Issuu on Google+

1. 800. 973.1177

MARKET WATCH

Law Firms Outsource Jobs Offshore [by Anayat Durrani] These days, jobs and the economy are on the minds of most voters as Election Day has come and gone. A political hot topic that surfaced during the debates is the controversial issue of outsourcing jobs overseas, a route pioneered by the IT industry. But as Election Day has passed, the spotlight is expected to fade on the issue, as a number of corporate law departments and law firms, prompted by a weakened economy, increasingly look to outsourcing work offshore to manage costs and increase profitability.

Hollywood, CA, is not considering outsourc-

Now that the election is over, law firm off-

India, the location of Intellevate’s support

shoring will continue to accelerate, accord-

center. The fact that “India works while we

ing patent work overseas. Marc Hankin, the

ing to Leon Steinberg, CEO of Intellevate,

sleep” results in work being done 24 hours a

company’s founder, believes doing so could

a Minneapolis-based outsourcing company

day and yields a faster turn around time, he

prove problematic, and not merely because

that provides legal support services, such

said. Mr. Steinberg also said the cost savings

of language barriers or time zone differ-

as paralegal, docketing, technical research,

and the reduction in risk were other advan-

ences. “First, there is the security issue.

and/or bookkeeping functions to its clients.

tages. “Because wages are lower, through

Technology may not be exported to other

“Law firms are political animals, and many

India more time and care can be taken.”

countries without express permission of the

of them are unwilling to put a stake in the ground until the elections are over.”

U.S. government. Even were that available, India has become the center of outsourced

there is the issue of our client getting ripped

work, especially in such cities as New Delhi,

off and having little chance to discover it, and

In recent years, outsourcing has become big

Bangalore, Mumbai, and Hyderabad. Mr.

less of a chance to do anything about it.”

business for legal outsourcing groups like

Steinberg, whose legal-services support cen-

Intellevate LLC, Mindcrest, and Office Tiger.

ter is located in New Delhi, said his company

Mr. Hankin also stressed the issue of quality,

Industry participants estimate the potential

chose India because of its high population of

saying that the majority of the work they do

for orders from U.S.- and U.K.-based law

advanced degree holders who receive their

for their clients requires thorough working

firms could range between $2 billion and $4

education in the English language. Steinberg

knowledge of American law and the nuanced

billion a year, according to a report by Dow

also noted that the prevailing wage in India

cases of the United States Court of Appeals

Jones. The bulk of the work being outsourced

is 25% of the prevailing wage in the U.S. For

for the Federal Circuit. “There are other,

is “back-office” work such as legal research

example, a patent lawyer with little US pros-

subtle, legal parameters as well. I find it

services, word processing, copying, legal

ecution experience may make over $80,000 in

hard to believe that someone outside the

transcription, accounting, and other admin-

the U.S. and less than $20,000 in India,” said

U.S. would understand these enough to do

istrative support. Based on industry data, top

Mr. Steinberg. Another advantage of India, he

a good job avoiding the pitfalls…I doubt that

200 U.S. law firms spend nearly $20 billion

said, is that its legal system is based on the

I would entrust my clients’ work to anyone

annually on operating costs, with office

British model, as is the United States. This

overseas.”

operations and documentation management

has led many corporate law departments and

making up 46% of total expenses, the report

law firms to rely on lawyers in countries like

Trojan Law Offices, a patent and trademark

said.

India, New Zealand, and other similar Brit-

litigation law firm based in Beverly Hills,

ish-modeled countries to cut costs.

does not currently outsource work overseas but is considering it as long as it is properly

Mr. Steinberg said Intellevate has doubled in

supervised by U.S. counsel.

size in the last year and expects to double in

Despite its seemingly growing trend, law

size again in another 6 months. Intellevate is

firms who do outsource are not always will-

majority owned by shareholder attorneys at

ing to disclose it, and the companies helping

In the meantime, outsourcing remains a

Schwegman Lundberg Woessner & Kluth, a

them outsource are also mum on the subject.

lucrative business for companies like Office

nearly 60-lawyer patent firm in Minneapolis,

Then there are others who oppose outsourc-

Tiger and Hildebrandt, who began a joint ven-

a firm that also is a customer of Intellevate’s

ing and feel it may not be the best option for

ture in June to provide “back-office” support

services, according to Minnesota’s Pioneer

some law firms.

services to leading U.S. and U.K. law firms.

Press. Mr. Steinberg cited several advantages to outsourcing legal work to countries like

PAGE 1

One of these firms includes U.K.-based Allen Hankin Patent Law, a firm based in West

& Overy, which has some 3,300 partners and

continued on back


MARKET WATCH

staff and operates in 20 countries. “When we began this venture, our expectations were high and we are still surprised by the interest in firms’ leaders and the desire to learn more about outsourcing and figure out how to apply it to their practice,” said Michael Short, Director of Hildebrandt International, a law firm consulting group. OfficeTiger has operations centers in Chennai, India, with more than 2,000 trained professionals including MBAs, PhDs, and chartered accountants. Some of the services Office Tiger-Hilderbrandt provides for its clients include document processing, business and legal research, risk management, professional support, HR, finance and accounting services. “The kind of work varies by size of firm, culture of firm and general reception of the firm’s management towards the concept of outsourcing,” said Mr. Short. While the concept of outsourcing begins to gain more buzz among law firms, Mr. Short believes outsourcing will in time become more mainstream. “In the near future when the Baby Boomers retire, the demographics of the U.S. workforce will create a huge change in supply and demand. It is a good idea for law firm leaders to start thinking about outsourcing now rather than later so that they can ease into the outsourcing transition.”

PAGE 2

1.800. 973. 1177


Law Firms Outsource Jobs Offshore