Outsourcing to India draws Western Lawyers(nytimes.com)
nytimes.com
Outsourcing to India draws Western Lawyers
http://www.nytimes.com/2010/08/05/business/global/05legal.html
9 comments
I'm one of those U.S. lawyers who outsourced himself to India. I did not do it for lack of a job elsewhere. I'm a Columbia Law graduate and one of the founding partners of a successful New York and London based media law firm. I went to India enthusiastically, to take part in a much-needed revolution in the way legal services are delivered in the West.
Imagine a new legal landscape where high-quality services are affordable. Imagine deals getting done, because the attorneys don't kill them, with overlawyering and overcharging. Contemplate court cases and other disputes being resolved on their merits, rather than simply on the basis of whether one side cannot or will not pay the absurdly high costs of litigation. Think about legal professionals located in places that suit the interests of clients, rather than in the most expensive parts of the most expensive cities in the world. Consider the resultant savings when legal bills are based on services, not real estate. Envision deals and cases staffed by the most talented and enthusiastic lawyers available. Open your mind to the possibility that some of those lawyers are in India. I know from experience that they are.
And consider the fact that this kind of outsourcing actually creates more legal jobs in the West, rather than cutting them. Every time a deal is done, or a litigation is waged, because legal services are suddenly affordable, it means more work for the Western lawyers involved in supervision, editing, negotiating, and/or appearing in court. This is not only a dream. It is happening every day, thanks to legal outsourcing in India.
For example, a Fortune 100 client of my law firm specifically requested that the legal research and analysis needed for a series of multi-million-dollar deals in the U.S. be done by Indian attorneys at our offshore operation in Mysore. This is a situation where, if not for a Western law firm’s off-shoring capabilities, no lawyers would have been hired, because typical Western legal fees would have made it prohibitive. The work would have been done either in-house, or not at all. Because the India team made it possible for the deals to happen, Western law firms ultimately got more business, handling the otherwise non-existent transactions.
A similar phenomenon has happened in litigation, where corporate clients have chosen to defend themselves against meritless lawsuits, using both U.S. and Indian lawyers. The most high-profile examples are some of the cases filed in Los Angeles against comedian Sacha Baron Cohen. They have been dismissed instead of settled, because of the successful teamwork among attorneys in the U.S. and India. Without legal outsourcing, there might have been no U.S. lawyers hired for any significant litigation work at all, because frivolous cases often are settled at the outset, just to avoid the usual U.S. litigation costs. The off-shoring of legal work is leading to a new breed of benign tort reform, as defendants facing bogus or inflated tort claims are choosing to litigate and win. This in turn discourages such claims. And the money that otherwise would be spent by defendants on nuisance payouts can be plowed by corporations right back into the U.S. economy.
Does any of this threaten the existence of U.S. law firms? No, unless you want to define American law firms as inherently dinosaur-like, and incapable of changing to avoid extinction. No, the threat is not to law firms themselves, but to an outmoded model of law practice that clients increasingly will not tolerate. We are witnessing the start of a positive, paradigm shift in the way that legal services will be delivered in the West.
Some law firms are embracing the change, and reaping rewards from it. One example is our own law firm. As a result of setting up our own legal outsourcing company in India, our law firm is receiving more client revenue, not less. This is coming in part from (a) existing clients who send us “elective” legal work that otherwise would never be performed, due to cost, but which is not a problem when our U.S. lawyers are paid only to supervise and edit the work of attorneys in India, and (b) new clients who come to our law firm only because of our reputation for developing an alternative to the old model.
So there is no need to start making funeral arrangements for the U.S. legal industry. Forward-thinking law firms will adapt, embrace legal off-shoring, and learn how to make it serve not only the interests of their clients, but their own.
Russell Smith SmithDehn LLP SDD Global Solutions http://www.sddglobal.com
Imagine a new legal landscape where high-quality services are affordable. Imagine deals getting done, because the attorneys don't kill them, with overlawyering and overcharging. Contemplate court cases and other disputes being resolved on their merits, rather than simply on the basis of whether one side cannot or will not pay the absurdly high costs of litigation. Think about legal professionals located in places that suit the interests of clients, rather than in the most expensive parts of the most expensive cities in the world. Consider the resultant savings when legal bills are based on services, not real estate. Envision deals and cases staffed by the most talented and enthusiastic lawyers available. Open your mind to the possibility that some of those lawyers are in India. I know from experience that they are.
