British Firms Catch Outsourcing Fever
It appears that Magic Circle firms have fallen in love with outsourcing. Most American associates will hope that like Mad Cow disease, the outsourcing craze stays on English side of the ocean. The Lawyer reports:
Allen & Overy (A&O) has become the first magic circle firm to outsource legal work as an increasing number of UK firms embrace legal process outsourcing (LPO) in a bid to reduce their overheads.The firm has partnered with LPO provider Integreon to outsource basic litigation document review to teams in New York and Mumbai, in what could generate a 30-50 per cent cost saving.
Anybody think we’ll see some geographic hypocrisy in the comment thread? Outsourcing to New York = good, outsourcing to Mumbai = bad? Or will everybody simply agree that outsourcing = apocalyptic?
After the jump, The Lawyer has an excellent chart that shows us where British firms stand with regards to outsourcing.
Outsourcing could be a disaster for Biglaw associates. And it hasn’t even started in earnest yet:
This is the first time that a magic circle firm has outsourced legal work. Rivals Clifford Chance and Linklaters have both outsourced support functions, while Clifford Chance has a wholly-owned Indian subsidiary that carries out document review work and other legal support tasks previously undertaken by onshore paralegals and trainees.
The Lawyer posts an overview about outsourcing at major British firms:

Are the English giving us a preview of our American legal future? I don’t know, but I’m starting to put two of every kind of junior associate on a big ass boat, just in case.
A&O signs outsourcing deal with LPO provider Integreon [The Lawyer]
Earlier: Prior ATL coverage of outsourcing




Comments
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Ichiban
What's an ass boat?
I shaved my balls for this?
furst?
That's ludicrous, unless demanded by clients that understand the tradeoff they are getting. American firms' clients repeatedly emphasized that they wanted [Skadden, Wachtell, Davis Polk, Wilmer . . . . ] attorneys reading all documents; not contract attorneys. So the firms began staff attorney programs where they had more in-depth knowledge of the doc reviewers' abilities. Farming it overseas to a bunch of unknowns is laughable.
Future? How about the present.
We currently outsource legal work overseas and to non-associate attorneys. US firms use contract attorneys, staff attorneys, and overseas firms to perform document review and diligence. It's been happening for several years now.
I read this story on the ABA Journal yesterday and I wondered why it was such news . . .
I don't understand how (on the American side) this isn't consider UPL.
Are ass boats used to catch ass lobsters?
2,
Good reading. A big-ass boat is a very large boat. But Elie's talking about an ass boat that happens to be large.
Ass boats set sail for the North Atlantic, where they cast out nets for ass lobsters.
Haven't you watched Deadliest Catch?
DEY TURK R JERBS!
Good thing America didn't have so many colonies.
= fewer places to send jobs.
My firm has been strongly considering outsourcing certain types of work. A partner recently asked me to take a look at the potential cost savings the firm could benefit from by outsourcing. After a lot of careful anaysis and review, I came the conclusion that, yes, outsourcing could save money for the firm, albiet not as large as some would think. I prepared a report with my findings and delivered it to the partner. He asked me to stay to discuss, the report, and we engaged in a long discussion. 45 minutes into the conversation, my mind began wondering. The partner noticed and questioned whether I really cared about saving the firm money. To which I replied...Do I Care? I instructed the partner to look at me when I talk to you boy! I've given fucking 22 years to this country! 22 years! I've seen boys blown up over the pacific, thier guts strewn out over rice paddies in vietnam! So believe me when I say I give a shit!
CHECK YOU TRAPS
just hope they don't screw up! good luck defending a legal malpractice for missing an obvious one in doc rev by pointing at mumbai.
Firms are outsourcing? Deal with it. You went to law school and took out all those loans. Don't blame me just because no one told you life was gonna be this way. Your jobs a joke, you're broke, your love life's D.O.A.. It's like you're always stuck in second gear. And it hasn't been your day, your week, your month,or even your year.
