Post a CommentLegal Processing Outsourcing – Do You Need It? – Do You Want It?
6/11/2008 One of the latest trends in the legal practice is outsourcing some of the work to outside firms and overseas companies. With legal fees at most firms ranging from $300 to $1,000 per hour, clients seeking to reduce costs may welcome the use of personnel and companies that keep their costs down. The question is should a law firm take advantage of this trend and outsource some of their legal work. The simple answer is, "That depends."
What is Outsourcing
Outsourcing is the use by a law firm of attorneys, paralegals, and others outside of the firm to perform certain tasks. The retained law firm may use any person or firm located within the United States or overseas, most often India, to perform these tasks at a price much lower than would be charged by the law firm. An associate in a large law firm may earn well over $150,000 per year and bill the client for the associate's work at $300 per hour. The law firm may be able to outsource work to a local attorney at $50 to $75 per hour or to India at $20 to $40 per hour. It can readily be seen that the savings to the client would be substantial.
What May be Outsourced
Whenever the expertise of the attorney hired by the client is not needed, the task is a candidate for being outsourced. Tasks currently being outsourced include:
Drafting initial pleadings
Drafting answers
Composing interrogatories
Drafting requests for production of documents
Drafting deposition notices
Drafting notices to compel discovery
Drafting standard motions for continuances
Examining documents to respond to document requests
Compiling lists of documents and numbering them
Legal research
Drafting standard contracts
Drafting standard releases
Preparing letters to clients and others
Collating time sheets
Billing clients
Accounting for client funds
Some of the work will, of necessity, be outsourced to only those who are attorneys, either here or elsewhere. Other work, such as secretarial or bookkeeping jobs, may be outsourced to firms that provide such services.
What Should Not Be Outsourced
A client comes to an attorney to represent that client in respect to a legal matter. The client relies on the attorney's knowledge and experience, as well as the attorney's ability to handle to situation. This would include negotiating a disputed issue or participating in an adversary proceeding. There are also sensitive areas where outsourcing would not be appropriate.
Anything involving national security should probably remain in house. Cases involving trade secrets present potential problems of disclosure of those trade secrets.
While attorneys in India are well trained and fully competent, their use of the English language is different from that in the United States. If a law firm outsources work to India, it may prefer to write appellate briefs and memoranda of law in-house, utilizing research provided by the Indian attorneys. For the same reason, amended pleadings, complex motions, and other out-of-the-ordinary documents should probably not be outsourced.
Outsourcing Firms
Some law firms have established relationships with a particular lawyers or paralegals and use them when extra help or reduced costs are needed. Many law firms utilize the services of firms that provide temporary help. The temporary help might be paid directly by the law firm or by the temporary service. Responsibility for supervising the work remains with the law firm.
There are a growing number of American firms that outsource work to India. The work is sent out and received electronically. Supervision of the work may be performed by the American firm or by a manager in India. Because of the time difference, work sent out during the day can be worked on and perhaps completed overnight.
Privacy Considerations
It is not clear to what extent the work performed by outside firms would be fully protected. When demanded as part of a request for production, the law firm would argue that whatever work was outsourced is protected under the attorney work-product privilege. Anyone seeking the documents would argue that the use of an intermediary, the firm that provided the attorneys in India, broke the chain of confidentiality.
Concerns have also been raised as to whether any of the American privacy and privilege laws apply to companies located in India. These concerns have been raised, but not resolved, in respect to medical reports and credit information.
With the electronic transfer of information, there is always the possibility of hackers breaking into the transmission of information and electronic documents. Any law firm considering outsourcing must be assured that proper encryption protocols are adopted.
Billing for Outsourced Services
There is no doubt that a law firm may not bill for services that were outsourced at the rate that would have been charged had the work been performed in house. However, it is reasonable to bill the client for something a bit higher than the amount charged by the outside firm. There are costs involved in gathering the information to send to the outsourced firm, following up on any requests, logging in responses and work product, and accounting for time.
It should also be noted that the time discussing the case with the outsourced firm and reviewing the final product may be billed at the regular hourly rate of the attorney who deals with the outside firm.
Quality
There are those who argue that outsourcing to temporary employees or local employees will provide inferior quality to that available in India, where the best and brightest are hired. It is true that many firms seek those Indians who went to law school in the United States. It is also true that firms in India seek quality help. Neither of these means that local temporary help is limited to those who cannot get full-time jobs with high power law firms. There are attorneys who do not want the pressure of a high power firm. Others want more flexibility in scheduling time off work and work hours. However, outsourcing to India is a business that is still in its infancy, and many high quality lawyers are more than willing to work for an outsourcing firm.
Attorneys in India at outsourcing firms, while earning much less than attorneys in the United States, have a much lower cost of living. An attorney in India earning $20,000 per year can lead the life of a person in the upper middle class; not so for someone in the United States.
There are supervisors who work with the attorneys in India to assure the quality of the product. Pleadings are checked to make sure they are accurate and complete. Motions are checked to make sure they present the proper issue with sufficient facts and supporting precedent. Methods have been devised to track the enormous amount of electronic documents that must be reviewed as part of a document request. In other words, there has been a concerted effort to assure stateside attorneys that the Indian work product will be a superior one.
Ultimate Responsibility
Regardless of who performs the work, the attorney hired by the client is responsible to the client for providing the best service possible. The attorney is required to sign all pleadings, which should require that the attorney read the pleadings for accuracy and object when errors are found. While it is not clear who will be held liable for any mishap as between the outsourced law firm and the hired law firm, it is clear that the firm hired by the client is liable to the client for any mistakes.
The retained firm must keep a close eye on the statute of limitations to make sure that there are no violations. Pleadings, motions, and answers must be timely filed. Research must include the latest cases and decisions. The quality of the product must reflect the quality of the law firm. Return to Career GuidanceBack to top
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