A passage to India: making outsourcing pay

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Published on 11/10/08

The American Bar Association's Formal Opinion 8—45, issued in August, states the obvious: A lawyer may outsource work to lawyers and non—lawyers when such support is appropriate to represent the interests of clients, but the outsourcing lawyer is responsible for all the work done. This formal approval includes several parameters for the outsourcing lawyer. The fee charged to clients for outsourced work must be reasonable. Clients should be informed of, and may need to consent to, the arrangement. The outsourcing lawyer must not assist in the unauthorized practice of law and must supervise the outsourced work to assure competency and quality.

It's clear that a lawyer who outsources practice activities will soon become more a manager of legal services and less of a hands—on lawyer. Some can handle this role change, some cannot.

This is particularly true for firms of all sizes that connect via the Internet to the growing pool of highly educated legal talent in countries where the use of English is widespread, with India being the prime example.

Such offshore legal service providers can reduce by up to 80 percent the cost of legal services such as transcription, data entry, legal research, document review and patent searches. However, they pose a significant challenge for the outsourcing lawyer or firm - both from the ethical standpoint of responsibility, and the business standpoint of management.

So, just how does one outsource legal services to a location such as India? Speaking with lawyers who have done this has shown me the basics of locating and using global legal talent.

Firms that rely on local recruiters for hiring find that they pay more than they expect, as the recruiter cost is added to the recruits' compensation. At least one firm I spoke with advertised on the Indian version of Monster.com for $100 a month and got hundreds of qualified responses from applicants.

Firms tend to hire persons who have an undergraduate degree in English and no more than two years of experience in Indian law (so that they do not have to unlearn old habits to provide the services American firms expect).

Most firms will want to review credentials and conduct interviews remotely, then go to India for final interviews and hiring. Some firms seek to set up their operation as an Indian company, which can take weeks to do.

The credentials of new hires can be vetted online, particularly if they are graduates of a Top 10 Indian law school. Firms have found it best to hire fully credentialed lawyers but for practical purposes to regard them as paralegals, which still gives the Indian lawyers a substantial pay boost by their standards.

They also prefer to locate the lawyers at a dedicated facility (with air conditioning and high speed Internet) in a major city with international air service such as Mumbai or New Delhi; power supplies and personal access in the countryside are too uncertain.

These are simple considerations, and such outsourcing remains the exception rather than the rule. But lawyers can no longer ignore how global technology flattens the cost of legal service. With deeper understanding of global outsourcing logistics and ethics, more lawyers and law firms will inevitably join the new wave.