Haha Bitches. Told you so. Enjoy the comming storm, as will I. I prepared.
-Noah
I'm really not too scared. I don't want to be arrogant or rude, but I have training and an analytical ability that can't be replicated no matter how many foreigners you throw at an issue. Admittedly, this will impact a number of law students, but if anyone didn't see this coming, they're a little silly. The legal education realm has been severely over saturated for the past decade. But there will always be a demand for creative lawyers who can do things that other people just can't do. Work hard and be one of those lawyers - I hope when I graduate in another 6 months I'm one them.
15 - I'll be there for you!
So let me get this straight. If I drop a hell of a lot of money on a top firm, they will send the work to some random foreign guy? Why not just hire a more moderately priced US firm?
17: While you may have legal training that can't be outsourced, that's generally irrelevant. I'm a practicing corporate attorney in New York. I get to do actual work that involves document drafting, negotiating with clients, etc. However, many of my litigation counterparts spend the first 2-3 years of their legal lives on doc review and making binders. You don't know what that means yet, but the truth is, ANYONE will a high school education could do it. It has little to do with the law and requires training in software, not analytical methods. In fact, it should be outsourced. The only reason it's not is because we have been able to charge for it before. But times have changed and clients will no longer allow that.
As the amount of information to wade through increases exponentially, we're going to need two things:
First, we will need an army of people to wade through the information.
Second, and sequentially, we will need a few people to program software that can do the same thing for a fraction of the cost.
I'd worry more about #2 than I would about #1. What happened when everything went digital? A ton of people in the telecom industry lost their jobs. This, too, will happen in the legal industry. Lawyers had better prepare NOW to edit and parse code - this skill will be as essential as case analysis in 10 years.
This ones for you, Chappy!
Doug Masters, USAF
@21: 20 here--nice timing on your post. We're on the same page. Doc review will be all about software, not people, and sure as hell not trained attorneys.
Will clients at least be allowed to mail part of their payment directly to the ABA? 19 is onto something and that is that big firms that send work overseas will try to keep it all hush hush...otherwise clients will be more likely go to former partners who've peeled off.
21 - can you explain why lawyers will need to edit and parse Code?
25 -
Not 21, but I know what he's getting at.
Ever played with Acrobat's OCR feature? (or even a high end scanner that scans directly into text pdfs?)
Text recognition software is getting better all the time. I wouldn't say we're that far off from a time when the initial levels of document review (Flagging etc) could be automated.
The docs are fed into the software, with someone to feed it information it can use and it analyzes the text and spits out a much smaller section of documents that might be triggered. Rather than several attorneys working around the clock to do review, the software could do a lot of it and reduce that to the work for one or two attorneys to review what the software has already flagged.
But this will require attorneys who know how to use the software, and such software will always be complicated before it is simple.
I'm still in bed at ten
And work began at eight
What is the minimum size of an asslobster that is considered a keeper?
Melvin Chesler
ELIE: Talk about whether people still scheduled to start in Jan will actually start in Jan. Is there any point when we can feel safe before the given start date?
This will be a net gain for society if it helps make legal services more accessible.
Doc review aside, you really get what you pay for with outsourcing. If the firms can make a better margin on shipping work overseas, then I guess there's no stopping it. Personally, I'd rather pay higher overall rates to a firm that is making a lower margin on non-outsourced work. The drop-off in quality is always very noticeable.
IN HOUSE SECURE?
Despite lawyerly exceptionalism, it seems that the legal industry is not immune to the utilization of cheap third party labor. How shocking. Maybe it will uncover most of the current profession for what it is: a bloated and inefficient industry justifying its costs through the overutilization of an elaborate sorting mechanism.
ATL should outsource Elie. That would be a terrific way to increase diversity.
Could a Good Samaritan law be used to stop this process?
I don't see any hypocrisy. Most folks in the US use ENGLISH as their primary language. Mumbai, not so much.
