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Author Topic: ABA reports on oursourcing of legal work to India  (Read 2115 times)

stateofbeasley

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ABA reports on oursourcing of legal work to India
« on: October 04, 2007, 08:19:25 PM »
http://www.abajournal.com/magazine/manhattan_work_at_mumbai_prices/

This bodes ill for the future of legal work that does not require the physical presence of an attorney in the United States.  A lot of transactional work and back end litigation support is extremely easy to export to India.

Quote
It is 10:30 in the morning in Mumbai—1 a.m. in New York City—and Aditi Tulpule settles between the partitions of her computer station, one of many such workspaces along an extended blond-wood desk.

Tulpule, 32, has two law degrees: one from one of India’s top law schools and a graduate law degree from a school in Great Britain. She is licensed to practice law in both countries and has five years of cor­porate law experience behind her.

She’ll spend her day abstracting leases, reviewing documents, drafting contracts, then sending her work ­­product to private law firms and in-house legal departments based in the United States, where the work originated—and where American lawyers will put their names on the documents she creates.

American lawyers believe the work Tulpule does is not cost-effective for them to handle personally. When Tulpule does it, she charges an hour­ly rate about 80-90 percent less than what Americans do. That’s because she’s among the 100 or so lawyers who work in the Mumbai office of Pangea3, one of India’s rising stars in a growing industry called legal process outsourcing, or simply LPO.

The pay differential is frightening.

Quote
Picture two fifth-year lawyers—one working for a law firm based in New York City, the other for a legal outsourcing company in Mumbai, India. Both lawyers are working on projects for Fortune 500 clients, yet under very different circumstances. Here’s an unscientific snapshot of just how different those circumstances might be.
ASSOCIATE PAY

Manhattan: $200,000 per year

India: $7,000-$8,000

(equivalent spending power of $35-$40,000 in U.S.)


Right now outsourcing to India is in its infant stages, but India is churning out lawyers at a fairly brisk pace:

Quote
The first instance of legal work being outsourced to India took place in 1995, says Rahul Jindal, a prominent LPO blogger. It started gaining steam after 2000, and Jindal estimates that there are about 100 legal outsourcing companies that employ between 600 and 800 Indian attorneys.

While that number is still a tiny percentage of India’s legal sector, which is estimated to have 80,000 new law graduates every year, it can only increase based on estimates of how big outsourcing is expected to become.

For people who want to practice law in small firm/solo settings, I think the impact will be minimal.  Matters like criminal defense, family law, and estate planning (anything that needs face to face contact) are safe territory. 

Corporate stuff (contracts, tax, compliance, big litigation support) are IMO doomed industries in the US.  This is especially ominous for document reviewers -- the legal equivalent of the American Autoworker.  Right now the wages are good, but the labor is all to easily moved.

nealric

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Re: ABA reports on oursourcing of legal work to India
« Reply #1 on: October 04, 2007, 09:29:06 PM »
If the command of the English language of Indian lawyers is anything akin to that of Indian tech support, our jobs our safe  ::)

I would imagine most legal work is very hard to outsource- with a few exceptions like doc review and maybe some IP stuff.
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bruinbro

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Re: ABA reports on oursourcing of legal work to India
« Reply #2 on: October 04, 2007, 10:03:35 PM »
Great article. Thanks for posting.
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Hannibal

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Re: ABA reports on oursourcing of legal work to India
« Reply #3 on: October 04, 2007, 10:46:00 PM »
If the command of the English language of Indian lawyers is anything akin to that of Indian tech support, our jobs our safe  ::)

I would imagine most legal work is very hard to outsource- with a few exceptions like doc review and maybe some IP stuff.

This is absolutely false.
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mgoblue85

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Re: ABA reports on oursourcing of legal work to India
« Reply #4 on: October 04, 2007, 11:00:51 PM »
Globalization does not escape the law.  Great article.

The future of corporate law seems to favor the small group of enterprising top graduates who can oversee outsourcing and find future clients.  As in all other industries in the US, the rich are getting richer.

Back end litigation work can probably be outsourced but there are limits.  There has to be someone who does the litigating.

High end transactional work (M&A, Securities, Transactions) will still stay in the states because they require the best minds. 

I think this will spread down to small firms because outsourcing is shrinking the middle class.  Anyone below upper middle class will not be able to afford legal services, and will seek other venues (pro se) for their basic legal problems.  Contrast that with previous generations, where you had company sponsorship and a strong middle class.  This dynamic will affect the medical community too, as fewer people will pay doctors for minor afflictions they can remedy themselves.  For example, Lasik surgeons will beat out the family eye doctor.  Whereas before most eye doctors made the same amount of money, now you have a split.   

We are fast becoming a society of haves and have nots.  The middle class is dying. 

wellpreserved

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Re: ABA reports on oursourcing of legal work to India
« Reply #5 on: October 04, 2007, 11:31:48 PM »
Globalization does not escape the law.  Great article.

The future of corporate law seems to favor the small group of enterprising top graduates who can oversee outsourcing and find future clients.  As in all other industries in the US, the rich are getting richer.

Back end litigation work can probably be outsourced but there are limits.  There has to be someone who does the litigating.

High end transactional work will still stay in the states because they require the best minds. 

