« on: December 20, 2006, 10:00:29 AM »
Ack, there goes our security!
Legal firms overseas getting increased business from U.S.
Luladey B. Tadesse
(Wilmington, Del.) News Journal
Dec. 20, 2006 12:00 AM
If the jobs at General Motors or DaimlerChrysler's plant in Delaware suddenly moved to China, people wouldn't be shocked.
Manufacturing jobs have been moving offshore for years.
But what if major corporations decided it was cheaper to work with lawyers in India?
The practice already has begun, and Wilmington, Del.-based DuPont Co. is recognized as a pioneer in the growing trend. Other corporations like Oracle, Cisco and General Electric also are trimming their legal costs as well.
The legal offshoring industry is estimated to be about $60 million to $80 million today - tiny in comparison with the estimated $225 billion U.S. legal industry - but it has the potential to grow.
The cost of working with lawyers in India averages $50 to $70 an hour, compared with an American lawyer with equivalent experience who would be paid $200 or more. An Indian lawyer working as a temp would cost $20 or less, whereas one in this country would cost up to $70 an hour.
As more work shifts to legal companies abroad, the number of jobs lost in the United States is expected to jump from about 23,000 this year to about 79,000 in 2015, according to a 2004 report by Forrester Research.
Josh Bivens, an economist at the Economic Policy Institute in Washington, doubts lawyers will be affected much by offshoring.
"In my lifetime, corporate sector lawyers will be very well paid," he said. "In part, it is because they have very select skills. And, in part, because of a lot of regulations that make it difficult for outsiders to compete in that field."
For many years, lawyers were shielded from the offshoring phenomenon, mainly because their work was steeped in arcane U.S. law.
But that reluctance is fading.
DuPont has a crew of about 100 lawyers, mostly in India, who are available around the clock to review documents in such complex matters as asbestos lawsuits. The company expects to save 30 percent to 60 percent on the traditional costs, amounting to more than $6 million a year from its $200 million annual legal bill.
New federal rules require companies to produce nearly all electronic data as evidence, including deleted e-mails. As a result, the amount of document review required by lawyers is expected to grow exponentially in the next few years.