Outsourcing legal services overseas

Since the late 1980s, many law firms have outsourced some of their basic administrative work, such as duplicating documents and messengering mail. Over time, outsourcing has increased in popularity, especially with client demands to reduce costs. Today, firms are outsourcing these services, as well as more complex work, to companies in developing countries such as India and the Philippines.

Panelists in the Presidential CLE “Outsourcing Legal Services Abroad,” sponsored by the Law Practice Management Section at the ABA Annual Meeting, examined the issues surrounding this trend.

“Outsourcing is really an extension of what lawyers have long done—delegating work to others,” said Ron Friedmann, senior vice president of marketing for Integreon, a legal process outsource company that has an operation in Mumbai, India. However, Friedmann went on to caution that there are some concerns with the practice, such as the possible leaking of confidential information. To alleviate this issue, Integreon maintains tight security measures, including restricting certain items from the work premises, designating special clearance for employees, installing locked doors and video surveillance cameras, and providing a dedicated delivery center for each client.

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Panelist D. James Lantonio, visiting professor at Stoney Brook University Graduate School of Business, said that some clients have concerns about the quality of work being done, but his experience has been positive. “When I worked at Millbank, Tweed, Hadley & McCoy LLP, we outsourced our word processing and designed an electronic feedback survey to assess satisfaction.” India had a 97-99 percent satisfaction rating whereas the work done in the firm’s New York offices had 70-75 percent satisfaction, he noted.

Lantonio went on to add that this satisfaction rate could be attributed to the fact that fewer individuals are being properly trained for or want lower-level jobs these days. He also said that it’s difficult for big law firms to manage operations where there are no set career paths for staffers in those jobs or the opportunity to grow their skill sets.

More and more, law firms are outsourcing complex functions such as document review. “Documentation review is not the first choice job for U.S. lawyers coming out of law school today, but that is not the case in India,” said Friedmann.

While India has been the main international outsource destination over the past few years, Sally King, regional chief operating officer for Clifford Chance LLP, said that the cost of doing business there is increasing as its local economy grows, which means that it’s not the bargain that it used to be.

So where’s the next great outsourcing destination? The panelists agreed that Manila, Philippines is gaining in popularity, given that English is widely spoken there. China and Sri Lanka are ones to watch, although they are not quite ready for primetime.

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