By Ron Friedmann, Prism Legal Consulting, Inc. and Joy London, co-editor of Law Librarian News / excited utterances[1]
Published November 12, 2006
In early 2005, the authors started tracking legal market outsourcing and offshoring. Two trends sparked our interest. First was a spate of articles about law firms and departments outsourcing legal work. Second was a seemingly rapid rise in the number of offshore companies offering legal outsourcing services.
We created a list to track what seemed like a growing phenomenon; it includes
Law firms and law departments that, according to press reports, were outsourcing, offshoring, or “near shoring” either substantive legal work or back office support. (“Near shoring” refers to moving operations to a low-cost domestic location, for example, Orrick Herrington’s Wheeling, WV operations center.)
Offshore vendors that seemed to reflect a trend in new types of services offered, particularly legal research, patent and IP support, and document review, among others
We did not include several types of service that have been offered for quite a few years (e.g., litigation coding, transcription, and IT outsourcing). We maintain the list based on articles we read and e-mail messages we receive alerting us to new offshore legal service companies. The list is available at prismlegal.com.
Our first list in March 2005 included just over 20 entries. As of the October 2006 update, it includes just over 60. What does the growth in number of entries mean? How much and what types of legal work have actually moved offshore?
Though some market research[2] on offshoring is available, in our experience, these questions cannot be answered so easily. The market research data so far have looked at a single point in time and, with the apparent rapid evolution, that has limited value.
Our impression, based on reading and talking to onshore and offshore contacts, is that the volume of work moving offshore is not as large as the growth in our list might suggest. One sign of “more smoke than fire” is that several companies on the original list are no longer in business. Another sign is an absence of visible consolidation, which typically accompanies rapidly growing markets. (Just look at the e-discovery market for a great example of consolidation in a growing market.)
So what then is happening in legal outsourcing? For substantive legal work, patent-related work appears most active. Patent review requires deep scientific and engineering expertise. Lawyers are accustomed to delegating aspects of patent review to scientists and engineers. The hurdle to using highly trained professionals in India, especially given the cost savings and relative availability, is not that high.
Almost a dozen vendors on our list indicate that they perform document review. With e-discovery volume continuing to grow and the new Federal Rules concerning Electronically Stored Information taking effect December 1, document review seems a growth area. Retaining US lawyers to review every item is not economically sustainable. We can't see corporations continuing to pay for armies of US associates or contract lawyers. Even if software conducts a first pass review, the remaining volume may still require offshore review. Though ethics concerns are a consideration, the recent NYC Bar Association opinion (Formal Opinion 2006-3) may lower the barrier.
Offshore legal research seems unlikely to flourish. Several long-standing domestic companies have long provided outsourced legal research. Our sense is that they have not grown much. Lowering the price of research even more by performing it offshore seems unlikely to increase demand much. Structural issues more than price constrain outsourcing research.
The growth of other substantive legal areas moving offshore is a question mark. Contract (including leases) drafting or review seems feasible where volumes are high and language variations limited. Immigration and other high-volume, price sensitive work could also move offshore.
Bigger opportunities probably lie in outsourcing secretarial support and document processing and other law firm administrative functions. Already, several companies on our list offer outsourced word processing. The continuing merger trend among law firms will, we think, ultimately lead to more outsourcing of all sorts. Right now, many newly merged firms are dealing with lawyer and operations integration issues. Once full integration has occurred (which can take several years), outsourcing will likely increase.
The new behemoths ("BiggerLaw") already see the challenge of supporting global offices. To achieve cost-savings, firms will have to give up myths and start deciding based on facts. Once they do, the imperative to centralize is clear. For example, Clifford Chance recently announced that it will move 300 finance and IT jobs to India[3]. Once BiggerLaw understands the value of centralizing, deciding between owned or outsourced facilities is easier. Setting up an offshore operation is not trivial, so outsourcers have a good shot at more administrative business. BigLaw is not the only beneficiary, however, of outsourcing; small law practices can also take advantage of outsourced services.[4]
If the legal market follows the pattern of other markets, offshoring and outsourcing is sure to grow. And just as surely, they are likely to be "bumps in the road." Some big domestic IT outsourcing deals have gone sour and some offshore support operations have been pulled back to domestic offices. But the economics of outsourcing and offshoring are so attractive that additional growth is all but certain.
Notes:
[1] Law Librarian News / excited utterances is a global electronic newsletter for law librarians and legal knowledge managers (for subscription information, Joy London)
[2] ValueNotes published a study in December 2005; Forrester has also published a study (for a report on it, see The Next Wave in the Economist, Dec 14th, 2005.
[3]See CC to transfer 300 jobs to India in bid to save £30m in legalweek.com (10/2/06)
[4]John Tredennick, a lawyer and CEO of Catalyst Repository Systems, discusses the merits of small practices outsourcing in his upcoming article, Outsourcing for the Small Law Office: Lessons from “The World is Flat." slated for publication in Trial magazine in early 2007. In it, he observes
"the ease with which lawyers can outsource work to remote parts of the globe. Today, you might consider hiring a paralegal or secretary who lives in another state or even a different country (and people are doing just that). You can speak with them over the Internet without incurring a long distance charge. You can also send files to someone thousands of miles away faster than you could walk down the hall with a dictation cassette."
And he points out this is as true for small firms as for large
“ The above article has been reprinted from www.llrx.com and LegalEase Solutions LLC does not hold any rights to the same”
Sunday, November 26, 2006
Saturday, November 25, 2006
New Licensing Rules Present Higher Hurdles for GCs
by
Amanda Bronstad
The National Law Journal
General counsel are facing more risks and frustrations with new rules requiring them to obtain a limited license to practice law in states where they work but haven't taken the bar exam.
The rules came about after the American Bar Association sought to modernize licensing requirements as more lawyers move from state to state when changing jobs.
Since 2002, 26 states have passed new rules, most recently in Utah, which became effective on Nov. 1, and Washington state, on Sept. 1. The vast majority of the rules have been passed in the last two years.
General counsel originally heralded the rules, which clarified for the first time that they were not engaged in the unauthorized practice of law if they did not take the local bar exam. The new rules also exempted them from taking local bar exams in order to become licensed.
But the new rules have put an uncomfortable spotlight on general counsel who don't obtain a limited license. Last year, Judge Thomas Griffith of the D.C. Circuit Court of Appeals faced criticism during his confirmation for not being licensed in Utah while serving as general counsel of Brigham Young University.
In August, the general counsel of a Virginia-based pork-processing company lost his legal title after a feuding labor union noted he wasn't licensed in that state to practice law. And last month, an online blog highlighted unlicensed general counsel at four Wisconsin-based companies.
Beyond the risks, general counsel are getting increasingly frustrated in some states with the limited license requirements, which include mounds of paperwork, high registration fees and, in some cases, fingerprinting for background checks. Some are ignoring the rules altogether.
"There are probably quite a few people in the in-house profession who are flying below radar, engaged in the practice where everyone is assuming 'no harm, no foul,'" said Susan Hackett, senior vice president and general counsel of the Association of Corporate Counsel in Washington, who is advising general counsel of the risks of being unlicensed.
NEW RISKS
In 2002, the American Bar Association proposed an amended model rule that clarified the licensure requirements of lawyers practicing in multiple states. Part of that rule, called Model Rule 5.5, permitted general counsel to practice law without a license in the state where they worked as long as they were admitted somewhere.
More than half of the states have either adopted Model 5.5 in its plain language or adopted their own special licensing rules for in-house counsel. Several states, including New York and Connecticut, have not passed rules at all, leaving the status of general counsel in question.
The rules raise new risks for general counsel. A Wisconsin blog, called Milwaukeeworld.com, raised attention among the in-house bar last month after revealing that general counsel at four Wisconsin-based companies were not registered to practice law in that state, where they worked.
Three of them, including Bryan Blankfield, executive vice president and general counsel of Oshkosh Truck Corp., and John "Jack" Hammond, general counsel, vice president and secretary of Sensient Technologies Corp., told The National Law Journal that Wisconsin does not require them to be licensed.
"I'm not offering a public service to consumers," said the third, Robert Heath, vice president and general counsel and secretary of Briggs & Stratton Corp. "I'm working for a group of businesspeople as part of a team trying to solve problems that involve legal issues. I don't see the value there of getting licensed in every jurisdiction that your particular employer may move you to."
The fourth lawyer, W. David Romoser, vice president, general counsel and secretary of A.O. Smith Corp., did not return calls seeking comment.
Even though Wisconsin case law says that general counsel don't need to be licensed in the state, the microscope is damaging, said Lee Braem, president-elect of the New Jersey Corporate Counsel Association and counsel at Tyco International Ltd.
"Because of the compliance issues, there is a likelihood that an unauthorized practice of law issue could get raised," he said. "It can be embarrassing. They're supposed to be setting an example of leadership and compliance and governance and ethics."
In August, an investor group associated with the United Food and Commercial Workers International Union wrote a letter to the board of directors of Smithfield Foods Inc. asking why its then-general counsel, Richard J.M. Poulson, was not licensed to practice law in Virginia, where the company is based.
In 2004, Virginia passed a new rule requiring local general counsel who hadn't passed the state's bar exam to obtain limited licenses.
Following a rare investigation, the Virginia Bar Association concluded last month that Poulson had not violated state rules because he works primarily in New York, said James McCauley, ethics counsel for the Virginia bar.
"If we had some evidence that Mr. Poulson was advising persons in Virginia, and was physically here in Virginia when doing so, then the outcome might be different," McCauley said.
Meanwhile, Poulson, who did not return calls seeking comment, had his title changed to vice president of external affairs, where "he will not be rendering legal advice, or otherwise acting as a lawyer," said Scott Hynes, a Smithfield spokesman.
UTAH'S ALTERNATIVE
In Utah, where Griffith's license status came into question, new rules became effective on Nov. 1.
Joni Dickson Seko, deputy general counsel for admissions for the Utah State Bar, said there was a difference of opinion as to whether Griffith was providing advice about Utah law while at Brigham Young.
But with the new rules, the challenge is convincing general counsel that they are violating the law if they're not licensed. "In the past, there was sympathy to say you have to take the bar exam," Dickson said. "Now, we have this legitimate alternative for people, and I would hope they would take advantage of it."
Despite the risks, many general counsel aren't getting the limited licenses -- often because they find the process frustrating.
In most cases, states have set up extensive registration programs for general counsel to obtain limited licenses. The processes usually require filling out a lengthy form ensuring good standing, plus registration and annual fees.
"The big thing that in-house lawyers got from these rules is certainty," said Michael Lampert, a partner in the Princeton, N.J., office of Philadelphia-based Saul Ewing, who represents lawyers as clients. "But they've traded convenience."
California's new rule, passed in 2004, requires general counsel to complete continuing legal education courses, pass a professional responsibility exam and provide fingerprinting for background checks. Phyllis Culp, director of the office of special admissions and specialization for the State Bar of California, said that about 600 in-house counsel have applied for the limited license.
But that's not everyone.
Jonathan Block, vice president and general counsel of Camarillo, Calif.-based Salem Communications Corp., said that many lawyers in the state are frustrated about the new rules. "It's unnecessarily bureaucratic," Block said.
In New Jersey, more than 1,000 general counsel have begun receiving state licenses in recent months after completing an extensive application process passed by the state two years ago. The rule requires them to fill out a 26-page form, pay a $750 registration fee, get fingerprinted, provide driver's license records and take an hours-long ethics course.
"It's a lot of paperwork for people who, in many cases, have been in practice for 15 or more years," said Philip Crowley, assistant general counsel at Johnson & Johnson, which has 120 in-house lawyers in the company's home base in New Jersey. He said that although his lawyers have complied, "it seems to me to be overkill. I don't believe that all of this is absolutely necessary."
“ The above article has been reprinted from www.law.com and LegalEase Solutions LLC does not hold any rights to the same”
Amanda Bronstad
The National Law Journal
General counsel are facing more risks and frustrations with new rules requiring them to obtain a limited license to practice law in states where they work but haven't taken the bar exam.
The rules came about after the American Bar Association sought to modernize licensing requirements as more lawyers move from state to state when changing jobs.
Since 2002, 26 states have passed new rules, most recently in Utah, which became effective on Nov. 1, and Washington state, on Sept. 1. The vast majority of the rules have been passed in the last two years.
General counsel originally heralded the rules, which clarified for the first time that they were not engaged in the unauthorized practice of law if they did not take the local bar exam. The new rules also exempted them from taking local bar exams in order to become licensed.
But the new rules have put an uncomfortable spotlight on general counsel who don't obtain a limited license. Last year, Judge Thomas Griffith of the D.C. Circuit Court of Appeals faced criticism during his confirmation for not being licensed in Utah while serving as general counsel of Brigham Young University.
In August, the general counsel of a Virginia-based pork-processing company lost his legal title after a feuding labor union noted he wasn't licensed in that state to practice law. And last month, an online blog highlighted unlicensed general counsel at four Wisconsin-based companies.
Beyond the risks, general counsel are getting increasingly frustrated in some states with the limited license requirements, which include mounds of paperwork, high registration fees and, in some cases, fingerprinting for background checks. Some are ignoring the rules altogether.
