Outsource Legal Work? Are You Crazy?

Bruce MacEwen’s post entitled “London and New York, Meet Mumbai and Delhi” on Adam Smith, Esq. may provide some of the best reasoning yet to consider outsourcing “legal” work.

Bruce reports on a recent panel that he attended at the ABA Annual Convention anchored by:

  • Sally King, regional operations manager for the Americas at Clifford Chance
  • Jim Lantonio, who was executive director at Milbank when they outsourced their word processing functions to Mumbai, and
  • Ron Friedmann, a senior executive with Integreon, a major outsourcing firm.

Most telling was Jim Lantonio’s struggle to staff the word processing ranks at Milbank:

The Milbank wordprocessing staff–drawn from the New York job market–consisted, certainly on the overnight shift, of actors and actresses whose key career priority was not, to put it delicately, Milbank at midnight.

What was the key obstacle to the offshoring at Milbank? “Not technology, and not confidentiality or security–those we could readily take care of; it was the politics of sending jobs abroad.” But, reported Jim, what changed the nature of the conversation about “sending jobs abroad” was the recognition that capable people in the New York metropolitan area did not want 24/7 wordprocessing jobs. The critical battle of convincing lawyers, used to looking over secretaries’ shoulders as they typed, that the work could be done as well in Mumbai, remained.

So Milbank embarked on a year-long double-blind experiment. When a lawyer submitted a job to wordprocessing, it would go either to Mumbai or to New York, at random. Lawyers were then asked to grade the resulting work product, without knowing where it came from. At the end of a year, satisfaction rates were 97-99% for Mumbai-sourced work and 75-78% for New York-sourced work. Case closed.

Word processing may not be considered true “legal” work by many who practice law, but consider these recent stories:

Back at the ABA panel, Bruce MacEwen asked the panel “whether the ability to offshore basic document review was changing the career paths of junior associates, who presumably did that work heretofore.”

“Oh, yes, it has already changed things greatly,” reported Sally King (Clifford Chance). Jim Lantonio agreed that had been his experience at Milbank. “The days of seeing a bunch of associates in a war room with boxes of documents to review are long gone.”

screamThe ABA Standing Committee on Ethics and Professional Responsibility recently released an ethics opinion stating that:

U.S. lawyers are free to outsource legal work, including to lawyers or nonlawyers outside the country, if they adhere to ethics rules requiring competence, supervision, protection of confidential information, reasonable fees and not assisting unauthorized practice of law.

[See also “ABA Gives Thumbs Up to Legal Outsourcing” on Law.com.]

As much as lawyers violently oppose the outsourcing of legal work, Bruce MacEwen points out that lawyers are already “outsourcing” all kinds of activities like “copying, catering, mailing, website hosting, [and] tax preparation.” You and you law firm COULD do all of these activities yourself, but unless have access to vast resources (e.g. time, money, and wiling people), you’re going to outsource.

I spoke with a lawyer recently who pointed out that legal research today is even “outsourced” – who manages a substantial law library anymore? We rely on (and handsomely pay) Lexis and West to provide us with all of the research resources we need.

I guess in a broader sense, any attorney who does legal work for a corporate client is doing outsourced work. The company could certainly hire competent lawyers to handle their litigation matters, but they routinely choose to outsource that type of work to law firms that boast a speciality in litigation … and advantageous results. Perhaps that’s one reason why general counsel are more comfortable with the idea of outsourcing some aspects of litigation like processing and review.

The two words outsourcing and offshoring are often confused and regularly used interchangeably. That should not be the case. Offshoring is one aspect of outsourcing. But if you were going to outsource your document review to contract attorneys down the road, what’s the difference today in offshoring the work across the world? With technology today, it really doesn’t matter if your reviewers are down the hall or across the ocean – you can still check their work, conference over the phone, and keep detailed reports on their daily/hourly progress.

To add another perspective, Bruce MacEwen has another post where he interviews Ray Bayley of Novus Law LLC, an outsourcing company that helps corporate legal departments “reduce costs and better control legal operating budgets.”

Bayley makes a sobering point:

“Compare the healthcare industry, where about 4% of all workers are doctors: In the legal industry, more than half of all workers are lawyers. ‘How much of the work done in the US legal industry is legal work but not lawyer work?,’ Ray asks rhetorically. The best estimates, he reports, are on the order of 70-80% according to the two years of market research that he did, and he goes on to describe a study done at the Institute of International Economics in which two economists concluded that 77% of the US legal industry is susceptible to globalization.”

Perhaps we now need to make better distinctions between “legal work” and “lawyer work.” The “legal work” like word processing at Milbank is easily outsourced, and even offshored. But the “lawyer work” like granular strategy, in-depth legal analysis, and professional, hands-on advocacy still remains the hallowed vocation of the bar at large.

Link to “London and New York, Meet Mumbai and Delhi” on Adam Smith, Esq.