25 - Sorry for being vague. Here's why:
As the amount of information that needs to be examined increases, the increase in cost will provide incentives for software engineers to design programs that can accurately review the information for significance. People are working on this now, of course.
Programs will be designed that allow users to code for exactly how they want the information analyzed (similar to lexis search functions, but more complicated). The users won't need to be able to write software code, but they will need to be able to write out the user code to determine the specific search algorithms based on the kinds of material they're looking for.
For example, in a patent litigation case, you're looking for diagrams in a vast database (several hundred terabytes). You can't text search them, but you can search by size, shape, appearance, etc. If you're looking for a diagram depicting a specific circuit integration (for example), you can write the user code to search for the size, shape, and appearance that it would have in the diagram. The "smart software" would use your parameters based on its own search algorithms to provide the relevant material.
Would a lawyer have to do this? Not necessarily, but that's how it would work best. Only lawyers know exactly what they're looking to prove in a case - either they have to do it themselves or they have to hire IT guys specifically for this one relatively simple task.
/end long and rambling description
- 21
Doc review is definitely going to India. So if you are a contract lawyer now, you have no future.
Lovells has been using Mexican attorneys for years: http://www.lovells.com/Lovells/OnlineServices/MexicanWave/Mexican+Wave.htm
Can Walruses perform doc review?
This should result in a more efficient allocation of labor and capital in the economy and thus should generate greater overall wealth.
26 - I like your explanation better.
- 21
PE's funeral was very touching, and JaKe burst into tears during the eulogy. Many strippers from Rick's Cabaret were in attendance.
Generate more overal wealth, the majority of vast majority of which will be in the hands of the very rich. It is a great plan for them, just like free trade. For the rest of us, not so much. It is the end of the empire. At one point, some dude was sitting in Rome complaining about the min. hour requirements and how he was getting screwed on this bonus while at the same time the powers that be were outsourcing everything to the Vandals, Goths, etc.
43, almost all of the very rich are first-generation wealthy. So whose fault is it that you're not one of them?
The waaambulance might come around if you whine some more though.
LATHAM received a BOTTOM HALFER ranking from ACC.
No wonder they had to layoff so many people.
MASS LAYOFFS = POORLY MANAGED SHIT FIRM
We'll take em in the air, Doug.
Col. Masters
Nice work, Elie: "hope that like Mad Cow disease, the outsourcing craze stays on THE English side of the ocean."
Elie,
You're going to need a bigger boat. A lot of junior associates are kosher.
Best,
Noah
37
When did professional doc reviewers ever have a future? These people never should have gone to law school to begin with.
Student loans need to become dischargable. There are too many people stuck in this RANCID profession because of these fuckin loans. Let these people get out and move onto something more productive.
Dirty Sanchez is the managing partner at Lovells' Mexican Wave.
50
Agree. Say you get Lathamed by Latham as a first year. Your career is fucked and you and society would be better off if you did something productive instead of desperately trying to find some sort of legal gig in hopes that you can repay your miserable student debt over a period of 60 years.
Companies can get out of debt when things go bad. Why don't we treat student loans the same way?
52, because you signed a contract for loans that are not dischargeable in bankruptcy.
Personal responsibility secure.
I think Partner Emeritus really left. Please stop publishing the murder novel.
Am I the only one who thinks it's odd that Linklaters is outsourcing leisure? Does firm management have a thing for Indian girls?
52, stop trying to make "Lathamed" happen. It's not going to happen!
19
TITCR
56
do a google search for Lathamed
53
Because no one has ever broken a contract before, and certainly not during a severe economic downturn.
53
Um, no idiot . Taking on loans when you have good grades and a 160k job lined up is not being irresponsible. Did you know that Latham was going to Latham > half the first years?
It was retarded to ever make student loans nondischargable.
Despite good planning things go wrong unexpectedly. Biglaw has taught this lesson quite brutally to first years and rescindees who barely got their foot in the door.
Sorry, but these people should be able to get out. Besides, it's a waste of their talent to have them doing the thankless legal bitchwork that awaits many of them.