"There are probably quite a few people in the in-house profession who are flying below radar, engaged in the practice where everyone is assuming 'no harm, no foul,'" said Susan Hackett, senior vice president and general counsel of the Association of Corporate Counsel in Washington, who is advising general counsel of the risks of being unlicensed.
NEW RISKS
In 2002, the American Bar Association proposed an amended model rule that clarified the licensure requirements of lawyers practicing in multiple states. Part of that rule, called Model Rule 5.5, permitted general counsel to practice law without a license in the state where they worked as long as they were admitted somewhere.
More than half of the states have either adopted Model 5.5 in its plain language or adopted their own special licensing rules for in-house counsel. Several states, including New York and Connecticut, have not passed rules at all, leaving the status of general counsel in question.
The rules raise new risks for general counsel. A Wisconsin blog, called Milwaukeeworld.com, raised attention among the in-house bar last month after revealing that general counsel at four Wisconsin-based companies were not registered to practice law in that state, where they worked.
Three of them, including Bryan Blankfield, executive vice president and general counsel of Oshkosh Truck Corp., and John "Jack" Hammond, general counsel, vice president and secretary of Sensient Technologies Corp., told The National Law Journal that Wisconsin does not require them to be licensed.
"I'm not offering a public service to consumers," said the third, Robert Heath, vice president and general counsel and secretary of Briggs & Stratton Corp. "I'm working for a group of businesspeople as part of a team trying to solve problems that involve legal issues. I don't see the value there of getting licensed in every jurisdiction that your particular employer may move you to."
The fourth lawyer, W. David Romoser, vice president, general counsel and secretary of A.O. Smith Corp., did not return calls seeking comment.
Even though Wisconsin case law says that general counsel don't need to be licensed in the state, the microscope is damaging, said Lee Braem, president-elect of the New Jersey Corporate Counsel Association and counsel at Tyco International Ltd.
"Because of the compliance issues, there is a likelihood that an unauthorized practice of law issue could get raised," he said. "It can be embarrassing. They're supposed to be setting an example of leadership and compliance and governance and ethics."
In August, an investor group associated with the United Food and Commercial Workers International Union wrote a letter to the board of directors of Smithfield Foods Inc. asking why its then-general counsel, Richard J.M. Poulson, was not licensed to practice law in Virginia, where the company is based.
In 2004, Virginia passed a new rule requiring local general counsel who hadn't passed the state's bar exam to obtain limited licenses.
Following a rare investigation, the Virginia Bar Association concluded last month that Poulson had not violated state rules because he works primarily in New York, said James McCauley, ethics counsel for the Virginia bar.
"If we had some evidence that Mr. Poulson was advising persons in Virginia, and was physically here in Virginia when doing so, then the outcome might be different," McCauley said.
Meanwhile, Poulson, who did not return calls seeking comment, had his title changed to vice president of external affairs, where "he will not be rendering legal advice, or otherwise acting as a lawyer," said Scott Hynes, a Smithfield spokesman.
UTAH'S ALTERNATIVE
In Utah, where Griffith's license status came into question, new rules became effective on Nov. 1.
Joni Dickson Seko, deputy general counsel for admissions for the Utah State Bar, said there was a difference of opinion as to whether Griffith was providing advice about Utah law while at Brigham Young.
But with the new rules, the challenge is convincing general counsel that they are violating the law if they're not licensed. "In the past, there was sympathy to say you have to take the bar exam," Dickson said. "Now, we have this legitimate alternative for people, and I would hope they would take advantage of it."
Despite the risks, many general counsel aren't getting the limited licenses -- often because they find the process frustrating.
In most cases, states have set up extensive registration programs for general counsel to obtain limited licenses. The processes usually require filling out a lengthy form ensuring good standing, plus registration and annual fees.
"The big thing that in-house lawyers got from these rules is certainty," said Michael Lampert, a partner in the Princeton, N.J., office of Philadelphia-based Saul Ewing, who represents lawyers as clients. "But they've traded convenience."
California's new rule, passed in 2004, requires general counsel to complete continuing legal education courses, pass a professional responsibility exam and provide fingerprinting for background checks. Phyllis Culp, director of the office of special admissions and specialization for the State Bar of California, said that about 600 in-house counsel have applied for the limited license.
But that's not everyone.
Jonathan Block, vice president and general counsel of Camarillo, Calif.-based Salem Communications Corp., said that many lawyers in the state are frustrated about the new rules. "It's unnecessarily bureaucratic," Block said.
In New Jersey, more than 1,000 general counsel have begun receiving state licenses in recent months after completing an extensive application process passed by the state two years ago. The rule requires them to fill out a 26-page form, pay a $750 registration fee, get fingerprinted, provide driver's license records and take an hours-long ethics course.
"It's a lot of paperwork for people who, in many cases, have been in practice for 15 or more years," said Philip Crowley, assistant general counsel at Johnson & Johnson, which has 120 in-house lawyers in the company's home base in New Jersey. He said that although his lawyers have complied, "it seems to me to be overkill. I don't believe that all of this is absolutely necessary."
“ The above article has been reprinted from www.law.com and LegalEase Solutions LLC does not hold any rights to the same”
Thursday, November 23, 2006
Offshore providers target legal outsourcing market
23rd November 2006
By Staff Writer
www.cbronline.com
Much of the hype surrounding the initial wave of offshore business process outsourcing is now focused on what many suppliers call knowledge process outsourcing, or KPO. These services are typically higher value processes based around more analytical and professional functions, such as research services for a specific industry.
In the past several years, several companies offering offshore legal services outsourcing have entered this KPO market, offering a range of low- to mid-level services. These firms, such as Office Tiger, Pangea3, and Lexadigm, serve both large corporations wishing to unload some of their in-house counsel work, such as contract drafting, document management and review, or due diligence, as well as law firms themselves seeking to cut costs in these areas. Many of these companies also offer intellectual property services such as patent and trademark work.
AdvertisementThe global legal services market stands at some $260bn, and about $160bn of it is in the US, said Lexadigm president Puneet Mohey, citing recent figures from Forrester Research. Between 60% and 70% of this work can technically be offshored, and 70% of this offshorable work is likely to go to India, Mohey said.
Forrester figures that 12,000 jobs were in India by 2004 and that number should grow to a whopping 79,000 positions by 2015.
India is the top destination due to its many English speakers, large pool of attorneys graduating each year, and the similarity of its legal system to the US model. Plus there's the obvious cost advantage of these offshore suppliers that often charge below $50 an hour for services that US law firms will typically bill $150 an hour or higher. Yet the legal outsourcing market is still young. It was only in the hundreds of millions last year, Mohey said, and most of this went to corporations' captive shops offshore.
Indian trade group Nasscom last year also published similarly rosy projections for legal outsourcing. It estimated that $3bn to $4bn of legal work in the US alone could be outsourced, although only 2% to 3% of this market has actually been outsourced.
Not all forecasts are so bullish. Evalueserve, an analyst group that also provides IP outsourcing services, pegs the current legal outsourcing market for Indian suppliers at just $56m, rising to $300m in 2011. And it estimates that only 1,300 full-time attorneys are now working in India in an outsourcing capacity, and that this number should reach 16,000 by 2015, or only 1.2% of all US lawyers.
Regardless of the analyst disagreements over the size and shape of future business opportunities, the market is clearly growing, judging from both client interest and the increase in offshore legal services companies, Mohey said.
He explained that when Lexadigm was founded in early 2004, there were only a few players in the field, offering mainly low-level legal work. In 2005 the market picked up, more competitors entered the picture and freelance attorneys in India began looking for outsourcing work.
This year interest on the client side has also increased, as large corporations and law firms consider their outsourcing options. In fact, Mohey doubted that there is one major US law firm that has not at least looked into the issue.
The above article has been reprinted from WWW.cbronline.com and LegalEase Solutions LLC does not hold any rights to the same
By Staff Writer
www.cbronline.com
Much of the hype surrounding the initial wave of offshore business process outsourcing is now focused on what many suppliers call knowledge process outsourcing, or KPO. These services are typically higher value processes based around more analytical and professional functions, such as research services for a specific industry.
In the past several years, several companies offering offshore legal services outsourcing have entered this KPO market, offering a range of low- to mid-level services. These firms, such as Office Tiger, Pangea3, and Lexadigm, serve both large corporations wishing to unload some of their in-house counsel work, such as contract drafting, document management and review, or due diligence, as well as law firms themselves seeking to cut costs in these areas. Many of these companies also offer intellectual property services such as patent and trademark work.
AdvertisementThe global legal services market stands at some $260bn, and about $160bn of it is in the US, said Lexadigm president Puneet Mohey, citing recent figures from Forrester Research. Between 60% and 70% of this work can technically be offshored, and 70% of this offshorable work is likely to go to India, Mohey said.
Forrester figures that 12,000 jobs were in India by 2004 and that number should grow to a whopping 79,000 positions by 2015.
India is the top destination due to its many English speakers, large pool of attorneys graduating each year, and the similarity of its legal system to the US model. Plus there's the obvious cost advantage of these offshore suppliers that often charge below $50 an hour for services that US law firms will typically bill $150 an hour or higher. Yet the legal outsourcing market is still young. It was only in the hundreds of millions last year, Mohey said, and most of this went to corporations' captive shops offshore.
Indian trade group Nasscom last year also published similarly rosy projections for legal outsourcing. It estimated that $3bn to $4bn of legal work in the US alone could be outsourced, although only 2% to 3% of this market has actually been outsourced.
Not all forecasts are so bullish. Evalueserve, an analyst group that also provides IP outsourcing services, pegs the current legal outsourcing market for Indian suppliers at just $56m, rising to $300m in 2011. And it estimates that only 1,300 full-time attorneys are now working in India in an outsourcing capacity, and that this number should reach 16,000 by 2015, or only 1.2% of all US lawyers.
Regardless of the analyst disagreements over the size and shape of future business opportunities, the market is clearly growing, judging from both client interest and the increase in offshore legal services companies, Mohey said.
He explained that when Lexadigm was founded in early 2004, there were only a few players in the field, offering mainly low-level legal work. In 2005 the market picked up, more competitors entered the picture and freelance attorneys in India began looking for outsourcing work.
This year interest on the client side has also increased, as large corporations and law firms consider their outsourcing options. In fact, Mohey doubted that there is one major US law firm that has not at least looked into the issue.
The above article has been reprinted from WWW.cbronline.com and LegalEase Solutions LLC does not hold any rights to the same
New York City Bar Ethics Opinion Permits Legal Services Outsourcing
by Adam Ketcher
In August 2006, the Committee on Professional and Judicial Ethics of the Association of the Bar of the City of New York ("the Committee") published a Formal Opinion that stated attorneys could ethically contract out legal support services abroad, both to foreign lawyers not admitted to practice in any U.S. jurisdiction and to laypersons ("non-lawyers"), without violating the New York Code of Professional Responsibility's ("the Code") prohibition against aiding in the unauthorized practice of law pursuant to Disciplinary Rule ("DR") 3-101(A). N.Y. City Bar Op. 2006-3.[1] The Committee qualified this pronouncement by requiring that New York lawyers take into account certain ethical considerations before contracting out any legal work; specifically, the Committee stated that lawyers must (a) provide vigorous supervision to ensure competent representation and to avoid aiding in the unauthorized practice of law; (b) preserve client confidences and secrets; (c) inquire into possible conflicts of interest; (d) bill clients appropriately; and (e) obtain the necessary client advance consent.
As the business of legal outsourcing has developed into an $80 million market, with estimates of nearly 80,000 U.S. legal jobs expected to move overseas by 2015 - particularly to India where English common law is the foundation of a legal system that uses English as the official language - legal ethicists, scholars and practitioners have spoken out strongly both in favor and against the practice of legal outsourcing to non-lawyers abroad.[2] During the year leading up to this opinion, several articles and online legal forums have presented vastly contrasting views as to the benefits and risks of legal outsourcing. Those in favor highlight its cost effectiveness and the increased efficiency gained by time zone differentials. Those opposed present privacy concerns and question the quality of work product of individuals trained in foreign jurisdictions, even going so far as to characterize legal process outsourcing as per se malpractice.[3] The Committee found the former arguments to be more persuasive, and noted their consideration in the Code. [4]
The Committee opined that "[because] the Code holds the attorney accountable," the ambit of tasks an attorney may delegate to non-lawyers should be commensurate with the degree of supervision that attorney provides over the work of the non-lawyers. [5] As explained by the Committee, Disciplinary Rule 1-104(C) calls for a degree of supervision that is reasonable under the circumstances. In the context of legal process outsourcing, the Committee interpreted the reasonable standard to require "vigilant and creative" supervision that bridges the physical separation between New York lawyers and those employed by them overseas, and offered a brief list of "salutary steps" a New York attorney should consider to undertake before he or she employs non-lawyers abroad. The list included reference checking for both the intermediary and the non-lawyer employed through the intermediary, interviewing the non-lawyer to screen out those unsuitable for particular assignments, and continued communication as assignments progress to ensure quality work product.
