Outsourcing

Alleged shoplifter Shannon Marketic, in happier times.

* Congratulations to the best LGBT lawyers under 40! Check out the list — perhaps you know some of them? [National LGBT Bar Association]

* Speaking of gays in the law, if you’re obsessing over Judge Vaughn Walker’s sexual orientation, stop it. Just stop it. [Huffington Post]

* First Rudolph Giuliani’s daughter gets busted shoplifting beauty products, and now the same thing happens with a former Miss USA. The lesson: beauty products are way too expensive. [CBS / Crimesider]

* You think legal outsourcing is only going to affect the lives of junior associates? As Larry Ribstein explains, it’s very likely that outsourcing will lead to a fundamental change in the way we regulate lawyers and law firms. [Forbes]

* The only person who can get away with acting like Judge Judy is Judge Judy. [Bad Lawyer]

* Ann Althouse thinks peep-toe shoes are just fine — and has fabulous taste in shoes herself, by the way. [Althouse]

* How come all of the top philanderers are men? That’s just sexist. [Law and More]

Well, it was only a matter of time before the lawyers started to go where the work is. And, if you’ve been paying attention, you know that the work is in India.

Western-trained lawyers are heading to India, to manage the country’s burgeoning legal outsourcing resources. From the New York Times (gavel bang: WSJ Law Blog):

India’s legal outsourcing industry has grown in recent years from an experimental endeavor to a small but mainstream part of the global business of law. Cash-conscious Wall Street banks, mining giants, insurance firms and industrial conglomerates are hiring lawyers in India for document review, due diligence, contract management and more.

Now, to win new clients and take on more sophisticated work, legal outsourcing firms in India are actively recruiting experienced lawyers from the West. And U.S. and British lawyers — who might once have turned up their noses at the idea of moving to India or harbored an outright hostility to outsourcing legal work in principle — are re-evaluating the sector.

Mumbai to 8,743,800 rupees? Not quite, not yet at least…

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Are Biglaw firms outsourcing legal work, or not? We don’t know, because apparently firms don’t want clients to know. The ABA Journal reports that most firms declined to even answer an outsourcing questionnaire:

About 83 percent of the 30 responding law firms declined to participate in the survey, according to Fronterion, the Chicago-based outsourcing consulting firm that conducted the study. Fronterion managing principal Michael Bell believes a majority of top law firms are using legal outsourcing providers, at least on an ad hoc basis, but they are reluctant to admit it because of the sensitivity of the issue.

Apparently all that criticism of the quality of international LPOs has made firms afraid to talk about outsourcing.

But since we’re dealing with top law firms, not talking =/= not doing…

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Is this a “terrible job” or “the inevitable future of the legal economy”? Note: those two answers aren’t mutually exclusive.

The University of Michigan Law Schoolthe 9th-best law school in America — is now posting job opportunities from India.

Has it really gotten bad enough that graduates from a top law school should consider international LPO opportunities? Yes, yes it has….

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It’s been a while since we checked in with the coming junior associate apocalypse that is legal outsourcing. Rest assured, LPOs around the globe are working hard to make sure that the Biglaw junior associate becomes extinct — at least as we know it.

There’s a fascinating article on Law21 that discusses the evolution of legal process outsourcing — and what LPOs need to do next:

Still in its relative infancy, legal process outsourcing has already had a huge impact on the legal services marketplace: scoring major deals with the likes of Microsoft and Rio Tinto, garnering the attention of private-equity investors, and helping to expose the degree to which law firms have overcharged for the simplest legal work, among other accomplishments. But this impact has set off two important chains of events.

The first affects LPOs themselves: they now need to move their value proposition beyond cost savings in a market they helped to make more sophisticated. The second affects everyone: the legal profession’s response to LPO is having an unexpected effect on how legal work is distributed and how legal resources are allocated.

Some law firms still seem to be fighting the last war and are committed to fending off outsourcing until the bitter end. But other firms are preparing themselves for the next war: remaining the primary legal advisor to their clients in a world where the clients themselves can go to a number of providers to get the work done…

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I have always held a special place in my heart for Georgetown University. I was born on campus at Georgetown University Hospital. My father received his J.D. from the Law Center, and I am an alumnus of Georgetown Prep. I was also very lucky to attend Hoya basketball games as a child and watch Patrick Ewing dominate the college ranks.

Now I have another reason to love Georgetown: Jim Michalowitz. You see, Georgetown University Law Center is one of the few schools with an e-discovery blog. I have highlighted it before on Gabe’s Guide. So you can imagine how thrilled I was to discover that Jim had actually taken time out of his busy schedule to write a response to my ATL post that was highly critical of the legal outsourcing of e-discovery work to non-attorneys here and overseas.