I think this will spread down to small firms because outsourcing is shrinking the middle class.  Anyone below upper middle class will not be able to afford legal services, and will seek other venues (pro se) some of their basic legal problems.  Contrast that with previous generations, where you had company sponsorship and a strong middle class.  This dynamic will affect the medical community too, as fewer people will pay doctors for minor afflictions they can remedy themselves. 

We are fast becoming a society of haves and have nots.  The middle class is dying. 

ditto.

i'm amazed so few people are planning for their futures without an understanding of this middle class death dynamic.

me, i plan to brilliant and/or attached to a rich old man in ten years so i'm cool. but some of the rest of y'all should worry.  ;D
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nealric

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Re: ABA reports on oursourcing of legal work to India
« Reply #6 on: October 04, 2007, 11:59:16 PM »
Quote

We are fast becoming a society of haves and have nots.  The middle class is dying. 

Very much agreed- but there is a lot more to it than outsourcing.

I guess my point above was not that you can't outsource legal work, but that its really inappropriate in a lot of cases. (Like Indian tech support). Its not that the Indians aren't smart or capable, I think there is a disconnect on many levels that is hard to overcome while maintaining quality. 
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mgoblue85

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Re: ABA reports on oursourcing of legal work to India
« Reply #7 on: October 05, 2007, 03:26:08 PM »
Quote

We are fast becoming a society of haves and have nots.  The middle class is dying. 

Very much agreed- but there is a lot more to it than outsourcing.

I guess my point above was not that you can't outsource legal work, but that its really inappropriate in a lot of cases. (Like Indian tech support). Its not that the Indians aren't smart or capable, I think there is a disconnect on many levels that is hard to overcome while maintaining quality. 

I see what you're saying here, but keep in mind firms will not outsource unless the quality of work is at least comparable.  Chinese and Indian society place high value on engineering and medical services, which is why the outsourcing going on there is highly advanced.  With respect to law, my Indian friends tell me law is not viewed as a prestigious profession in India like medicine or engineering (not even close).  There is also the problem of passing the bar and going to law school in the US in order to sit for the bar.  So there are a lot more hurdles for law than for other professions, where outsourcing is really affecting everyone's lives (radiology, engineering, computer science).  So law is actually pretty shielded from outsourcing compared to other professions. 

Lindbergh

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Re: ABA reports on oursourcing of legal work to India
« Reply #8 on: October 05, 2007, 04:11:53 PM »


I think this will spread down to small firms because outsourcing is shrinking the middle class.  Anyone below upper middle class will not be able to afford legal services, and will seek other venues (pro se) for their basic legal problems.  Contrast that with previous generations, where you had company sponsorship and a strong middle class.  This dynamic will affect the medical community too, as fewer people will pay doctors for minor afflictions they can remedy themselves.  For example, Lasik surgeons will beat out the family eye doctor.  Whereas before most eye doctors made the same amount of money, now you have a split.   

We are fast becoming a society of haves and have nots.  The middle class is dying. 

I know you're taught that by your leftist profs, but it's simply not true.  Median incomes, overall, are higher than they've ever been, and poverty rates are signficantly lower than in most past decades. 

You're also ignoring the many benefits of globalization, which have produced these improvements in our standard of living:  lower prices for consumers, a larger global economic pie, reduced international conflict due to economic interdependence, etc.

I'll also note that any enterprising individual attorney can take advantage of legal outsourcing in India -- find the work here, have an Indian do it for cheap, and then charge an average (or working-class) american a lower price while still making more money while working fewer hours. 

In other words, everyone benefits.  Not exactly rocket science.

(Let's also not forget that no one here really wants to do document review, any more than they want to do dangerous, unpleasant manual labor like making cars.)

mgoblue85

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Re: ABA reports on oursourcing of legal work to India
« Reply #9 on: October 05, 2007, 04:14:58 PM »


I see what you're saying here, but keep in mind firms will not outsource unless the quality of work is at least comparable.  Chinese and Indian society place high value on engineering and medical services, which is why the outsourcing going on there is highly advanced.  With respect to law, my Indian friends tell me law is not viewed as a prestigious profession in India like medicine or engineering (not even close).  There is also the problem of passing the bar and going to law school in the US in order to sit for the bar.  So there are a lot more hurdles for law than for other professions, where outsourcing is really affecting everyone's lives (radiology, engineering, computer science).  So law is actually pretty shielded from outsourcing compared to other professions. 

Why does the person sitting in India need to have a law degree?  Lawyer here reviews the work, signs, done and done.

Paralegal outsourcing, I guess?

That's right, but there's more to what I was saying.

1.  If the legal profession is not regarded as highly in India as in the United States, the effect will be that the best and brightest students will not enter law.  Therefore, the quality of work is limited.  Hence, you can only outsource so much.  Trust me, the type of outsourcing going on in engineering and medicine is keen.  The type of work being done in China and India on those fronts is equivalent, if not superior, to what good engineers do in the US.  The same should not be true of law (also keep in mind we are only talking about India). 

2.  Indian lawyers who are able to do high level transaction work will not necessarily opt for outsourcing work.  There is demand for legal services in India too, and as a growing economy, the opportunities for good lawyers there may in fact be superior to outsourcing work.  Again, the engineering and medical outsourcing (contrary to popular belief), is on the cutting edge.  I don't think we'll see the day where high end transaction work is handled by foreign lawyers.  Front end litigation is essentially a non-option for foreign lawyers.  If they really want to advance their careers, though, they need real access to the US legal market, and that can only happen if you pass the bar here.