As stated above, another consideration the Committee noted as of paramount importance when outsourcing is the preservation of clients' confidences and secrets in accordance with DR 4-101. Initially, the Committee said, a New York lawyer should check for conflicts of interest between the interests of his or her client, any intermediary used and the non-lawyers he or she intends to hire for the work. Furthermore, a New York lawyer should obtain a client's informed consent before delegating any work abroad, which the Committee later clarified as involving full disclosure to the client if a discerning client would believe that the non-lawyer's work would affect strategic decisions of the case rather than relate to mere tangential matters. In other words, a New York lawyer must keep client expectations in mind when deciding whether to outsource work. Also, a New York lawyer must inform himself or herself as to the different laws and traditions of the country where the work is to be outsourced, with regard to the protection of privileged information, and utilize adequate safeguards such as using hypotheticals, issuing periodic reminders and including contractual provisions that address confidentiality issues. Finally, the Committee defined "appropriate billing" as "no more than the direct cost associated with outsourcing, plus a reasonable allocation of overhead expenses."
The Committee's opinion recognizes the trend toward legal process outsourcing as one that benefits both law firms and their clients. As with any ethics opinion, this opinion too provides some flexibility for New York lawyers with regard to how they conduct their practices. Nevertheless, the opinion is a strong reminder that lawyers who outsource their work remain accountable to client expectations. Thus, professional ethics require that lawyers provide close supervision over the work of intermediaries, no matter how far removed.
--------------------------------------------------------------------------------
Endnotes
1 Available at http://www.nycbar.org/Ethics/eth2006.htm
2 See Tom Mighell, "Outsourcing," Law Practice Today, April 2006, available at http://www.abanet.org/lpm/lpt/articles/slc04061.shtml
3 In response to an advertisement offering legal outsourcing services for immigration law practitioners on Immigration Daily online, Bruce A. Hake, a noted commentator on Immigration Law Ethics, objected in a "Letter to the Editor" that it was "an illegal advertisement for the unauthorized practice of law, which is a criminal offense under the laws of most states in the US." Mr. Hake suggested that American lawyers who outsourced legal work would be subject to per se malpractice liability, as well as professional sanctions such as possible disbarment. Immigration Daily, March 28, 2005, www.ilw.com/immigdaily/digest/2005,0328.shtm.
4 In its opinion, the Committee referenced Ethical Consideration 3-6, which states, "A lawyer often delegates tasks to clerks, secretaries, and other lay persons. Such delegation is proper if the lawyer maintains a direct relationship with the client, supervises the delegated work, and has complete professional responsibility for the work product. This delegation enables a lawyer to render legal service more economically and efficiently."
5 Here the Committee references an opinion of the Committee on Professional Ethics of the New York State Bar Association, which stated that a lawyer may use an outside legal research firm staffed with non-lawyers provided the New York lawyer exercised proper supervision, which entailed scrutiny of the completed work to "assur[e] its soundness." N.Y. State Opinion 721 (1999).
I would like to thank Cyrus D. Mehta for taking the time to edit this article.
This article originally appeared on www.cyrusmehta.com on October 13, 2006
About The Author
Adam Ketcher is an Associate at Cyrus D. Mehta & Associates, PLLC where he works in the area of immigration and nationality law. He received his J.D. in 2006 from Brooklyn Law School where he assisted with research for an upcoming casebook on international refugee law and was the recipient of the Edward V. Sparer Public Interest Law Fellowship. Adam has worked as a legal intern for Catholic Charities" Immigrant and Refugee Department, U.S. Citizenship & Immigration Services, and as a summer law clerk for the Executive Office of Immigration Review, New York City Immigration Court. Adam has taken the New York State Bar Examination and is currently awaiting his results
“ The above article has been reprinted from http://www.ilw.com/articles/2006,1127-ketcher.shtm and LegalEase Solutions LLC does not hold any rights to the same”
In August 2006, the Committee on Professional and Judicial Ethics of the Association of the Bar of the City of New York ("the Committee") published a Formal Opinion that stated attorneys could ethically contract out legal support services abroad, both to foreign lawyers not admitted to practice in any U.S. jurisdiction and to laypersons ("non-lawyers"), without violating the New York Code of Professional Responsibility's ("the Code") prohibition against aiding in the unauthorized practice of law pursuant to Disciplinary Rule ("DR") 3-101(A). N.Y. City Bar Op. 2006-3.[1] The Committee qualified this pronouncement by requiring that New York lawyers take into account certain ethical considerations before contracting out any legal work; specifically, the Committee stated that lawyers must (a) provide vigorous supervision to ensure competent representation and to avoid aiding in the unauthorized practice of law; (b) preserve client confidences and secrets; (c) inquire into possible conflicts of interest; (d) bill clients appropriately; and (e) obtain the necessary client advance consent.
As the business of legal outsourcing has developed into an $80 million market, with estimates of nearly 80,000 U.S. legal jobs expected to move overseas by 2015 - particularly to India where English common law is the foundation of a legal system that uses English as the official language - legal ethicists, scholars and practitioners have spoken out strongly both in favor and against the practice of legal outsourcing to non-lawyers abroad.[2] During the year leading up to this opinion, several articles and online legal forums have presented vastly contrasting views as to the benefits and risks of legal outsourcing. Those in favor highlight its cost effectiveness and the increased efficiency gained by time zone differentials. Those opposed present privacy concerns and question the quality of work product of individuals trained in foreign jurisdictions, even going so far as to characterize legal process outsourcing as per se malpractice.[3] The Committee found the former arguments to be more persuasive, and noted their consideration in the Code. [4]
The Committee opined that "[because] the Code holds the attorney accountable," the ambit of tasks an attorney may delegate to non-lawyers should be commensurate with the degree of supervision that attorney provides over the work of the non-lawyers. [5] As explained by the Committee, Disciplinary Rule 1-104(C) calls for a degree of supervision that is reasonable under the circumstances. In the context of legal process outsourcing, the Committee interpreted the reasonable standard to require "vigilant and creative" supervision that bridges the physical separation between New York lawyers and those employed by them overseas, and offered a brief list of "salutary steps" a New York attorney should consider to undertake before he or she employs non-lawyers abroad. The list included reference checking for both the intermediary and the non-lawyer employed through the intermediary, interviewing the non-lawyer to screen out those unsuitable for particular assignments, and continued communication as assignments progress to ensure quality work product.
As stated above, another consideration the Committee noted as of paramount importance when outsourcing is the preservation of clients' confidences and secrets in accordance with DR 4-101. Initially, the Committee said, a New York lawyer should check for conflicts of interest between the interests of his or her client, any intermediary used and the non-lawyers he or she intends to hire for the work. Furthermore, a New York lawyer should obtain a client's informed consent before delegating any work abroad, which the Committee later clarified as involving full disclosure to the client if a discerning client would believe that the non-lawyer's work would affect strategic decisions of the case rather than relate to mere tangential matters. In other words, a New York lawyer must keep client expectations in mind when deciding whether to outsource work. Also, a New York lawyer must inform himself or herself as to the different laws and traditions of the country where the work is to be outsourced, with regard to the protection of privileged information, and utilize adequate safeguards such as using hypotheticals, issuing periodic reminders and including contractual provisions that address confidentiality issues. Finally, the Committee defined "appropriate billing" as "no more than the direct cost associated with outsourcing, plus a reasonable allocation of overhead expenses."
The Committee's opinion recognizes the trend toward legal process outsourcing as one that benefits both law firms and their clients. As with any ethics opinion, this opinion too provides some flexibility for New York lawyers with regard to how they conduct their practices. Nevertheless, the opinion is a strong reminder that lawyers who outsource their work remain accountable to client expectations. Thus, professional ethics require that lawyers provide close supervision over the work of intermediaries, no matter how far removed.
--------------------------------------------------------------------------------
Endnotes
1 Available at http://www.nycbar.org/Ethics/eth2006.htm
2 See Tom Mighell, "Outsourcing," Law Practice Today, April 2006, available at http://www.abanet.org/lpm/lpt/articles/slc04061.shtml
3 In response to an advertisement offering legal outsourcing services for immigration law practitioners on Immigration Daily online, Bruce A. Hake, a noted commentator on Immigration Law Ethics, objected in a "Letter to the Editor" that it was "an illegal advertisement for the unauthorized practice of law, which is a criminal offense under the laws of most states in the US." Mr. Hake suggested that American lawyers who outsourced legal work would be subject to per se malpractice liability, as well as professional sanctions such as possible disbarment. Immigration Daily, March 28, 2005, www.ilw.com/immigdaily/digest/2005,0328.shtm.
4 In its opinion, the Committee referenced Ethical Consideration 3-6, which states, "A lawyer often delegates tasks to clerks, secretaries, and other lay persons. Such delegation is proper if the lawyer maintains a direct relationship with the client, supervises the delegated work, and has complete professional responsibility for the work product. This delegation enables a lawyer to render legal service more economically and efficiently."
5 Here the Committee references an opinion of the Committee on Professional Ethics of the New York State Bar Association, which stated that a lawyer may use an outside legal research firm staffed with non-lawyers provided the New York lawyer exercised proper supervision, which entailed scrutiny of the completed work to "assur[e] its soundness." N.Y. State Opinion 721 (1999).
I would like to thank Cyrus D. Mehta for taking the time to edit this article.
This article originally appeared on www.cyrusmehta.com on October 13, 2006
About The Author
Adam Ketcher is an Associate at Cyrus D. Mehta & Associates, PLLC where he works in the area of immigration and nationality law. He received his J.D. in 2006 from Brooklyn Law School where he assisted with research for an upcoming casebook on international refugee law and was the recipient of the Edward V. Sparer Public Interest Law Fellowship. Adam has worked as a legal intern for Catholic Charities" Immigrant and Refugee Department, U.S. Citizenship & Immigration Services, and as a summer law clerk for the Executive Office of Immigration Review, New York City Immigration Court. Adam has taken the New York State Bar Examination and is currently awaiting his results
“ The above article has been reprinted from http://www.ilw.com/articles/2006,1127-ketcher.shtm and LegalEase Solutions LLC does not hold any rights to the same”
Lawyer Creates Cottage Industry as 'Outside' In-House Counsel
Gina Passarella
The Legal Intelligencer
November 22, 2006
For companies that can't afford an in-house lawyer, let alone house one on loan from the outside counsel they can barely afford, one New York lawyer has created a law firm based on a unique marketing of the much talked-about concept of alternative fee arrangements.
He calls himself the "spot GC" and markets his nearly year-old practice to emerging and middle-market companies as a cheaper way to handle sporadic or monthly legal needs.
J. Paul Caulfield created Caulfield LLC while still working as an in-house attorney at an intelligence-gathering corporation. Many of the clients who came to his company did not have an attorney and couldn't necessarily afford New York law firm rates.
"The traditional law firms have to get smart with what these businesses are doing," Caulfield said. "There still is not that widespread solution for these companies."
Caulfield's solution is to eliminate overhead by working at his clients' offices on a project-based fee, a monthly retainer or a reduced hourly fee. His fees, he said, range from an average of $175 an hour to $225 for specialized or time-intensive work.
"I invest in technology over brick and mortar," he said.
One of Caulfield's clients, a New York marketer of financial data for hedge funds, hired him on a monthly basis and pays for 20 hours of work each month. Another client, Inside Lacrosse magazine, hired Caulfield to handle legal and public relations work for the publication after the Duke University lacrosse scandal broke.
James S. Wilber, a consultant with Altman Weil, said Caulfield's concept makes sense and has seen similar models throughout the country for a few years.
"It's another kind of example of temporary employment in the legal profession," he said.
In 1998, Charles B. Brown formed his law firm, Corplaw Associates, in Chicago based on the "law department method."
Brown said clients were underserved by law firms who were often too distant and didn't understand the needs of the businesses. The method he chose to use places attorneys in the client's office, right down the hall from the executives.
Brown has his own office where the seven or so attorneys in the firm each have space. While he offers reduced hourly rates, the focus is more on having an experienced law department attorney in the client's office on a part-time basis.
Brown said his business is more like a traditional law firm and has worked for companies with hundreds of millions of dollars in revenue. Corplaw attorneys might fill in for an attorney on maternity leave or help out if a company is rapidly growing, he said.
The lifetime of the engagements vary, with the average time spent with a client at six months to a year. Brown is working on his sixth year with one of his clients, he said.
The attorneys in his office generally work no more than four days a week with any one client and would normally only have two clients at a time, he said.
There is a ceiling to the use of these types of attorneys, Caulfield said.
"Once you get past 40 or 50 hours a month, then they should really start considering whether to bring in [an in-house attorney]," he said.
Caulfield and those like him do have some competition with big law firms from attorneys who market themselves as doing general counsel work for companies.
Julius M. Steiner of Philadelphia-based Obermayer Rebmann Maxwell & Hippel is chairman of the firm's labor relations and employment law department.
He said he has quoted a flat fee for work performed on an annual basis. For 15 years, the firm represented transportation company Laidlaw in its labor negotiations and employment work as well as other more routine services, all for a flat annual fee, he said.
While Obermayer Rebmann no longer represents Laidlaw, Steiner said the firm now has a similar arrangement with client American Medical Response.
"The outsourcing approach on a fixed fee for certain defined work gives the companies some degree of predictability in terms of cost," he said.
Consultants have said that the concept of alternative fee arrangements offered by law firms has been given more lip service than anything else, however.
Wilber said the use of such arrangements within law firms has happened at a "glacial pace." He said if companies are looking to reduce costs, they shouldn't sit around and wait for law firms to start offering up more opportunities for reduced fees.
Caulfield said law firms who attempt to act as outside general counsel can't compete with him because his billing rates are a third to a half of traditional firms and he doesn't have overhead.