With the title, “You Can’t Trust Them Foreigners – Outsourcing Document Review,” it’s of little surprise that Mr. Michalowitz — advisory board member of Georgetown University’s CLE e-Discovery Institute, Six Sigma enthusiast, and proponent of foreign legal outsourcing — took a different take on the issue.

And, you know what? He was so right. I just don’t trust them foreigners. I didn’t know it until I read his post, but it all makes perfect sense now.

Here are some of Mr. Michalowitz’s conclusions about my original arguments against outsourcing legal work to non lawyers:

  • My position on legal outsourcing was extreme
  • Using foreign or non-attorneys would equal a poor or lower quality work product
  • Foreign lawyers might as well be considered non- or “not-real” lawyers

Mr. Michalowitz brings up some good points; however, he either has some fundamental misunderstandings of — or is falsely characterizing — my views on legal outsourcing. So, I thought that I would take the time to nicely clarify any misconceptions he might have. Oh, and by nicely, I mean, I am coming like the Clash of the Titans, because I am about to release the Kraken, after the jump.

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outsourcing biglaw aba tsunami.gifEd. note: Gabe Acevedo, who covered LegalTech for Above the Law earlier this month, will be writing for these pages about legal technology.

Recently, Steven C. Bennett, the chair of Jones Day’s E-Discovery Committee, published an article [PDF] in the Northern Kentucky Law Review entitled “The Ethics of Legal Outsourcing.” In his article, Bennett relied heavily on a six page ethics opinion [PDF] issued by the ABA in August of 2008. When the ABA Formal Opinion 08-451 was released, many legal process outsourcing companies (LPOs) — the companies that hire overseas attorneys to do the work of American attorneys at a fraction of the cost — lauded it as an “endorsement” of their work. As Bennett noted in his article, the opinion even referred to outsourcing as something that was “salutary,” in that it would reduce costs for clients.

Those LPOs had a right to be celebratory about ABA 08-451. After all, never in the history of the United States was there ever an ethics opinion of any Bar Association that had done more to undermine the standing of both American attorneys and our practice of law.

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outsourcing biglaw aba tsunami.gifI’ve been trying to be optimistic about the future of Biglaw in 2010. There’s no harm in hoping for the best.
But I’m positive that 2010 will see more outsourcing of American and British legal jobs to India. And from the perspective of junior Biglaw associates or current law students, that trend does not lead them to a good place.
The Times of London (gavel bang: Am Law Daily) has an excellent expose on Pangea3, an Indian company doing work that used to be done by junior attorneys in the U.K. Once again, we see that law firm managers — and their clients — have compelling cost reasons to ship legal work overseas:

Much of the work that Pangea3 and similar firms deal with, such as drafting derivatives contracts or conducting due diligence for mergers and acquisitions, was once the preserve of trainees and associates at big City law firms. Some of those firms racked up annual revenues of more than £1 billion during the boom years, in part by billing out teams of junior lawyers for up to £300 an hour for even the most routine tasks. …
Whereas a new recruit at a “magic circle” firm in London can expect a starting salary of about £60,000 — rising to more than £90,000 at the best paid firms — Pangea3 can pay a good Indian law graduate as little as £350,000 rupees (£4,700) a year.

Those are powerful numbers. And apparently it’s not even all that hard to start one of these companies.
Details after the jump.

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outsourcing biglaw aba tsunami.gifIt 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.

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outsourcing biglaw aba tsunami.gifIt wasn’t that long ago — just back in August 2008 — that the ABA changed its rules to allow the outsourcing of American legal work. In the midst of the recession, a lot of people are still trying to figure out if outsourcing will cause a more fundamental change to the nature of the Biglaw business model than anything we’ve seen during the credit crunch.
Now, the ABA is asking its lawyers to share their opinion on outsourcing. This week’s ABA Intellectual Property Law section e-letter contains a link to a very interesting survey. Here’s the description from the e-letter:

Outsourcing Task Force Seeks Survey Input From You
The American Bar Association’s Outsourcing Task Force is conducting a survey on outsourcing. The objective of the Task Force, at the Request of ABA President-Elect Steve Zack, is a Report with Recommendations to the House of Delegates on the subject at next year’s Annual Meeting.
An important means of collecting input from a broader cross section of the
ABA is an online survey which can be accessed at: http://www.zoomerang.com/Survey/?p=WEB229LAVJNGRM.
As input from the broadest possible range of American lawyers is critical, the Task Force would greatly appreciate if every member could take a moment to complete this survey.
Immediate Past Section Chair Gordon Arnold is a member of the Task Force and serves as its Liaison to the Section of Intellectual Property Law. He strongly encourages all to complete this survey.

IP lawyers, here is one chance to voice your opinion.
After the jump, some we post a couple of the questions the task force is asking.

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