And consider the fact that this kind of outsourcing actually creates more legal jobs in the West, rather than cutting them. Every time a deal is done, or a litigation is waged, because legal services are suddenly affordable, it means more work for the Western lawyers involved in supervision, editing, negotiating, and/or appearing in court. This is not only a dream. It is happening every day, thanks to legal outsourcing in India.
For example, a Fortune 100 client of my law firm specifically requested that the legal research and analysis needed for a series of multi-million-dollar deals in the U.S. be done by Indian attorneys at our offshore operation in Mysore. This is a situation where, if not for a Western law firm’s off-shoring capabilities, no lawyers would have been hired, because typical Western legal fees would have made it prohibitive. The work would have been done either in-house, or not at all. Because the India team made it possible for the deals to happen, Western law firms ultimately got more business, handling the otherwise non-existent transactions.
A similar phenomenon has happened in litigation, where corporate clients have chosen to defend themselves against meritless lawsuits, using both U.S. and Indian lawyers. The most high-profile examples are some of the cases filed in Los Angeles against comedian Sacha Baron Cohen. They have been dismissed instead of settled, because of the successful teamwork among attorneys in the U.S. and India. Without legal outsourcing, there might have been no U.S. lawyers hired for any significant litigation work at all, because frivolous cases often are settled at the outset, just to avoid the usual U.S. litigation costs. The off-shoring of legal work is leading to a new breed of benign tort reform, as defendants facing bogus or inflated tort claims are choosing to litigate and win. This in turn discourages such claims. And the money that otherwise would be spent by defendants on nuisance payouts can be plowed by corporations right back into the U.S. economy.
Does any of this threaten the existence of U.S. law firms? No, unless you want to define American law firms as inherently dinosaur-like, and incapable of changing to avoid extinction. No, the threat is not to law firms themselves, but to an outmoded model of law practice that clients increasingly will not tolerate. We are witnessing the start of a positive, paradigm shift in the way that legal services will be delivered in the West.
Some law firms are embracing the change, and reaping rewards from it. One example is our own law firm. As a result of setting up our own legal outsourcing company in India, our law firm is receiving more client revenue, not less. This is coming in part from (a) existing clients who send us “elective” legal work that otherwise would never be performed, due to cost, but which is not a problem when our U.S. lawyers are paid only to supervise and edit the work of attorneys in India, and (b) new clients who come to our law firm only because of our reputation for developing an alternative to the old model.
So there is no need to start making funeral arrangements for the U.S. legal industry. Forward-thinking law firms will adapt, embrace legal off-shoring, and learn how to make it serve not only the interests of their clients, but their own.
Russell Smith SmithDehn LLP SDD Global Solutions http://www.sddglobal.com
Can't wait for someone to sue for malpractice when confidential documents go viral, originating from a leak in India.
I believe the average case in India's civil courts is over 5 years and I would guess most companies are judgment proof and insurance won't cover outsourced work.
I believe the average case in India's civil courts is over 5 years and I would guess most companies are judgment proof and insurance won't cover outsourced work.
As the crisis moves forward we will probably see a fraction of every profession moved to developing countries. Either by Western professionals who move there to enjoy the lower cost of living or outright replacement by outsourced professionals. So this doesn't really surprise me.
I've started to think about outsourcing as a long-overdue redistribution of wealth & as such I'm not opposed to it: if you can work more efficiently by outsourcing, you should outsource. Most employees in the West are spoiled brats & deserve to be shaken a little anyway.
I've started to think about outsourcing as a long-overdue redistribution of wealth & as such I'm not opposed to it: if you can work more efficiently by outsourcing, you should outsource. Most employees in the West are spoiled brats & deserve to be shaken a little anyway.
>Most employees in the West are spoiled brats & deserve to be shaken a little
How do you prove this?
How do you prove this?