"They can't depart that substantially from ultimately what they have to bring in to function," he said of law firms. "It's impossible for them to compete with me when I have lesser square footage."
Brown said his biggest competition is from the attorneys doing this type of thing out of their home for the short-term. Brown said his advantage is that he is in it for the long run.
Both Brown and Caulfield said this type of law firm model would be a perfect fit for women who are trying to balance a career and family or who are coming back from maternity leave.
Caulfield said that while he is currently a solo practitioner, he would like to grow the number of attorneys in his firm. He said a woman balancing career or family or an attorney who is looking to retire might be a perfect fit.
Bob Carpenter, the publisher of Inside Lacrosse, hired Caulfield to handle his public relations and legal work surrounding the magazine's response to the Duke lacrosse scandal.
The company is small, growing and overworked as it is, Carpenter said. Caulfield helped Inside Lacrosse meet its objectives during that time, and Carpenter said there were several areas in which Caulfield could assist the magazine.
"I don't think the window is really narrow for using someone like Paul," Carpenter said.
Brown has found himself useful not only in helping out with legal work, but helping build the legal departments of some of his clients. He said he often prefers to work with companies who do not yet have a legal department so that he can assist them in finding the right people.
Caulfield will, at times, take his experience as a prosecutor in Manhattan to assist legal departments or other outside counsel with litigation needs, he said.
"The above article has been reprinted from www.law.com and LegalEase Solutions LLC does not hold any rights to the same"
The Legal Intelligencer
November 22, 2006
For companies that can't afford an in-house lawyer, let alone house one on loan from the outside counsel they can barely afford, one New York lawyer has created a law firm based on a unique marketing of the much talked-about concept of alternative fee arrangements.
He calls himself the "spot GC" and markets his nearly year-old practice to emerging and middle-market companies as a cheaper way to handle sporadic or monthly legal needs.
J. Paul Caulfield created Caulfield LLC while still working as an in-house attorney at an intelligence-gathering corporation. Many of the clients who came to his company did not have an attorney and couldn't necessarily afford New York law firm rates.
"The traditional law firms have to get smart with what these businesses are doing," Caulfield said. "There still is not that widespread solution for these companies."
Caulfield's solution is to eliminate overhead by working at his clients' offices on a project-based fee, a monthly retainer or a reduced hourly fee. His fees, he said, range from an average of $175 an hour to $225 for specialized or time-intensive work.
"I invest in technology over brick and mortar," he said.
One of Caulfield's clients, a New York marketer of financial data for hedge funds, hired him on a monthly basis and pays for 20 hours of work each month. Another client, Inside Lacrosse magazine, hired Caulfield to handle legal and public relations work for the publication after the Duke University lacrosse scandal broke.
James S. Wilber, a consultant with Altman Weil, said Caulfield's concept makes sense and has seen similar models throughout the country for a few years.
"It's another kind of example of temporary employment in the legal profession," he said.
In 1998, Charles B. Brown formed his law firm, Corplaw Associates, in Chicago based on the "law department method."
Brown said clients were underserved by law firms who were often too distant and didn't understand the needs of the businesses. The method he chose to use places attorneys in the client's office, right down the hall from the executives.
Brown has his own office where the seven or so attorneys in the firm each have space. While he offers reduced hourly rates, the focus is more on having an experienced law department attorney in the client's office on a part-time basis.
Brown said his business is more like a traditional law firm and has worked for companies with hundreds of millions of dollars in revenue. Corplaw attorneys might fill in for an attorney on maternity leave or help out if a company is rapidly growing, he said.
The lifetime of the engagements vary, with the average time spent with a client at six months to a year. Brown is working on his sixth year with one of his clients, he said.
The attorneys in his office generally work no more than four days a week with any one client and would normally only have two clients at a time, he said.
There is a ceiling to the use of these types of attorneys, Caulfield said.
"Once you get past 40 or 50 hours a month, then they should really start considering whether to bring in [an in-house attorney]," he said.
Caulfield and those like him do have some competition with big law firms from attorneys who market themselves as doing general counsel work for companies.
Julius M. Steiner of Philadelphia-based Obermayer Rebmann Maxwell & Hippel is chairman of the firm's labor relations and employment law department.
He said he has quoted a flat fee for work performed on an annual basis. For 15 years, the firm represented transportation company Laidlaw in its labor negotiations and employment work as well as other more routine services, all for a flat annual fee, he said.
While Obermayer Rebmann no longer represents Laidlaw, Steiner said the firm now has a similar arrangement with client American Medical Response.
"The outsourcing approach on a fixed fee for certain defined work gives the companies some degree of predictability in terms of cost," he said.
Consultants have said that the concept of alternative fee arrangements offered by law firms has been given more lip service than anything else, however.
Wilber said the use of such arrangements within law firms has happened at a "glacial pace." He said if companies are looking to reduce costs, they shouldn't sit around and wait for law firms to start offering up more opportunities for reduced fees.
Caulfield said law firms who attempt to act as outside general counsel can't compete with him because his billing rates are a third to a half of traditional firms and he doesn't have overhead.
"They can't depart that substantially from ultimately what they have to bring in to function," he said of law firms. "It's impossible for them to compete with me when I have lesser square footage."
Brown said his biggest competition is from the attorneys doing this type of thing out of their home for the short-term. Brown said his advantage is that he is in it for the long run.
Both Brown and Caulfield said this type of law firm model would be a perfect fit for women who are trying to balance a career and family or who are coming back from maternity leave.
Caulfield said that while he is currently a solo practitioner, he would like to grow the number of attorneys in his firm. He said a woman balancing career or family or an attorney who is looking to retire might be a perfect fit.
Bob Carpenter, the publisher of Inside Lacrosse, hired Caulfield to handle his public relations and legal work surrounding the magazine's response to the Duke lacrosse scandal.
The company is small, growing and overworked as it is, Carpenter said. Caulfield helped Inside Lacrosse meet its objectives during that time, and Carpenter said there were several areas in which Caulfield could assist the magazine.
"I don't think the window is really narrow for using someone like Paul," Carpenter said.
Brown has found himself useful not only in helping out with legal work, but helping build the legal departments of some of his clients. He said he often prefers to work with companies who do not yet have a legal department so that he can assist them in finding the right people.
Caulfield will, at times, take his experience as a prosecutor in Manhattan to assist legal departments or other outside counsel with litigation needs, he said.
"The above article has been reprinted from www.law.com and LegalEase Solutions LLC does not hold any rights to the same"
Tuesday, November 21, 2006
Shipping Off Shore: Legal Outsourcing and its Effects on Legal Staff
By Ursula Furi-Perry
Customer service, typing and transcription, information technology-outsourcing has been increasingly popular in many industries. It wasn't long before the legal field caught on. Law firms and legal departments have begun to outsource projects for increased efficiency and decreased costs.
Yet outsourcing isn't entirely novel in the law. For example, law firms have long referred unfamiliar projects to other firms that specialize in them. "Outsourcing is in effect subcontracting," explained William Bierce, principal at the New York firm Bierce & Kamerson, P.C., and publisher of the Outsourcing Law and Business Journal. "Outsourcing has been going on forever," Bierce said, but new processes "enable people to identify their business processes and treatments…avoid waste, and outsource items that can't be performed effectively [in-house]." Both domestically and internationally, new legal outsourcing firms have strung up, and existing firms are beginning to carve out a piece of the legal pie.
Tasks that are the best fit for outsourcing include electronic legal research, drafting standard agreements, and correspondence. "We provide market research, business research…intellectual property research, legal research, and emerging-markets research," said Alok Aggarwal, founder and chairman of Evalueserve, Inc., a company focused largely on legal outsourcing. A project is probably right for outsourcing "if it doesn't involve special judgment," said Bierce. "Outsourcing is best for highly repetitive, simple, and structured processes." Large and multi-office law firms, as well as legal departments of large corporations, tend to be outsourcing companies' top clients; "they have an aggregation of demand for this type of work," said Bierce.
As a result of outsourcing, firms may become more efficient and spend less, although actual savings depends on the level of work, the quality of service provided, and the ability to recoup costs from clients, among other factors. Outsourcing may also allow legal professionals to perform jobs of a higher value to clients, freeing them from mundane tasks. "This will definitely help corporations in containing their costs and also help the lawyers and paralegals in the U.S. in moving up the value chain and providing higher value-added work to their client," Aggarwal said. But with subcontracting comes risk. "The general contractor is liable for all failures of the subcontractor and all of the problems the subcontractor creates," said Bierce. Some potential problems may include conflicts of interest, revealing client confidentiality, practicing law without a license, lack of supervision of non-attorney legal staff, and even malpractice. Therefore, firms have to "design a process that mitigates the risk to the client," said Bierce. Implementing security guidelines in communications, encrypting confidential information, and restricting access to computers are just some ways to do so.
Firms are not the only ones worried about potential problems: with outsourcing quickly becoming popular among some law firms, legal staff may also be concerned about the effects outsourcing will have on their positions. "Paralegals who've been traditionally the workforce to manage redundant operations are at risk," Bierce believes. Transcription, document drafting and management, and much legal research seem to be the first few tasks to go. As a result, legal staff who largely perform those duties must be able to learn and grow in their jobs. "Identify your skill sets in a manner that makes you better trained in the law, and work with management to identify ways for getting better," recommended Bierce. "You lose your job if you don't grow and if your business process is not effectively designed for the process to which it's harnessed."
For capable, efficient, and versatile legal staff, there's likely little to worry about. "I do not think that this will revolutionize the American legal system in any big way," predicted Aggarwal. "The amount of 'offshoring' that will happen in this area during the next decade will [correspond to] approximately 2% of the number of lawyers and paralegals that will be employed in the U.S. in 2015." In fact, many firms outsource what Aggarwal calls "overflow work," which may help relieve legal staff from overcrowded dockets. For able legal professionals, that may actually mean work of a higher value and better quality.
"The above article has been reprinted from www.lawcrossing.com and LegalEase Solutions LLC does not hold any rights to the same”
Customer service, typing and transcription, information technology-outsourcing has been increasingly popular in many industries. It wasn't long before the legal field caught on. Law firms and legal departments have begun to outsource projects for increased efficiency and decreased costs.
Yet outsourcing isn't entirely novel in the law. For example, law firms have long referred unfamiliar projects to other firms that specialize in them. "Outsourcing is in effect subcontracting," explained William Bierce, principal at the New York firm Bierce & Kamerson, P.C., and publisher of the Outsourcing Law and Business Journal. "Outsourcing has been going on forever," Bierce said, but new processes "enable people to identify their business processes and treatments…avoid waste, and outsource items that can't be performed effectively [in-house]." Both domestically and internationally, new legal outsourcing firms have strung up, and existing firms are beginning to carve out a piece of the legal pie.
Tasks that are the best fit for outsourcing include electronic legal research, drafting standard agreements, and correspondence. "We provide market research, business research…intellectual property research, legal research, and emerging-markets research," said Alok Aggarwal, founder and chairman of Evalueserve, Inc., a company focused largely on legal outsourcing. A project is probably right for outsourcing "if it doesn't involve special judgment," said Bierce. "Outsourcing is best for highly repetitive, simple, and structured processes." Large and multi-office law firms, as well as legal departments of large corporations, tend to be outsourcing companies' top clients; "they have an aggregation of demand for this type of work," said Bierce.
As a result of outsourcing, firms may become more efficient and spend less, although actual savings depends on the level of work, the quality of service provided, and the ability to recoup costs from clients, among other factors. Outsourcing may also allow legal professionals to perform jobs of a higher value to clients, freeing them from mundane tasks. "This will definitely help corporations in containing their costs and also help the lawyers and paralegals in the U.S. in moving up the value chain and providing higher value-added work to their client," Aggarwal said. But with subcontracting comes risk. "The general contractor is liable for all failures of the subcontractor and all of the problems the subcontractor creates," said Bierce. Some potential problems may include conflicts of interest, revealing client confidentiality, practicing law without a license, lack of supervision of non-attorney legal staff, and even malpractice. Therefore, firms have to "design a process that mitigates the risk to the client," said Bierce. Implementing security guidelines in communications, encrypting confidential information, and restricting access to computers are just some ways to do so.
Firms are not the only ones worried about potential problems: with outsourcing quickly becoming popular among some law firms, legal staff may also be concerned about the effects outsourcing will have on their positions. "Paralegals who've been traditionally the workforce to manage redundant operations are at risk," Bierce believes. Transcription, document drafting and management, and much legal research seem to be the first few tasks to go. As a result, legal staff who largely perform those duties must be able to learn and grow in their jobs. "Identify your skill sets in a manner that makes you better trained in the law, and work with management to identify ways for getting better," recommended Bierce. "You lose your job if you don't grow and if your business process is not effectively designed for the process to which it's harnessed."
For capable, efficient, and versatile legal staff, there's likely little to worry about. "I do not think that this will revolutionize the American legal system in any big way," predicted Aggarwal. "The amount of 'offshoring' that will happen in this area during the next decade will [correspond to] approximately 2% of the number of lawyers and paralegals that will be employed in the U.S. in 2015." In fact, many firms outsource what Aggarwal calls "overflow work," which may help relieve legal staff from overcrowded dockets. For able legal professionals, that may actually mean work of a higher value and better quality.