". . . the outsourcing craze stays on English side of the ocean."
THE ENGLISH SIDE
OMG
@ 36,
Why do I get the feeling you're a patent lawyer who majored in CS in undergrad?
Also, your vision of the future is absurd. The major role of a lawyer is not the pursuit of the perfect boolean search.
doc review.
"Also, your vision of the future is absurd. The major role of a lawyer is not the pursuit of the perfect boolean search."
That vision of the future makes more sense than having dozens of staff attorney monkeys reviewing documents when you could write code to do it more efficiently.
Most lawyers are, and have always been, paper-pushers. Don't pretend that it's any other way.
What's the problem with outsourcing shit work? Isn't that sort of like arguing that I shouldn't outsource cleaning my toilet? What halfway competent attorney with any real responsibilities would want to do doc review? Why do you think partners don't do it? I say anything that makes it less likely that I have to waste my life reviewing documents for privilege or responsiveness is a good thing. Indians are just cheaper than TTT grads (and smarter too).
Why do British law firms have such silly names?
Ovary? Eversled? Lovehell?
Might as well just go with Hell Hole.
17 - I assume you're taking the piss, mate. Plenty of unemployed creative thinkers with skilzzz out there.
Indian high school student > TTT grad.
And math was not included in the above. If that was the case then :
Average indian elementary school child > top of class TTT grad.
59, you are free to break a contract and not pay your student loans, but don't try to whine and get out of the consequences (wage garnishment, etc).
60, sorry all I heard was the "waaa waa waa" coming out of your mom's basement. I mean, it's not like first-year lawyers have ever been laid off before.
"The major role of a lawyer is not the pursuit of the perfect boolean search."
It looks like someone hasn't used lexis/westlaw lately.
40, that sounds right in theory, and I've often thought this as well about automation. But all I can see is the opposite effect. It therefore must be that although greater overall wealth is created, "a rising tide does NOT raise all boats" and the wealth becomes concentrated in the hands of the few who either 1)randomly happen to be in charge 2)have the skills that are still not possible to automate.
educational loans should absolutely be dischargeable. To anyone who disagrees, please present a reasonable distinction between them and regular debt to show why they should not follow the same rule.
A 2nd grader could perform document review. The law firm is still going to charge the client hundreds of dollars an hour for each man-hour spent on document review, all the while paying the person doing the document review $20 - $30 an hour.
What is the point of going to a major firm if you are going to have Apu randomly forwarding privileged material to your advesary and throwing away anything helpful to you? Kind of self defeating to hire Biglaw to do something and then do something like that.
Th is needs to be cracked down on by the courts. You cannot allow people in overseas jurisdictions to effectively practice law in the U.S. At some point will there be Indian rainmakers pitching Indian super law firms to the I-bankers. Why stop at doc review? If foreigners can learn the discovery rules governeign document review, they can certainly learn how to prepare 10Ks, and M& A agreements.
To 20:
I'm glad you are now a "corporate lawyer" after you came up the ropes as a junior attorney doing grunt work under more-senior attys. However, I would file your attitude under "P" for pulling-the-ladder-up-after-yourself. And I'd like to know who you think is going to train all the future "corporate lawyers" of America once all the low level jobs are sent overseas. Pay attention to the bigger picture asshole, and not just the savings to greedy corporations.
Besides firing a lot of people, now they are killing their remaining people with over 300 hour months non-stop and still would not hire any new people just to make more and more money for partners. At the same time, they are seconding their people who could have been helping to suck up to clients. Once market really turns in terms of hiring, everybody who is decent will leave for normal hours and no pay raise (that would only bring latham to market) will help. Latham will have to hire again, but they will not get the caliber of people they used to have cause of their horrible reputation and loss of good culture. This will percepitate their continued fall in the rankings.
Latham & Watkins is no longer Latham (a cool jewish guy with a decent personality) but rather Watkins (a British douchebag squeezing every penny out of people and throwing them out when they are close to making partner).