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.

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[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