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.


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