Most people in the West are way higher up on Maslow's pyramid than people in the developing world. There's no arguing with basics like availability of clean water, food, clothing, healthcare. After your basics are covered it's up to you to decide whether you work your ass off improving yourself or settling for the status quo of luxury that living in Western society provides.
Whenever I come back from a developing country I think "We're fucked & we deserve it". People in developing countries are just as capable & ingenious; they are more likely to work hard because they see a path of progress in front of them. In the West we have become so accustomed to our luxuries that instead of working harder, we settle for the status quo far too often.
Whenever I come back from a developing country I think "We're fucked & we deserve it". People in developing countries are just as capable & ingenious; they are more likely to work hard because they see a path of progress in front of them. In the West we have become so accustomed to our luxuries that instead of working harder, we settle for the status quo far too often.
But isn't life all about living happily?
"Most employees in the West are spoiled brats & deserve to be shaken a little anyway."
Many have been shaken a lot by the effects of outsourcing.
Many have been shaken a lot by the effects of outsourcing.
But no-one wants to live in a world like that. Imagine
* All airlines are like RyanAir
* All restaurants are fast food
* All supermarkets are Lidl
* All music is Autotune
* All clothes are polyester
So if we outsource stuff to India, all the sit-down resturants in the United States will be forced to close?
What?
What?
If there isn't a sufficiently large class of people with both the money and the leisure time to be able to support the restaurant industry; yes.
It's like this, if people who were earning enough to afford a decent sized apartment in a safe neighborhood with enough left over to eat out once in a while are all fired and replaced by overseas workers; their disposable income spending goes away too. And thus all of the businesses that were dependent on their being customers go away too.
It's like this, if people who were earning enough to afford a decent sized apartment in a safe neighborhood with enough left over to eat out once in a while are all fired and replaced by overseas workers; their disposable income spending goes away too. And thus all of the businesses that were dependent on their being customers go away too.
If we outsource lawyers, now everyone who was previously a lawyer can do other productive work; to keep things simple, imagine they all become maids/housekeepers. After this transition, we get the same legal services we had before (but provided by different people) and some people have cleaner houses.
This may be bad for the lawyers and people in India who need legal services, but it's good for everyone else.
This may be bad for the lawyers and people in India who need legal services, but it's good for everyone else.
But maids and dishwashers don't eat out as often or as well as journeyman lawyers. What happens to places subject to this type of dislocation is similar to what happens to ecosystems undergoing desertification; fewer species, and the ones that survive are hardier and use far fewer resources. The trattorias go away, and all that's left are taco stands and bento carts.
It's certainly true that Legal Grounds Cafes (a chain of coffee shops which is often situated near courthouses) might suffer. But on the other hand, a consumer of legal services has more money to spend on restaurant meals.
Over the past 20-30 years, we have outsourced a huge amount of labor to other countries, and we outsourced even more of it to machines. And yet, we are more prosperous, have more consumer goods, and we generally eat out more often. Why is that?
(Incidentally, I generally find that the truck food is superior to restaurant food in Jersey City. I love thetacotruck and the H1B cart isn't bad either. Au Bon Pain, meh.)
Over the past 20-30 years, we have outsourced a huge amount of labor to other countries, and we outsourced even more of it to machines. And yet, we are more prosperous, have more consumer goods, and we generally eat out more often. Why is that?
(Incidentally, I generally find that the truck food is superior to restaurant food in Jersey City. I love thetacotruck and the H1B cart isn't bad either. Au Bon Pain, meh.)
we get the same legal services we had before (but provided by different people)
Yes that is the theory, but in practice I've yet to encounter a situation where outsourcing is as seamless as that. Generally communication overhead goes up and quality of service goes down. Ask anyone who's ever been put through to an outsourced call centre. Or spent more time writing a spec for an outsourced IT worker to implement 10 timezones away than it would have taken them to do the work themselves.
The only people outsourcing is actually good for is those managers who are going to get a bonus for saving money this year and no downside in five years when the friction between the parts of the organization has reached the level that it seizes up and everything has to be brought back in-house.
