inquiry LLP1000 Wilshire Blvd Los Angeles, CA 90017 Phone : 213.787.4111 Fax : 213.787.4141
NewsReleaseWire.com
November 11 2005
Outsourced services and manufacturing to India is not new. For the year ended March 2005, India earned $6.7 billion in U.S.-based outsourcing services, such as software and technology call centers. Legal services are next. NASSCOM (the National Association of Software and Service Companies - an Indian industry organization) recently estimated that the amount of U.S.-based legal outsourced work is currently worth about $60 to $80 million annually, but this will soon increase to $3 to $4 billion. The research firm, Forrester, provided similarly dramatic estimates. Forester estimates that legal outsourcing to India is currently less than 12,000 jobs, but is estimated to grow to 29,000 jobs in 2008, 35,000 jobs by 2010, and 79,000 jobs by 2015. Two-thirds to three-quarters of these outsourced legal jobs are likely to go to India. More importantly, the sophistication of work going to India is increasing. Until now, the bulk of legal services work consisted of paralegal, secretarial, and litigation support. However, the Indian firms are now offering more valuable services such as: Contract review and monitoring Document review for due diligence Patent drafting Simple filings Legal research Rates for outsourced legal jobs vary widely depending on the nature of the services provided, but range from $12 to $125 per hour. Generally, the rates for Indian legal workers are about 10% to 20% of their U.S. counterparts. Indian outsourcing offers the following economic advantages: A significant wage differential – Indian firms report paying legal researchers around $12,000 per year. There are also savings in perks, overhead, and working conditions since Indian lawyers do not have the prestige that attorneys have in the U.S. Time zone differences, which allow overnight turnaround and 24x7 operations These advantages are not without challenges, but none of these challenges are insurmountable. The most important challenges to Indian legal outsourcing include concerns about data security, conflict of interest rules, and the need for Indian lawyers to also pass U.S. bar examinations. Interestingly, the need for Indian-based lawyers is being addressed through American law schools and U.S. immigration policies. Some Indian-based legal talent is schooled in the U.S., but American education visas allow these students to stay in the U.S. for only a short time after graduation. The newly-minted Indian lawyers return to their homeland, where the best jobs are working for Indian legal outsourcers. The supply of cheap Indian labor is not likely to end soon. English is the language of business in India. India has 200 million English-speaking college-educated workers, most still in their 20’s. More than 200,000 Indians graduate law school each year, five times more than in the U.S. As with most emerging service industries, there are no identified industry leaders. The participants include: About a dozen operators that have no other service lines beside law - These include Pangea3, Atlas Legal Research, Intellevate, India Legal, ALMT Synergies, Lexadigm, and Lawwave. About 50 broader-based outsourcers that have a legal group - These include Evalueserve, Integreon, Office Tiger, and Manthan Services. In-house law departments of some multinational firms - Reported examples include DuPont, General Electric, United Technologies, Bayer, Microsoft, Cisco, Oracle and Sun. The impact on the legal job market is obvious. However, like most changes, other consequences are not so obvious. Here are some of the changes that might occur as outsourcing becomes more widespread: If the cost of litigation is reduced, this could encourage U.S. firms to become more litigious. Small firms, when backed by outside affordable resources, might become more competitive and able to take on larger cases. Fulcrum Financial Inquiry is a financial consulting firm that serves the legal community with damages analysis, forensic accounting, and appraisal capabilities
Trish Bongiovanni (dnolte@fulcruminquiry.com)Office ManagerFulcrum Financial Inquiry LLP1000 Wilshire Blvd Los Angeles, CA 90017 Phone : 213.787.4111 Fax : 213.787.4141
NewsReleaseWire.com
Sunday, November 13, 2005
India: Becoming global counsel
80,000 legal jobs will shift from the US to India by 2015. A number that can make you sit up and take notice — of LPO that is. The case for legal process outsourcing – read LPO - is fairly straightforward. Reduction in costs and streamlining of operations by major global corporations, like any other stream of offshoring, are the obvious drivers. What’s exciting about LPO, till now a small component of the overall BPO industry, is the future potential, especially vis-à-vis India. “We expect dramatic and exponential growth, based both on the cost pressures currently faced by the US and UK legal markets, and the traction that we are seeing across all of our service lines,” says Sanjay Kamlani, co-CEO of legal offshoring outfit Pangea3. Dittos Jason Brennan, director-legal services, OfficeTiger which offers legal offshore services in partnership with Hilderbrandt International: “The future of the LPO market is promising. In the US alone, estimated current spending for support services totalled $19.92 billion in 2004. Assuming a very conservative outsourcing potential of 10%, the resulting opportunity is about $2 billion. Of this, I believe India can capture a substantial share.” A survey of corporate law departments conducted by the American Corporate Counsel Association suggests that 86% of respondents cited external legal costs as their top concern. This has been the contributing factor in beginning an aggressive search for alternative sourcing methods. “The trend towards outsourcing - well under way in the IT services and finance sectors - is thus beginning to make its presence felt in the legal industry as well,” points out an industry analyst. Outsourcing helps the in-house counsel focus on core legal issues while research and managerial aspects are taken care of at lower costs.
The Economic Times
The Economic Times
Saturday, November 12, 2005
Outsourcing shouldn't bother US anymore
Silicon Valley, November 2: Contrary to common perception, Information Technology outsourcing benefits the US economy by increasing the number of US jobs, improving real wages for American workers, and pushing the US economy to perform at a higher level, according to a new study.