"The above article has been reprinted from www.lawcrossing.com and LegalEase Solutions LLC does not hold any rights to the same”
Sunday, November 19, 2006
Outlook for Legal Outsourcing after Democratic Sweep of Congress
Outlook for Legal Outsourcing after Democratic Sweep of Congress
Tariq Hafeez, Esq.
President, LegalEase Solutions LLC
With the change of control of the US House and Senate from Republican to Democrat, the future of outsourcing and offshoring may be called into question. The Democratic Party won a comprehensive victory in Congress, and many candidates won local races on a platform against, among other things, the outsourcing of American jobs to Asia. Indeed some political commentators have predicted that globalization-especially outsourcing—is about to become the prime suspect in Congress for much that ails the nation. Moreover, in many industrial cities nationwide like Detroit, where unions/organized labor hold considerable sway over the public and were in many cases instrumental in the Democratic victory at all levels of politics[1], they are demanding legislation to limit outsourcing such as changes in the tax code to reduce job outsourcing.
With that in mind, what is the outsourcing industry saying about the impact of the elections on outsourcing? Is the industry worried? To the surprise of many, the industry as a whole is not much worried with the general sentiment being that irrespective of Americans’ political preferences; outsourcing in the services industry will continue as outsourcing today is a sector of increasingly higher visibility and acceptance. Outsourcing of business services such as law, accounting and business research is continuing to grow both qualitatively and quantitatively. To make the point more poignant, just recently a US Senator, Frank Morse of Portland, Oregon, read out a speech on ‘The Impact of Globalization on Oregon Economy’ prepared by a Bangalore based BPO[2]. Outsourcing is being normalized and accepted at the highest levels.
Notwithstanding the political implications of the Democratic sweep on outsourcing in general, the legal outsourcing industry will most likely not be significantly affected Why? First, the cries against outsourcing focus on jobs lost in middle America amongst the middle class. While in reality many lawyers may find themselves amongst the middle class, the profession as a whole continues to hold itself out as an elite profession outside the sphere of middle class America. The types of jobs that fuel much of the fire when outsourced are those affecting the economically marginalized in this country: the blue collar and middle class workers in manufacturing jobs. Case in point: Detroit, where automobile jobs being offshored to Mexico and Asia have bred a deep rooted opposition to outsourcing. One of the more recent and loudest opponents of outsourcing, Lou Dobbs has entitled his best-selling book, “War on the Middle Class: How the Government, Big Business, and Special Interest Groups Are Waging War on the American Dream and How to Fight Back.” Again, the legal profession would likely fall into the category of warmonger “Big Business/Special Interest” that is out to get the middle class, rather than the victim.
Moreover, while legal outsourcing is in its relative infancy, the one body which could have a direct impact on the industry (other than the IRS) is the legal community (much more affectionately known as “the Bar”). The Bar has voiced little to no concern over legal outsourcing. The Bar, moreover, is hardly homogenous and consists of attorneys in the millionaire and billionaire clubs along with idealistic public interest attorneys who make a lot less than most people realize. In summary, the legal community has not made a loud noise about legal outsourcing in the past few years, and the change of politics in Washington DC will likely not change the position of the Bar on outsourcing.
What does the future hold for legal outsourcing then? Only the future will tell, but the change of guard in Congress will most likely not turn the page on this burgeoning industry.
--------------------------------------------------------------------------------
[1] Union workers voted Democratic in the House races, 67% to 30%. And others in union households voted almost as strongly Democratic, according to exit polls conducted for the Associated Press and the networks. See the Detroit Free Press, Nov. 14, 2006 “With Dems in power, labor ramps up gameplan” Will Lester
[2] See Times of India, Nov. 13, 2006, “US Senator Outsources Speech to India” Mini Joseph Tejaswi
Tariq Hafeez, Esq.
President, LegalEase Solutions LLC
With the change of control of the US House and Senate from Republican to Democrat, the future of outsourcing and offshoring may be called into question. The Democratic Party won a comprehensive victory in Congress, and many candidates won local races on a platform against, among other things, the outsourcing of American jobs to Asia. Indeed some political commentators have predicted that globalization-especially outsourcing—is about to become the prime suspect in Congress for much that ails the nation. Moreover, in many industrial cities nationwide like Detroit, where unions/organized labor hold considerable sway over the public and were in many cases instrumental in the Democratic victory at all levels of politics[1], they are demanding legislation to limit outsourcing such as changes in the tax code to reduce job outsourcing.
With that in mind, what is the outsourcing industry saying about the impact of the elections on outsourcing? Is the industry worried? To the surprise of many, the industry as a whole is not much worried with the general sentiment being that irrespective of Americans’ political preferences; outsourcing in the services industry will continue as outsourcing today is a sector of increasingly higher visibility and acceptance. Outsourcing of business services such as law, accounting and business research is continuing to grow both qualitatively and quantitatively. To make the point more poignant, just recently a US Senator, Frank Morse of Portland, Oregon, read out a speech on ‘The Impact of Globalization on Oregon Economy’ prepared by a Bangalore based BPO[2]. Outsourcing is being normalized and accepted at the highest levels.
Notwithstanding the political implications of the Democratic sweep on outsourcing in general, the legal outsourcing industry will most likely not be significantly affected Why? First, the cries against outsourcing focus on jobs lost in middle America amongst the middle class. While in reality many lawyers may find themselves amongst the middle class, the profession as a whole continues to hold itself out as an elite profession outside the sphere of middle class America. The types of jobs that fuel much of the fire when outsourced are those affecting the economically marginalized in this country: the blue collar and middle class workers in manufacturing jobs. Case in point: Detroit, where automobile jobs being offshored to Mexico and Asia have bred a deep rooted opposition to outsourcing. One of the more recent and loudest opponents of outsourcing, Lou Dobbs has entitled his best-selling book, “War on the Middle Class: How the Government, Big Business, and Special Interest Groups Are Waging War on the American Dream and How to Fight Back.” Again, the legal profession would likely fall into the category of warmonger “Big Business/Special Interest” that is out to get the middle class, rather than the victim.
Moreover, while legal outsourcing is in its relative infancy, the one body which could have a direct impact on the industry (other than the IRS) is the legal community (much more affectionately known as “the Bar”). The Bar has voiced little to no concern over legal outsourcing. The Bar, moreover, is hardly homogenous and consists of attorneys in the millionaire and billionaire clubs along with idealistic public interest attorneys who make a lot less than most people realize. In summary, the legal community has not made a loud noise about legal outsourcing in the past few years, and the change of politics in Washington DC will likely not change the position of the Bar on outsourcing.
What does the future hold for legal outsourcing then? Only the future will tell, but the change of guard in Congress will most likely not turn the page on this burgeoning industry.
--------------------------------------------------------------------------------
[1] Union workers voted Democratic in the House races, 67% to 30%. And others in union households voted almost as strongly Democratic, according to exit polls conducted for the Associated Press and the networks. See the Detroit Free Press, Nov. 14, 2006 “With Dems in power, labor ramps up gameplan” Will Lester
[2] See Times of India, Nov. 13, 2006, “US Senator Outsources Speech to India” Mini Joseph Tejaswi
Saturday, November 18, 2006
Commentary: Outsourcing attorneys can save money, but concerns
St. Louis Daily Record & St. Louis Countian, Oct 3, 2006 by Molly F. Dilbeck, J.D
Managing your practice.
You've been there. Your computer inexplicably stopped working, and now you have to call the 1-800 number to figure out just what is the matter.
When your call is answered, you find yourself speaking to someone on the opposite side of the globe. Why? Because the computer company outsourced its tech-support staff overseas.
Now, imagine calling a 1-800 number and being connected to someone in New Delhi or Tel Aviv in an effort to discuss the finer points of your motion for summary disposition.
Sound farfetched? Maybe not.
In our ever-shrinking world, more and more companies are shipping work out and overseas in an effort to cut costs.
For example, just recently, DuPont announced in Business Weekly its decision to open an office in Manila, staffed by 30 Filipino attorneys who will be analyzing documents for pending litigation and saving an anticipated $6 million in the process. The cost is next to nothing, since most legal outsourcing firms charge between $20 - $75 an hour, depending on the type of work and urgency of the project.
Further, these firms promote their ability to save attorneys the most valuable asset of all - their time.
By farming out legal research, these outsourcing businesses advertise their ability to enable attorneys to practice more efficiently and take on more work with less stress and output.
Money saved and ease of use, however, don't assuage all of the concerns that can arise from the mere mention of outsourcing. The idea of outsourcing causes some to conjure worst-case scenarios, such as the loss of U.S. jobs, or the difficulty in communicating with a person in another country regarding a problem.
Many different worries crop up when the work being outsourced is legal in nature - including confidentiality, ethics, and the relevance of lawyers and support staff in a constantly-changing legal community.
Not surprisingly, legal outsourcing companies don't see the cause for alarm.
In fact, these businesses contend they only want to help attorneys be more efficient, expand their practices and save money, not displace them. Detroit-based LegalEase Solutions, LLC, is one such company.
Founded in 2004, LegalEase was formed with the aim of providing firms with a "competitive edge by adding to their capacity without an increase in their infrastructure costs," says the business' president and general counsel Tariq Hafeez.
Though LegalEase is headquartered in Michigan, it also has an office in India, where much of its work is done.
Moreover, much of LegalEase's staff is comprised of Indian attorneys.
In addition to its U.S. attorneys, LegalEase's "offshore attorneys are qualified from the top law schools in India," the company said in a 2005 interview with the Detroit Legal News. Of course, the idea of a non-American attorney working on a legal document might alarm some attorneys and clients, but LegalEase stresses it conducts "a very stringent and robust initial training program on U.S. constitutional law and the use of online legal databases like LexisNexis."
As "foreign" as it may seem to American lawyers, using foreign and foreign-based attorneys to do American legal research is not unique to LegalEase. Many companies are doing it.
Dhraj Aggarwal of India's Economical Services says his company employs the services of Indian attorneys who are "graduates of the top law schools of India," but "can work on the law of most countries" because the company is an "Internet-based research organization."
Touting India as one of the "most preferred outsourcing destinations," Aggarwal stated his company was capable of serving as a "back-office to U.S.-based attorneys" by providing them with "high- quality, low-cost work." Hafeez concurs, saying his staff functions as "virtual associates" who are "available 24/7."
This availability allows attorneys to then "take on more work or spend time doing what's most important to their practice," without having to increase their overhead costs, he explained.
Further, Hafeez points out each project his attorneys work on is checked and re-checked before an American attorney employed by LegalEase gives the go-ahead for the work to be given to an attorney- client.
Nevertheless, Hafeez cautioned that "the onus lies on the attorneys to review all the work we provide them before they choose to use it."
For those who are interested in off-shoring legal work for cost and efficiency reasons, but are not entirely comfortable with the idea of sending sensitive legal material into the hands of a non- U.S. attorney, the legal outsourcing market provides at least one option.
According to CEO and managing counsel Steven Ettinger, Israel- based SuperLaw not only helps small firms "work larger" by providing them with the "big-firm advantage," but boasts a staff of nearly 50 American attorneys who live and work in Israel.
He explained that all SuperLaw "counselors are American law school graduates, admitted in at least one state, and average more than 10 years of experience."
Managing your practice.
You've been there. Your computer inexplicably stopped working, and now you have to call the 1-800 number to figure out just what is the matter.
When your call is answered, you find yourself speaking to someone on the opposite side of the globe. Why? Because the computer company outsourced its tech-support staff overseas.
Now, imagine calling a 1-800 number and being connected to someone in New Delhi or Tel Aviv in an effort to discuss the finer points of your motion for summary disposition.
Sound farfetched? Maybe not.
In our ever-shrinking world, more and more companies are shipping work out and overseas in an effort to cut costs.
For example, just recently, DuPont announced in Business Weekly its decision to open an office in Manila, staffed by 30 Filipino attorneys who will be analyzing documents for pending litigation and saving an anticipated $6 million in the process. The cost is next to nothing, since most legal outsourcing firms charge between $20 - $75 an hour, depending on the type of work and urgency of the project.
Further, these firms promote their ability to save attorneys the most valuable asset of all - their time.
By farming out legal research, these outsourcing businesses advertise their ability to enable attorneys to practice more efficiently and take on more work with less stress and output.
Money saved and ease of use, however, don't assuage all of the concerns that can arise from the mere mention of outsourcing. The idea of outsourcing causes some to conjure worst-case scenarios, such as the loss of U.S. jobs, or the difficulty in communicating with a person in another country regarding a problem.
Many different worries crop up when the work being outsourced is legal in nature - including confidentiality, ethics, and the relevance of lawyers and support staff in a constantly-changing legal community.
Not surprisingly, legal outsourcing companies don't see the cause for alarm.
In fact, these businesses contend they only want to help attorneys be more efficient, expand their practices and save money, not displace them. Detroit-based LegalEase Solutions, LLC, is one such company.
Founded in 2004, LegalEase was formed with the aim of providing firms with a "competitive edge by adding to their capacity without an increase in their infrastructure costs," says the business' president and general counsel Tariq Hafeez.
Though LegalEase is headquartered in Michigan, it also has an office in India, where much of its work is done.
Moreover, much of LegalEase's staff is comprised of Indian attorneys.