Yes that is the theory, but in practice I've yet to encounter a situation where outsourcing is as seamless as that. Generally communication overhead goes up and quality of service goes down. Ask anyone who's ever been put through to an outsourced call centre. Or spent more time writing a spec for an outsourced IT worker to implement 10 timezones away than it would have taken them to do the work themselves.
The only people outsourcing is actually good for is those managers who are going to get a bonus for saving money this year and no downside in five years when the friction between the parts of the organization has reached the level that it seizes up and everything has to be brought back in-house.
They will if "what's the cheapest option, I don't care about the quality" becomes the default choice. Outsourcing is a symptom, not the root cause.
As long as a sufficient number of people care about quality, quality won't go away. People still go to the symphony, wear fancy American-made clothes, eat out at resturants, fly business class, and shop at farmers' markets. These things are more expensive than the alternatives, but it's not that they've gotten more expensive so much as the alternatives didn't used to exist. For example, before airline deregulation, only the well to do could afford to fly. Before industrialized food, the urban poor lived in poverty and malnourishment, with infant and child death rates comparable to what you'd expect to see in developing countries today.
Also, part of living in a capitalist society is you have no right to tell other people how to spend their money.
Also, part of living in a capitalist society is you have no right to tell other people how to spend their money.
Oh absolutely.
Some routes I fly are only serviced by Ryanair, and I sometimes see business travelers who buy two seats so they can put their work next to them. No doubt they, or at least their companies, are delighted at how much money they're saving compared to BA. I keep meaning to ask one, are you working so hard so you can take your family on holiday to Butlin's in Skegness?
Some routes I fly are only serviced by Ryanair, and I sometimes see business travelers who buy two seats so they can put their work next to them. No doubt they, or at least their companies, are delighted at how much money they're saving compared to BA. I keep meaning to ask one, are you working so hard so you can take your family on holiday to Butlin's in Skegness?
Doesn't sound that far off from the world we actually live in.
"Most employees in the West are spoiled brats & deserve to be shaken a little anyway."
Sure, we should know our place like good little slaves, right? Hauteur and arrogance are not a valid basis for rational argument.
Sure, we should know our place like good little slaves, right? Hauteur and arrogance are not a valid basis for rational argument.
Pangea3 a firm mentioned in that report is funded by
Sequoia Capital
http://www.linkedin.com/pub/greg-mcpolin-esq/3/938/8a1
[deleted]
Lawyers have always got one eye on who holds the risk regarding professional negligence claims - if offshore companies are willing to assume this risks and are insured then I can see them being pretty popular for some kinds of work.
I can imagine some pretty interesting international litigation arising from this!
I can imagine some pretty interesting international litigation arising from this!
From the article:
"Employees at legal outsourcing companies in India are not allowed by Indian law to give legal advice to clients in the West, no matter their qualifications. Instead, legal outsourcing companies perform a lot of the functions that a junior lawyer might do in a American law firm."
Given that they're not giving legal advice, I can't see them assuming the risk of professional negligence claims.
"Employees at legal outsourcing companies in India are not allowed by Indian law to give legal advice to clients in the West, no matter their qualifications. Instead, legal outsourcing companies perform a lot of the functions that a junior lawyer might do in a American law firm."
Given that they're not giving legal advice, I can't see them assuming the risk of professional negligence claims.
As technology has improved the capital investment required to develop a modern economy has greatly reduced. Improvements in communications, computers, electronics, and shipping can allow anywhere to become a modern city -- e.g. dubai. So I'd expect skilled workers to move to cheaper areas and maintain/improve their quality of life.
As I second to that in principal, I do also have my doubts. India, China and the other emerging economies do have some drawbacks regarding quality of life (some more, some less): infrastructure, legal system, existing and/or arising environmental problems ..., just to name a few. Most western countries still have advantages of location, which might get more important in the nearer future. Just some thoughts ...
Although quality of life in the whole of India or China is less than in the West, quality of life in a well-defined portion (e.g. city area) of these developing countries will often be competitive, e.g. Dalian in China.
As for infrastructure, I recently rode on the recently completed Wuhan to Guangzhou high-speed railway, cruising at average speed of 330km/hr, now the fastest railway in the world.
India beats China regards reliability of legal system, though many Shenzhen-based ventures use Hong Kong for legal activities. And of course India's internet is more open.