"Global sourcing continues to be a net positive for American workers and the US economy," said Harris N Miller, President of information technology association of America (ITAA), the leading trade association for the it industry.
"By driving down the costs associated with computer software and services and by opening more overseas markets to US competition, global sourcing sharpens our country's competitive edge at home and abroad. The result is more American jobs, higher wages and a faster growing economy overall."
The study, conducted by global insight, found that worldwide sourcing of IT services and software generated an additional 257,042 net new US jobs in 2005, a number that is expected to rise to 337,625 by 2010. With low inflation and high productivity, global sourcing also increased real hourly wages in the US by $0.06 in 2005.
Press Trust of IndiaPosted online: Wednesday, November 02, 2005 at 1401 hours ISTUpdated: Wednesday, November 02, 2005 at 1516 hours IST
"Global sourcing continues to be a net positive for American workers and the US economy," said Harris N Miller, President of information technology association of America (ITAA), the leading trade association for the it industry.
"By driving down the costs associated with computer software and services and by opening more overseas markets to US competition, global sourcing sharpens our country's competitive edge at home and abroad. The result is more American jobs, higher wages and a faster growing economy overall."
The study, conducted by global insight, found that worldwide sourcing of IT services and software generated an additional 257,042 net new US jobs in 2005, a number that is expected to rise to 337,625 by 2010. With low inflation and high productivity, global sourcing also increased real hourly wages in the US by $0.06 in 2005.
Press Trust of IndiaPosted online: Wednesday, November 02, 2005 at 1401 hours ISTUpdated: Wednesday, November 02, 2005 at 1516 hours IST
79,000 legal outsourcing jobs for India by 2015
Houston, November 12: India has huge potential in legal outsourcing, with the number of jobs in the field increasing to 79,000 by 2015, a study by an American research firm has said.
Though India had earned over $6.7 billion in US-based outsourcing services such as software and call centres till march 2005, the field of legal outsourcing was largely untapped, the study conducted by Forrester said.
The study estimated that jobs in the field which was poised to increase dramatically from about $80 million annually to approximately $4 billion, would grow to 29,000 in 2008, 35,000 by 2010, and 79,000 by 2015.
At present the number of jobs in legal outsourcing in India stood less than 12,000, it said.
Press Trust of IndiaPosted online: Saturday, November 12, 2005 at 1139 hours ISTUpdated: Saturday, November 12, 2005 at 1536 hours IST
Though India had earned over $6.7 billion in US-based outsourcing services such as software and call centres till march 2005, the field of legal outsourcing was largely untapped, the study conducted by Forrester said.
The study estimated that jobs in the field which was poised to increase dramatically from about $80 million annually to approximately $4 billion, would grow to 29,000 in 2008, 35,000 by 2010, and 79,000 by 2015.
At present the number of jobs in legal outsourcing in India stood less than 12,000, it said.
Press Trust of IndiaPosted online: Saturday, November 12, 2005 at 1139 hours ISTUpdated: Saturday, November 12, 2005 at 1536 hours IST
Wednesday, November 09, 2005
Indian BPOs fight US court battles
NEW DELHI, NOV 6: US court battles are now being outsourced to India. In a fiercely- competitive market where cut-throat deals have slashed voice BPO rates to $5-6 per hour, a segment of the industry is making a niche for itself in the name of legal BPO. An estimated 35,000 US lawyer jobs will move to low-cost destinations like India by 2010. The number will reach 79,000 by 2015.
Just 700 people, employed across 50-60 companies in the country command up to $125 per hour to generate business worth $70 million per annum. That's higher than the 2004 revenues of $60.5 million genera ted by EXLServices, one of the largest BPOs in India employing 5000 people.
Major third-party players in legal outsourcing in India include Evalueserve, Pangea3, Lawwave, Manthan, Lexadigm, Atlas, Integreon and Office Tiger. In-house (captive) legal outsourcing by MNCs like GE, Oracle, Sun and Cisco has also been very successful. Subsidiaries of large US law firms in India like Intellevate (Noida) and IPPRO (Bangalore) are also successful.
In fact, for the sector, legal outsourcing is one of the most lucrative businesses. At an average billing rate of $75 per hour, just 700 LPO employees generate a business of $420,000 (Rs 1.8 crore) every day.
HARSIMRAN SINGH
The Financial Express
Just 700 people, employed across 50-60 companies in the country command up to $125 per hour to generate business worth $70 million per annum. That's higher than the 2004 revenues of $60.5 million genera ted by EXLServices, one of the largest BPOs in India employing 5000 people.
Major third-party players in legal outsourcing in India include Evalueserve, Pangea3, Lawwave, Manthan, Lexadigm, Atlas, Integreon and Office Tiger. In-house (captive) legal outsourcing by MNCs like GE, Oracle, Sun and Cisco has also been very successful. Subsidiaries of large US law firms in India like Intellevate (Noida) and IPPRO (Bangalore) are also successful.
In fact, for the sector, legal outsourcing is one of the most lucrative businesses. At an average billing rate of $75 per hour, just 700 LPO employees generate a business of $420,000 (Rs 1.8 crore) every day.
HARSIMRAN SINGH
The Financial Express
Subscribe to:
Posts (Atom)