In addition to its U.S. attorneys, LegalEase's "offshore attorneys are qualified from the top law schools in India," the company said in a 2005 interview with the Detroit Legal News. Of course, the idea of a non-American attorney working on a legal document might alarm some attorneys and clients, but LegalEase stresses it conducts "a very stringent and robust initial training program on U.S. constitutional law and the use of online legal databases like LexisNexis."
As "foreign" as it may seem to American lawyers, using foreign and foreign-based attorneys to do American legal research is not unique to LegalEase. Many companies are doing it.
Dhraj Aggarwal of India's Economical Services says his company employs the services of Indian attorneys who are "graduates of the top law schools of India," but "can work on the law of most countries" because the company is an "Internet-based research organization."
Touting India as one of the "most preferred outsourcing destinations," Aggarwal stated his company was capable of serving as a "back-office to U.S.-based attorneys" by providing them with "high- quality, low-cost work." Hafeez concurs, saying his staff functions as "virtual associates" who are "available 24/7."
This availability allows attorneys to then "take on more work or spend time doing what's most important to their practice," without having to increase their overhead costs, he explained.
Further, Hafeez points out each project his attorneys work on is checked and re-checked before an American attorney employed by LegalEase gives the go-ahead for the work to be given to an attorney- client.
Nevertheless, Hafeez cautioned that "the onus lies on the attorneys to review all the work we provide them before they choose to use it."
For those who are interested in off-shoring legal work for cost and efficiency reasons, but are not entirely comfortable with the idea of sending sensitive legal material into the hands of a non- U.S. attorney, the legal outsourcing market provides at least one option.
According to CEO and managing counsel Steven Ettinger, Israel- based SuperLaw not only helps small firms "work larger" by providing them with the "big-firm advantage," but boasts a staff of nearly 50 American attorneys who live and work in Israel.
He explained that all SuperLaw "counselors are American law school graduates, admitted in at least one state, and average more than 10 years of experience."
Technology and Legal secretaries
Ron Friedmann
President
Prism Legal Consulting, Inc.
ron@prismlegal.com
www.prismlegal.com
Starting in the early 1990s, I noticed that secretarial work was changing as a result of widespread lawyer use of PCs. Yet I have seen few articles about this much less smart management reaction.
Already in 1991, I thought secretarial roles needed re-thinking. By 2003, when the main reaction seemed to be tinkering with the ratio, I wrote The Future of Legal Secretaries (Legal Times, May 2003). It suggests testing the concept of secretarial teams.
That article emphasizes matching needs and resources more effectively. Today, law firms have a new option to do so and, at the same time, recast the role of the legal secretary. Earlier this year CBF, a secretarial and document processing outsourcing company, retained me to write a white paper. In it, I explain why outsourcing some secretarial and document processing tasks makes sense. The reasoning applies to many law firm operations.
It’s a mistake to assume that full-time secretaries (plus temps) is the best decision. Outsourcing may be wrong - but decide that consciously, not by inertia.
The issues here affect CIOs two ways. First, if firms do outsource as suggested, that will affect training and systems. And second, the underlying reasoning may drive you to outsource some tech functions.
The chart above illustrates how outsourcing could change secretarial roles. This change and forming teams are not mutually exclusive. In fact, outsourcing can support a team approach.
The above article was published by Mr. Ron Friedman on 11/16/2006 in www.prismlegal.com. and LegalEase Solutions LLC does not hold any rights to the same”
Legal Outsourcing
Indiatimes Id:nair.uma
Legal Outsourcing is obviously the next big thing, but the increase in growth of the market has not been rapid. Quality is still an issue and many law firms, legal departments are still on tenderhooks when it comes to trusting legal work to offshoring companies. In itself companies like LegalEase Solutions LLC (www.legaleasesolutions.com) have found it a challenging task to ensure that every one of their projects meets the exacting and demanding standards of the US legal system. It is a complex and very hands on process to continue exercising quality controls at all levels. 1/3rd of the work undertaken by LegalEase is still done in the US. LegalEase follows stringent quality control procedures. Once a client has contacted LegalEase Solutions and their information is collected, the information is transferred over to lawyers in India, the project is then researched and prepared by them and reviewed by the US attorneys. Quality Check 1 involves a 15 Step Check Performed by Offshore Attorneys. Quality Check 2 is performed by the Managing offshore Attorneys. Quality Check 3 Performed by the US attorneys. Quality Check 4 is performed by the Managing US attorneys. After this it is given back to the client for their review and use of the product. The India-based attorneys have access to Lexis Nexis and other online research tools in order to complete projects from any jurisdiction. Here are a few reasons why you can expect world-class quality from LegalEase o Use of Lexis Nexis and other premier online research tools o All cases cited in any legal memorandum or pleading will be shepardized o All products citing case law will be accompanied by a list of shepardized cases—so you can always be certain that the cases are good law o All finished products are reviewed by US attorneys o We only hire experienced legal professionals in India with a minimum of 5 years legal practice For more information on LegalEase Solutions L.L.C., call1-866-534-6177 or visit the Web site at www.legaleasesolutions.com.
Monday, April 03, 2006 11:31:33 am
Legal Outsourcing is obviously the next big thing, but the increase in growth of the market has not been rapid. Quality is still an issue and many law firms, legal departments are still on tenderhooks when it comes to trusting legal work to offshoring companies. In itself companies like LegalEase Solutions LLC (www.legaleasesolutions.com) have found it a challenging task to ensure that every one of their projects meets the exacting and demanding standards of the US legal system. It is a complex and very hands on process to continue exercising quality controls at all levels. 1/3rd of the work undertaken by LegalEase is still done in the US. LegalEase follows stringent quality control procedures. Once a client has contacted LegalEase Solutions and their information is collected, the information is transferred over to lawyers in India, the project is then researched and prepared by them and reviewed by the US attorneys. Quality Check 1 involves a 15 Step Check Performed by Offshore Attorneys. Quality Check 2 is performed by the Managing offshore Attorneys. Quality Check 3 Performed by the US attorneys. Quality Check 4 is performed by the Managing US attorneys. After this it is given back to the client for their review and use of the product. The India-based attorneys have access to Lexis Nexis and other online research tools in order to complete projects from any jurisdiction. Here are a few reasons why you can expect world-class quality from LegalEase o Use of Lexis Nexis and other premier online research tools o All cases cited in any legal memorandum or pleading will be shepardized o All products citing case law will be accompanied by a list of shepardized cases—so you can always be certain that the cases are good law o All finished products are reviewed by US attorneys o We only hire experienced legal professionals in India with a minimum of 5 years legal practice For more information on LegalEase Solutions L.L.C., call1-866-534-6177 or visit the Web site at www.legaleasesolutions.com.
Monday, April 03, 2006 11:31:33 am
The Inside Scoop on Law Firm Outsourcing
Karen Asner
Although law firms have traditionally outsourced services like security, travel or mail, the allure of Thomas Friedman's "flat" world has some law firms looking hard at whether to outsource other functions.[FOOTNOTE 1] The options are no longer limited to an outside vendor running a service in-house. Instead, firms face an impressive array of options offered around the globe, from Chennai, India, to Wheeling, W.Va. Navigating these decisions requires thoughtful consideration of your business goals and careful planning.
LET YOUR BUSINESS GOALS GUIDE THE STRATEGY
Review of outsourcing options is most often triggered by the desire for cost reduction. Although the lure of potential cost savings and operational efficiency is a powerful siren, outsourcing can offer numerous other benefits that further important business goals:
· Outsourcing can enhance service to clients and lawyers through greater operational coverage and better product area expertise.
· Outsourcing can free up management to focus on other strategic areas for the firm.
· Third-party vendors are more focused on a particular product or service and are more likely to stay abreast of the technological changes and other industry innovations that will further improve service and lower costs.
When White & Case expanded its outsourcing arrangements to include its word processing, creative design and publishing functions, the critical factor aside from cost-efficiencies was the significant potential for improving client and lawyer service. By moving these functions to an outside global vendor, the firm eliminated duplication of staff and equipment, consolidated and cross-trained staff, improved cost efficiencies and set a better firmwide support platform to leverage its global capabilities and 24/7 service. Smaller offices are now able to access improved service on a 24/7 platform that notably upgrades their ability to serve both lawyers and clients.
Similarly, White & Case's objective behind outsourcing a truly professional concierge and conference management service, commensurate with its newly upgraded New York conference center, was to create an environment that supports the firm's client service ethic. Its clients now experience a seamless welcoming reception service, upgraded audiovisual support and streamlined conference booking.
HOW TO EVALUATE THE ARRAY OF OPTIONS
Although cost savings are often touted as the most obvious and achievable benefit of outsourcing, prepare an apples-to-apples comparison of the costs and benefits of keeping a function in-house, or insourcing (keeping it in-house but moving to a lower cost location), versus outsourcing.
Carefully research a vendor's history, capabilities and competitors and definitely follow up with their references. Speak to your peers at other law firms to see what works and doesn't and get additional referrals. Friends outside of the legal profession can share a wealth of information from their experience, since corporations have been outsourcing functions for longer.
Depending on the function, it may be essential to use vendors with law firm experience because they will be familiar with handling confidential information and complying with particular ethical rules.
MANAGE YOUR OUTSOURCING STRATEGY AND PROCESS
Once the vendor has been selected, a detailed roll-out plan must be created. Thoroughly evaluate the work product during the transition phase -- including setting up a "shadow" team that performs the same tasks for comparison. Consider having an on-site project manager from your vendor who will be available for daily communications and who will understand your business.
It must be acknowledged that outsourcing decisions always make staff anxious -- and understandably so. It's crucial, therefore, that staff who are affected by the decision, whether they are moving or staying, be communicated with frankly and supportively. Once the dialogue gets past the anxiety stage, people are eager to look forward to the future and the new opportunities that may unfold.
Once the transition is handled, many fail to achieve the potential benefits because they fail to properly manage and monitor their vendors. Craft an agreement that explicitly documents service requirements and specifies the processes and deliverables up front. It is critical to watch increasing costs over time, as any cost savings that you initially achieved can be quickly eroded.
Also, make sure your contract includes a clear exit strategy, with well-thought-through provisions on how information will be accessed and data gets returned.
Outsourcing arrangements are multifaceted processes that require attention to business goals, human resource issues, technology and overall project management. Whether you decide to venture across the globe or keep things across the street, consider all of these issues and regularly revisit your goals to ensure the arrangement is meeting your ever-changing needs.
Karen Asner is a commercial litigator and an administrative partner at White & Case in New York, where she oversees all administrative aspects of the firm's 36 offices and helps shape firm culture, policies and strategic business objectives.
Law.com's ongoing IN FOCUS article series highlights opinion and analysis from our site's contributors and writers across the ALM network of publications.
::::FOOTNOTES::::
FN1 Thomas L. Friedman, "The World Is Flat" (New York: Farrar, Straus and Giroux, 2006).
Although law firms have traditionally outsourced services like security, travel or mail, the allure of Thomas Friedman's "flat" world has some law firms looking hard at whether to outsource other functions.[FOOTNOTE 1] The options are no longer limited to an outside vendor running a service in-house. Instead, firms face an impressive array of options offered around the globe, from Chennai, India, to Wheeling, W.Va. Navigating these decisions requires thoughtful consideration of your business goals and careful planning.
LET YOUR BUSINESS GOALS GUIDE THE STRATEGY
Review of outsourcing options is most often triggered by the desire for cost reduction. Although the lure of potential cost savings and operational efficiency is a powerful siren, outsourcing can offer numerous other benefits that further important business goals:
· Outsourcing can enhance service to clients and lawyers through greater operational coverage and better product area expertise.
· Outsourcing can free up management to focus on other strategic areas for the firm.
· Third-party vendors are more focused on a particular product or service and are more likely to stay abreast of the technological changes and other industry innovations that will further improve service and lower costs.
When White & Case expanded its outsourcing arrangements to include its word processing, creative design and publishing functions, the critical factor aside from cost-efficiencies was the significant potential for improving client and lawyer service. By moving these functions to an outside global vendor, the firm eliminated duplication of staff and equipment, consolidated and cross-trained staff, improved cost efficiencies and set a better firmwide support platform to leverage its global capabilities and 24/7 service. Smaller offices are now able to access improved service on a 24/7 platform that notably upgrades their ability to serve both lawyers and clients.
Similarly, White & Case's objective behind outsourcing a truly professional concierge and conference management service, commensurate with its newly upgraded New York conference center, was to create an environment that supports the firm's client service ethic. Its clients now experience a seamless welcoming reception service, upgraded audiovisual support and streamlined conference booking.
HOW TO EVALUATE THE ARRAY OF OPTIONS
Although cost savings are often touted as the most obvious and achievable benefit of outsourcing, prepare an apples-to-apples comparison of the costs and benefits of keeping a function in-house, or insourcing (keeping it in-house but moving to a lower cost location), versus outsourcing.
Carefully research a vendor's history, capabilities and competitors and definitely follow up with their references. Speak to your peers at other law firms to see what works and doesn't and get additional referrals. Friends outside of the legal profession can share a wealth of information from their experience, since corporations have been outsourcing functions for longer.
Depending on the function, it may be essential to use vendors with law firm experience because they will be familiar with handling confidential information and complying with particular ethical rules.