As for infrastructure, I recently rode on the recently completed Wuhan to Guangzhou high-speed railway, cruising at average speed of 330km/hr, now the fastest railway in the world.
India beats China regards reliability of legal system, though many Shenzhen-based ventures use Hong Kong for legal activities. And of course India's internet is more open.
The USA's "terrible" railroad network is actually the best railroad network for transporting bulk goods of any country in the world. It's old but it actually works vary well.
You read that recent Economist article didn't you? Anyways it was an interesting article - I was amazed rail freight charges are lower in America than India
Although quality of life in the whole of India or China is less than in the West,
quality of life in a well-defined portion (e.g. city area) of these
developing countries will often be competitive, e.g. Dalian in China.
It's been 20yrs since I visited India, but I remember Delhi, Mumbai, and Calcutta each had a newer part of the city where living was easier.
China doesn't seem to have the the crime problems of many larger Western cities, or the "no-go zones" of US cities, but of course the price is less freedom.
Many Westerners though enjoy living in a different environment, such as India or China, for a few years anyway, though not many would want to spend the rest of their lives there.
Overall, it seems most Chinese I talk to in China would emigrate to the US, Canada, or Australia if they could [though I admit my sample is skewed, i.e. Chinese who take the trouble to approach me to talk in English].
China doesn't seem to have the the crime problems of many larger Western cities, or the "no-go zones" of US cities, but of course the price is less freedom.
Many Westerners though enjoy living in a different environment, such as India or China, for a few years anyway, though not many would want to spend the rest of their lives there.
Overall, it seems most Chinese I talk to in China would emigrate to the US, Canada, or Australia if they could [though I admit my sample is skewed, i.e. Chinese who take the trouble to approach me to talk in English].
There is also a movement to using "neutral" countries as locations to arbitrate serious international commercial disputes as an alternative to normal litigation.
>move to cheaper areas and maintain/improve their quality of life
Why would moving to a cheaper area improve your quality of life? If living there costs less the pay will be less as well. This wont hurt you with commodity goods too much because those will be cheaper but the things you'll probably like to have won't be much cheaper. For example, an iPhone 4 isn't going to come unlocked for $99 just because you're in India.
Why would moving to a cheaper area improve your quality of life? If living there costs less the pay will be less as well. This wont hurt you with commodity goods too much because those will be cheaper but the things you'll probably like to have won't be much cheaper. For example, an iPhone 4 isn't going to come unlocked for $99 just because you're in India.
Another day - another article on outsourcing. This is not particularly new or newsworthy i think. All kinds of grunt work across different industries will move to cheaper locations , its just inevitable.
India seems to remain THE outsourcing destination for information-based industries, whether software, legal work, accounting gruntwork, securities analysis or whatever.
Seems like the last 4 yrs has seen a sudden growth in legal work going there which will no doubt transform that industry the way IT has been. Will Hollywood someday move everything to Bollywood, as Canada and NZ become more expensive?
That's already happening: http://www.businessweek.com/globalbiz/content/jun2008/gb2008...
That is not outsourcing in any sense of the word. It is an Indian film company entering into a joint venture with a hollywood major.
http://community.nytimes.com/comments/www.nytimes.com/2010/0...
"I'm one of those U.S. lawyers who outsourced himself to India. I did not do it for lack of a job elsewhere. I'm a Columbia Law graduate and one of the founding partners of a successful New York and London-based media law firm. I went to India enthusiastically, to take part in a much-needed revolution in the way legal services are delivered in the West. Imagine a new legal landscape where high-quality services are affordable. Imagine deals getting done, because the attorneys don't kill them, with overlawyering and overcharging. Contemplate court cases and other disputes being resolved on their merits, rather than simply on the basis of whether one side cannot or will not pay the absurdly high costs of litigation. Think about legal professionals located in places that suit the interests of clients, rather than in the most expensive parts of the most expensive cities in the world. Consider the resultant savings when legal bills are based on services, not real estate. Envision deals and cases staffed by the most talented and enthusiastic lawyers available. Open your mind to the possibility that some of those lawyers are in India. I know from experience that they are.
..."