MANAGE YOUR OUTSOURCING STRATEGY AND PROCESS
Once the vendor has been selected, a detailed roll-out plan must be created. Thoroughly evaluate the work product during the transition phase -- including setting up a "shadow" team that performs the same tasks for comparison. Consider having an on-site project manager from your vendor who will be available for daily communications and who will understand your business.
It must be acknowledged that outsourcing decisions always make staff anxious -- and understandably so. It's crucial, therefore, that staff who are affected by the decision, whether they are moving or staying, be communicated with frankly and supportively. Once the dialogue gets past the anxiety stage, people are eager to look forward to the future and the new opportunities that may unfold.
Once the transition is handled, many fail to achieve the potential benefits because they fail to properly manage and monitor their vendors. Craft an agreement that explicitly documents service requirements and specifies the processes and deliverables up front. It is critical to watch increasing costs over time, as any cost savings that you initially achieved can be quickly eroded.
Also, make sure your contract includes a clear exit strategy, with well-thought-through provisions on how information will be accessed and data gets returned.
Outsourcing arrangements are multifaceted processes that require attention to business goals, human resource issues, technology and overall project management. Whether you decide to venture across the globe or keep things across the street, consider all of these issues and regularly revisit your goals to ensure the arrangement is meeting your ever-changing needs.
Karen Asner is a commercial litigator and an administrative partner at White & Case in New York, where she oversees all administrative aspects of the firm's 36 offices and helps shape firm culture, policies and strategic business objectives.
Law.com's ongoing IN FOCUS article series highlights opinion and analysis from our site's contributors and writers across the ALM network of publications.
::::FOOTNOTES::::
FN1 Thomas L. Friedman, "The World Is Flat" (New York: Farrar, Straus and Giroux, 2006).
Outsourcing Legal secretaries
Robert J. Ambrogi
As early as 1991, Ron Friedmann thought technology should lead law firms to rethink secretarial roles, he writes at his Strategic Legal Technology blog. In 2003, he wrote an article for Legal Times, The Future of Legal Secretaries, in which he suggested that firms test the concept of secretarial teams in order to save money and improve client service. Now, in a new whitepaper, he presents his case for why law firms should consider outsourcing secretarial and document production tasks.
It should be noted that Friedmann wrote the whitepaper on the dime of an outsourcing company. But his arguments are compelling -- with cost a big one. Consider that secretaries and document processing are typically a firm's third biggest expense after associate salaries and rent. Friedmann estimates that the direct cost of a secretary in a major urban area, factoring in salary, benefits and taxes, is $85,000. That does not include overhead. But, he says, firms use only 80 percent of that secretary's time on the job. Throw in HR issues, variations in workloads and the sometimes poor fit between skills and tasks, and outsourcing begins to look compelling.
Friedmann's overarching point is that law firms should at least consider outsourcing as an option. "Outsourcing may be wrong," he says, "but decide that consciously, not by interia."
As early as 1991, Ron Friedmann thought technology should lead law firms to rethink secretarial roles, he writes at his Strategic Legal Technology blog. In 2003, he wrote an article for Legal Times, The Future of Legal Secretaries, in which he suggested that firms test the concept of secretarial teams in order to save money and improve client service. Now, in a new whitepaper, he presents his case for why law firms should consider outsourcing secretarial and document production tasks.
It should be noted that Friedmann wrote the whitepaper on the dime of an outsourcing company. But his arguments are compelling -- with cost a big one. Consider that secretaries and document processing are typically a firm's third biggest expense after associate salaries and rent. Friedmann estimates that the direct cost of a secretary in a major urban area, factoring in salary, benefits and taxes, is $85,000. That does not include overhead. But, he says, firms use only 80 percent of that secretary's time on the job. Throw in HR issues, variations in workloads and the sometimes poor fit between skills and tasks, and outsourcing begins to look compelling.
Friedmann's overarching point is that law firms should at least consider outsourcing as an option. "Outsourcing may be wrong," he says, "but decide that consciously, not by interia."
Legal KPO in India
The aim of this article is to analyse the growing phenomenon of legal process outsourcing in India (LPO in India), legal knowledge process outsourcing in India (Legal KPO in India), legal business process outsourcing in India (Legal BPO in India), etc. These processes are easy to define but difficult to maintain and manage. As these phenomenon are in their infancy stage lot of law firms and companies are going to claim themselves as the expert service providers in these areas. However, very few of them would be able to meet the qualitative standards of International demand in the long run as there is a gradual shift from BPO to KPO where domain expertise plays the key role.
The advent of Information and Communication Technology (ICT) has transformed the World into a single and global platform. The use of Internet has facilitated many business transactions that were unconceivable a few decades ago. Although all the countries have been benefited from this phenomenon yet its benefits are not equally available as it depends upon many factors like skilled workforce, the policy of the nation, availability of ICT for doing business etc. Although the legal fraternity of the World has not taken the use of ICT seriously yet certain legal business aspects have found favour with them. This is more so regarding Developing Countries like India. With an English speaking skilled legal force, India is undoubtedly the best destination for the following:
(a) Legal Process Outsourcing (LPO),
(b) Legal Business Process Outsourcing (Legal BPO),
(c) Legal Knowledge Process Outsourcing (Legal KPO), etc.
The gradual shift from BPO to KPO is posing a big challenge to Indian outsourcing industry as we are running short of “experts” who can manage domain specific problems. Although the requirements of BPO can be met with success with simple graduates and less skilled employees, yet KPO requires a totally different infrastructure and manpower. Unfortunately, our educational system is not upto the mark to meet the growing and challenging demands of KPO industry. We have to change the educational system and structure so that domain specific experts can be produced at the University level itself.
India is running short of skilled manpower in the fields of Law, Technology, Engineering, etc. It is not the quantity but the quality that would decide the fate of Indian BPO and KPO industry. As far as the legal field is concerned, we must pay more attention to higher studies and post graduation courses like LL.M. A simple LL.B qualification would not be suffice for KPO segment. Further, we must also introduce suitable courses like Cyber law, Intellectual Property Rights, International Trade, etc at the University level so that we may have sufficient number of legal experts. Further, there is a dire need of a “techno-legal perspective” as the future depends more upon techno-legal initiatives rather than pure legal business. Let us hope for the best in this regard.
Posted by Legalease solutions LLC
The advent of Information and Communication Technology (ICT) has transformed the World into a single and global platform. The use of Internet has facilitated many business transactions that were unconceivable a few decades ago. Although all the countries have been benefited from this phenomenon yet its benefits are not equally available as it depends upon many factors like skilled workforce, the policy of the nation, availability of ICT for doing business etc. Although the legal fraternity of the World has not taken the use of ICT seriously yet certain legal business aspects have found favour with them. This is more so regarding Developing Countries like India. With an English speaking skilled legal force, India is undoubtedly the best destination for the following:
(a) Legal Process Outsourcing (LPO),
(b) Legal Business Process Outsourcing (Legal BPO),
(c) Legal Knowledge Process Outsourcing (Legal KPO), etc.
The gradual shift from BPO to KPO is posing a big challenge to Indian outsourcing industry as we are running short of “experts” who can manage domain specific problems. Although the requirements of BPO can be met with success with simple graduates and less skilled employees, yet KPO requires a totally different infrastructure and manpower. Unfortunately, our educational system is not upto the mark to meet the growing and challenging demands of KPO industry. We have to change the educational system and structure so that domain specific experts can be produced at the University level itself.
India is running short of skilled manpower in the fields of Law, Technology, Engineering, etc. It is not the quantity but the quality that would decide the fate of Indian BPO and KPO industry. As far as the legal field is concerned, we must pay more attention to higher studies and post graduation courses like LL.M. A simple LL.B qualification would not be suffice for KPO segment. Further, we must also introduce suitable courses like Cyber law, Intellectual Property Rights, International Trade, etc at the University level so that we may have sufficient number of legal experts. Further, there is a dire need of a “techno-legal perspective” as the future depends more upon techno-legal initiatives rather than pure legal business. Let us hope for the best in this regard.
Posted by Legalease solutions LLC
Wednesday, November 15, 2006
WNS bets on legal outsourcing
By - Priti Bajaj
NEW DELHI: WNS, a NYSE-listed business process outsourcing (BPO) major, is seeing a huge momentum in legal services.
Riding high on the legal process outsourcing wave, WNS has started legal services in Sri Lanka about eight months back and now has over 30 lawyers there. It has also scaled up the existing Pune operations, with more than 80 lawyers to handle the legal services, says Smita Gaikwad, company spokesperson for WNS.
Global spending on legal services is estimated to be at least over $250 billion, with the US accounting for more than two-thirds of the market. Conservative estimates of the current market potential for legal services outsourcing from the US alone are pegged at $ 3-4 billion. This comprises paralegal and research support, contract drafting and revising and contract management, library services, patent and trademark prosecution and litigation support.
Even though legal services segment is relatively newer, it is believed to have significant market potential. Market trends indicate that several international law firms, legal publishing companies and legal research firms are now sourcing legal services from India. Says Sunil Chandiramani, national director, risk and business solutions, Ernst and Young, "Since legal process offshoring is high up in the value chain, it will see exponential growth over the next five years because the value margin is significantly higher there, as compared to voice or transaction services."
Increasing maturity of the BPO industry has prompted businesses to review their service delivery models and to seek ways to leverage resources from lower cost offshore locations. "India, definitely stands to gain from this," says Gaikwad.
With an educated and skilled workforce, the low-rung BPOs have graduated to special BPOs or KPOs, and as specialists from various fields like insurance, law and travel join these KPOs, they have an edge over other low-cost destinations like Phillippines, Vietnam, etc, adds Gaikwad.
One thing that is evident is that BPO has matured into a huge business. A report by McKinsey and Nasscom says India's BPO export revenues will surge 37% by 2010, to touch $25 billion, from the current $7.5 billion.
According to a study undertaken by Hildebrandt International and OfficeTiger in 2004, the top 200 firms in the US spend over $9 billion (45% of their total annual spend of $20 billion) on these services. It is understood that significant portions of these services may be delivered from offshore locations achieving savings of 30-70%.
NEW DELHI: WNS, a NYSE-listed business process outsourcing (BPO) major, is seeing a huge momentum in legal services.
Riding high on the legal process outsourcing wave, WNS has started legal services in Sri Lanka about eight months back and now has over 30 lawyers there. It has also scaled up the existing Pune operations, with more than 80 lawyers to handle the legal services, says Smita Gaikwad, company spokesperson for WNS.
Global spending on legal services is estimated to be at least over $250 billion, with the US accounting for more than two-thirds of the market. Conservative estimates of the current market potential for legal services outsourcing from the US alone are pegged at $ 3-4 billion. This comprises paralegal and research support, contract drafting and revising and contract management, library services, patent and trademark prosecution and litigation support.
Even though legal services segment is relatively newer, it is believed to have significant market potential. Market trends indicate that several international law firms, legal publishing companies and legal research firms are now sourcing legal services from India. Says Sunil Chandiramani, national director, risk and business solutions, Ernst and Young, "Since legal process offshoring is high up in the value chain, it will see exponential growth over the next five years because the value margin is significantly higher there, as compared to voice or transaction services."
Increasing maturity of the BPO industry has prompted businesses to review their service delivery models and to seek ways to leverage resources from lower cost offshore locations. "India, definitely stands to gain from this," says Gaikwad.
With an educated and skilled workforce, the low-rung BPOs have graduated to special BPOs or KPOs, and as specialists from various fields like insurance, law and travel join these KPOs, they have an edge over other low-cost destinations like Phillippines, Vietnam, etc, adds Gaikwad.
One thing that is evident is that BPO has matured into a huge business. A report by McKinsey and Nasscom says India's BPO export revenues will surge 37% by 2010, to touch $25 billion, from the current $7.5 billion.
According to a study undertaken by Hildebrandt International and OfficeTiger in 2004, the top 200 firms in the US spend over $9 billion (45% of their total annual spend of $20 billion) on these services. It is understood that significant portions of these services may be delivered from offshore locations achieving savings of 30-70%.
Wednesday, November 08, 2006
Ten Ways Blogs Boost a Law Firm's Image
Ten Ways Blogs Boost a Law Firm's Image
Edward Poll
Law Technology News
11-02-2006
When done right, blogs are an informative, vibrant calling card that represents you to the world. When done wrong, blogs are a chore and unwelcome expense, and produce little return on your effort. The difference between the two depends on having a realistic understanding of what you face before you start a blog.
Here are 10 tips to help make the experience worthwhile:
1. Hit the target.
The first step is to define, and then target, your ideal audience. Effective blogs speak to specific niche markets. For example, if your target clients are low-income, blue collar consumers, question whether they are likely to be Web-savvy and facile with search tools. (The answer may still be "yes.") If not, a blog might not be a wise investment of your time. As Harvey Mackay said, "If you want to catch bass, you've got to fish where they are."
2. Demonstrate your expertise.
Use your blog to "show and tell" your knowledge, authority and experience. Be specific in your posts, and follow up -- respond to inquiries (and incorporate your posted material into articles, speeches and client updates). This will help your audience learn, over time, how you can assist them, and why they need you and your services and products.
3. Write clearly and concisely.
You aren't writing a legal brief -- rather, think of it as a one-on-one conversation with a client or prospect when you can't meet face-to-face. The best blogs are informal, conversational and demonstrate your expertise and experience. Save the Latin for the judge.
4. Make the commitment.
Blogs get stale fast. They are most effective when they have a steady flow of posts. That's easier said than done -- it takes real dedication, and time. Develop a routine for blogging. Think of working on blog content as the equivalent to working in the garden -- not so much a chore as relaxing time away from the daily grind.
5. Image counts.
You don't go to court in a T-shirt, likewise, pay attention to the look and feel of your blog. All of our activities shape impressions: the way we speak to people, the way we dress, even the way we eat. Some actions may invite interaction, others subtlely repel. Consider carefully the design of your blog, its presentation, color palette, (and of course, first and foremost, its content) to be sure that it reflects you at your best -- your expertise, personality and values.
6. Everything has a cost.
It takes time to maintain a blog. Creating posts and answering e-mail comments can quickly add up. If you devote two hours per week, times 50 work weeks per year, and your billing rate is $200 per hour -- that's $20,000 a year of billable time.
Certainly worth it, if the investment produces a strong return, but time is money, so watch out for the temptation to get addicted beyond the value of your ROI!
7. Do your homework.
One way to keep time and costs down is to learn and use Web tools that help you produce and distribute your blog. For example, you can write several posts at one sitting, but schedule each to appear on a specific day and time using TypePad's "Publish On" feature. Incorporating RSS (really simple syndication) and other tools can help you reach your audience by allowing your readers to "subscribe" to your blog and receive e-mail alerts.
8. Delegate.
Worried that you'll spend too much time blogging? Consider hiring someone to manage the technical aspects of your blog, such as uploading posts and graphics, tracking replies to posts, working on search engine optimization. The expense may be far less than the time spent updating and managing -- no matter how easy with TypePad or other tools -- that take you away from other marketing activities or even from your practice.
9. Remember your professional responsibility.
Delegating the maintenance of a blog doesn't mean abdicating the responsibility. The rules governing professional conduct and advertising vary greatly from state to state. Web sties that openly provide advice and/or solicit clients may be subject to disciplinary regulation, and many states are extending jurisdiction to lawyers who have no presence in their state other than on the Internet.
10. Keep your perspective.
Don't confuse blogs with the second coming of the printing press. Ultimately, they are just another communication vehicle. Most technology innovations over the past decade are just another turn of the wheel in the law's evolution from private club to business.
Attorney Edward Poll is the principal of Venice-Calif.-based LawBiz Management Co. and Edward Poll & Associates Inc. He is the author of the LawBiz Blog and can be reached at edpoll@lawbiz.com..
Edward Poll
Law Technology News
11-02-2006
When done right, blogs are an informative, vibrant calling card that represents you to the world. When done wrong, blogs are a chore and unwelcome expense, and produce little return on your effort. The difference between the two depends on having a realistic understanding of what you face before you start a blog.
Here are 10 tips to help make the experience worthwhile:
1. Hit the target.
The first step is to define, and then target, your ideal audience. Effective blogs speak to specific niche markets. For example, if your target clients are low-income, blue collar consumers, question whether they are likely to be Web-savvy and facile with search tools. (The answer may still be "yes.") If not, a blog might not be a wise investment of your time. As Harvey Mackay said, "If you want to catch bass, you've got to fish where they are."
2. Demonstrate your expertise.
Use your blog to "show and tell" your knowledge, authority and experience. Be specific in your posts, and follow up -- respond to inquiries (and incorporate your posted material into articles, speeches and client updates). This will help your audience learn, over time, how you can assist them, and why they need you and your services and products.
3. Write clearly and concisely.
You aren't writing a legal brief -- rather, think of it as a one-on-one conversation with a client or prospect when you can't meet face-to-face. The best blogs are informal, conversational and demonstrate your expertise and experience. Save the Latin for the judge.
4. Make the commitment.
Blogs get stale fast. They are most effective when they have a steady flow of posts. That's easier said than done -- it takes real dedication, and time. Develop a routine for blogging. Think of working on blog content as the equivalent to working in the garden -- not so much a chore as relaxing time away from the daily grind.
5. Image counts.
You don't go to court in a T-shirt, likewise, pay attention to the look and feel of your blog. All of our activities shape impressions: the way we speak to people, the way we dress, even the way we eat. Some actions may invite interaction, others subtlely repel. Consider carefully the design of your blog, its presentation, color palette, (and of course, first and foremost, its content) to be sure that it reflects you at your best -- your expertise, personality and values.
6. Everything has a cost.
It takes time to maintain a blog. Creating posts and answering e-mail comments can quickly add up. If you devote two hours per week, times 50 work weeks per year, and your billing rate is $200 per hour -- that's $20,000 a year of billable time.
Certainly worth it, if the investment produces a strong return, but time is money, so watch out for the temptation to get addicted beyond the value of your ROI!
7. Do your homework.
One way to keep time and costs down is to learn and use Web tools that help you produce and distribute your blog. For example, you can write several posts at one sitting, but schedule each to appear on a specific day and time using TypePad's "Publish On" feature. Incorporating RSS (really simple syndication) and other tools can help you reach your audience by allowing your readers to "subscribe" to your blog and receive e-mail alerts.
8. Delegate.
Worried that you'll spend too much time blogging? Consider hiring someone to manage the technical aspects of your blog, such as uploading posts and graphics, tracking replies to posts, working on search engine optimization. The expense may be far less than the time spent updating and managing -- no matter how easy with TypePad or other tools -- that take you away from other marketing activities or even from your practice.
9. Remember your professional responsibility.
Delegating the maintenance of a blog doesn't mean abdicating the responsibility. The rules governing professional conduct and advertising vary greatly from state to state. Web sties that openly provide advice and/or solicit clients may be subject to disciplinary regulation, and many states are extending jurisdiction to lawyers who have no presence in their state other than on the Internet.
10. Keep your perspective.
Don't confuse blogs with the second coming of the printing press. Ultimately, they are just another communication vehicle. Most technology innovations over the past decade are just another turn of the wheel in the law's evolution from private club to business.
Attorney Edward Poll is the principal of Venice-Calif.-based LawBiz Management Co. and Edward Poll & Associates Inc. He is the author of the LawBiz Blog and can be reached at edpoll@lawbiz.com..
Thursday, November 02, 2006
New York Times: Law Firms Are Starting to Adopt Outsourcing
Law Firms Are Starting to Adopt Outsourcing
By JULIE CRESWELL
For years, outsourcing has been a dirty word inside the world of white-shoe law firms.
While certain law firms hired companies to handle travel or records storage, most drew the line at sending client billing or confidential documents out of their offices, let alone out of the country.
A number of large law firms, though, are starting to tiptoe onto far-flung shores.
The latest is Clifford Chance, one of the largest law firms in the world with 29 offices in 20 countries, which will announce plans today to consolidate and move big chunks of its administrative functions like accounting and technological support to an operation in Delhi, India, by next spring.
The shift to India could eventually result in up to $18 million a year in savings, the law firm estimates.
While corporate America has embraced sending clerical, customer and technical support functions overseas, law firms have been much more reluctant to do so. Their chief concern is that confidential client documents or information could be leaked, stolen or simply lost.
But in the race to offer large global corporate clients like I.B.M. or the Gap around-the-clock attention and legal advice, many law firms are opening up satellite offices all over the world.
While good for the clients, the costs of operating dozens of offices across the globe leave law firms aghast. Therefore, some are looking at ways to centralize many back-office functions but also to move them out of high-cost cities like New York and London and into either lower-cost regions of the United States or abroad to places like India.
“The fully loaded cost for a clerical person in a major metropolitan area can run $85,000 to $100,000 a year,” said Mark Santiago, chief executive of International CoSourcing Group, a management consultant for law firms. “If you multiply that by 70 or 100 people, you have a major cost center, and law firms are being put under great pressure from corporations to reduce their bills.”
Despite the attractive economics, a mere trickle of law firms have actually moved operations out of their headquarters or to overseas locations. Yet some are betting that law will be the next industry to shift parts of its operations to lower-cost regions of the world.
“We think legal is going to be our biggest market going forward,” said Liam Brown, the president and chief executive of Integreon Managed Solutions, an outsourcing firm that is building the center that Clifford Chance will use in India.
About six years ago, a rival to Clifford Chance, Baker & McKenzie, opened an office in the Philippines to do word processing for offices in the Asia Pacific region. Today, that office, with Baker & McKenzie employees as its staff, creates spreadsheets and PowerPoint presentations; monitors the firms’ entire computer network; and handles about 40 percent of the financial work for the Pacific region, including client billing.
“We have a lot of small offices, and they can’t have 24-hour word-processing support or somebody who is going to make them a high-quality Power Point presentation,” said Craig Courter, chief operating officer with Baker & McKenzie.
Clifford Chance is following a similar model with its move to India. It will be the anchor client for a 45,000-square-foot operation being built by Integreon. Integreon will manage the center, but Clifford Chance will oversee the employees.
Clifford hired Integreon about two years ago to handle some of its word-processing functions. This step will involve moving certain accounting activities, like accounts payable, and technical support functions to the Indian site, said Amanda Burton, the director of global business services for Clifford Chance. Ms. Burton said client billing would not be done in the overseas office, at least for now.
“Nothing is in the ‘do not touch’ basket,” Ms. Burton said. “We just have to make sure that what we do initially works.”
Many other law firms are taking a similar baby-step approach to sending work overseas.
About a year ago when White & Case, another law firm, considered hiring an outside company in India to handle word-processing activities, it wanted to make sure documents going over its computer network could not be intercepted or that individuals working in India could not print out the documents or take them home.
And while Richard McKenna, the chief administrative officer for White & Case, said he had been happy with the work the outside firm had done and that some marketing functions had now also been moved overseas, he had concerns about sending other documents too far from home.
“We do continue to look at outsourcing as a way to improve efficiencies and manage infrastructure costs, but it’s not a quick decision that we would make,” he said.
By JULIE CRESWELL
For years, outsourcing has been a dirty word inside the world of white-shoe law firms.
While certain law firms hired companies to handle travel or records storage, most drew the line at sending client billing or confidential documents out of their offices, let alone out of the country.
A number of large law firms, though, are starting to tiptoe onto far-flung shores.
The latest is Clifford Chance, one of the largest law firms in the world with 29 offices in 20 countries, which will announce plans today to consolidate and move big chunks of its administrative functions like accounting and technological support to an operation in Delhi, India, by next spring.
The shift to India could eventually result in up to $18 million a year in savings, the law firm estimates.
While corporate America has embraced sending clerical, customer and technical support functions overseas, law firms have been much more reluctant to do so. Their chief concern is that confidential client documents or information could be leaked, stolen or simply lost.
But in the race to offer large global corporate clients like I.B.M. or the Gap around-the-clock attention and legal advice, many law firms are opening up satellite offices all over the world.
While good for the clients, the costs of operating dozens of offices across the globe leave law firms aghast. Therefore, some are looking at ways to centralize many back-office functions but also to move them out of high-cost cities like New York and London and into either lower-cost regions of the United States or abroad to places like India.
“The fully loaded cost for a clerical person in a major metropolitan area can run $85,000 to $100,000 a year,” said Mark Santiago, chief executive of International CoSourcing Group, a management consultant for law firms. “If you multiply that by 70 or 100 people, you have a major cost center, and law firms are being put under great pressure from corporations to reduce their bills.”
Despite the attractive economics, a mere trickle of law firms have actually moved operations out of their headquarters or to overseas locations. Yet some are betting that law will be the next industry to shift parts of its operations to lower-cost regions of the world.
“We think legal is going to be our biggest market going forward,” said Liam Brown, the president and chief executive of Integreon Managed Solutions, an outsourcing firm that is building the center that Clifford Chance will use in India.
About six years ago, a rival to Clifford Chance, Baker & McKenzie, opened an office in the Philippines to do word processing for offices in the Asia Pacific region. Today, that office, with Baker & McKenzie employees as its staff, creates spreadsheets and PowerPoint presentations; monitors the firms’ entire computer network; and handles about 40 percent of the financial work for the Pacific region, including client billing.
“We have a lot of small offices, and they can’t have 24-hour word-processing support or somebody who is going to make them a high-quality Power Point presentation,” said Craig Courter, chief operating officer with Baker & McKenzie.
Clifford Chance is following a similar model with its move to India. It will be the anchor client for a 45,000-square-foot operation being built by Integreon. Integreon will manage the center, but Clifford Chance will oversee the employees.
Clifford hired Integreon about two years ago to handle some of its word-processing functions. This step will involve moving certain accounting activities, like accounts payable, and technical support functions to the Indian site, said Amanda Burton, the director of global business services for Clifford Chance. Ms. Burton said client billing would not be done in the overseas office, at least for now.
“Nothing is in the ‘do not touch’ basket,” Ms. Burton said. “We just have to make sure that what we do initially works.”
Many other law firms are taking a similar baby-step approach to sending work overseas.
About a year ago when White & Case, another law firm, considered hiring an outside company in India to handle word-processing activities, it wanted to make sure documents going over its computer network could not be intercepted or that individuals working in India could not print out the documents or take them home.
And while Richard McKenna, the chief administrative officer for White & Case, said he had been happy with the work the outside firm had done and that some marketing functions had now also been moved overseas, he had concerns about sending other documents too far from home.
“We do continue to look at outsourcing as a way to improve efficiencies and manage infrastructure costs, but it’s not a quick decision that we would make,” he said.
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