There is only one US law firm managing a legal outsourcing company in India. Now that firm, co-founded by yours truly, has taken matters a step even further. The "Star of Mysore" newspaper reports on this today as follows:
SDD GLOBAL SOLUTIONS IS NOW SMITHDEHN INDIA
Mysore-based LPO (Legal Process Outsourcing) SDD Global Solutions Pvt Limited, an affiliate of SmithDehn LLP, which is best known for its representation of prominent film studios, television companies, and entertainment clients around the world, will now be known as SmithDehn INDIA.
Starting from today, SmithDehn LLP has lent its name to the Mysore firm. One of the main reasons SmithDehn LLP has allowed the Mysore company to use its law firm’s name is the high-end nature of the work the Mysore professionals do. The services they perform make SmithDehn INDIA more like a law firm, and less like a typical LPO operation. The new name is expected to be more effective in attracting clients who are more comfortable with legal outsourcing when the offshore company is affiliated with a Western law firm, and in attracting top-notch employment talent from around India.
SmithDehn INDIA's public announcement offers more details:
Plenty of Western law firms now use off-shoring of legal services routinely, whether they like it or not. Many have been pushed into it by cost-conscious clients. But SDD Global's name change reflects how the situation with SmithDehn is different.
"First of all, we don't just tolerate sending work to India; we love it, and we're proud of it!" says one of the firm's co-founders, Russell Smith. A Columbia Law School graduate and counsel to celebrities such as film star Sacha Baron Cohen, and other media players like HBO and Paramount Pictures, Smith explains it this way: "The overnight turnaround, the cost savings we pass on to clients, the increase in our number of clients and assignments, the high quality of the Indian workforce... What's there not to love? We owe our growth and profitability to a strong policy of wowing clients. With the Mysore team, we've had to chuckle, because clients actually use the word, 'wow.' They say it again and again!"
When asked whether his firm loses revenue to India, Smith responds with an emphatic "no." "The situation is the opposite," he says. "The Indian operation increases our law firm's revenues. When western companies find out about our less expensive, faster, and better service, they hire us. Often they send work to our law firm that otherwise would have been done in-house, or not at all. One filmmaker told me that without the low fee we charged for the legal work, his film could not even have been released, much less could it have won the acclaim it received. So while we send a significant portion of our work assignments to India, it's part of a much bigger pie that's created when legal services are affordable. India gets more revenues, but so does our US law firm. That's one reason why outsourcing actually increases, not reduces, the number of Western jobs. In the case of SmithDehn LLP, we've hired more Western attorneys precisely because of the expanded workload coming in from our outsourcing model."
On the subject of lower costs in India, Smith says it's not just about salaries. "Yes, we can be one of the highest-paying employers in Mysore, and still pay much less in salaries than we would in Los Angeles or New York. But the savings come also from much lower office rent. Most prominent Western law firms lose a huge chunk of their revenues to big city landlords, for office space. Why should we pay tens of thousands of dollars per month in New York or Los Angeles or London, to provide a place for people to work for our clients, when the Mysore operation can function just fine at $540 (Rs. 27,000) per month?"
Another reason SmithDehn LLP has gone so far as to allow the Indian company to use its law firm name is the high-end nature of the work the Mysore professionals do. The services they perform make SmithDehn INDIA more like a law firm, and less like a typical LPO (legal process outsourcing) operation. Vidya Devaiah, Managing Director of the company, puts it this way: "We don't offer legal advice or replace Western lawyers, but we do most of the research, analytics, and drafting work that goes into the final product. We're talking about sophisticated, intellectually challenging assignments, not document coding or clerical work. That's why our company has been given screen credit in over 25 films and television series, right next to the credits for the law firms. We're doing work that clients really appreciate. And that's the case not only for entertainment clients, but also for many others, and for law firms other than SmithDehn, who also hire us and rely on us."
Indeed, the SmithDehn INDIA phenomenon appears to be part of a much larger developing trend -- one that could have huge implications for the legal world. For example, in a report last September by the Outsourcing Unit of the London School of Economics, in a section headed, "LPO Providers Will Move Up The Value Chain," two experts concluded that legal outsourcing providers increasingly will take on more sophisticated assignments:
"Like ITO (Information Technology Outsourcing) and BPO (Business Process Outsourcing), the initial driver of LPO (Legal Process Outsourcing) has been lower
costs available through labor arbitrage. Clients initially feel most comfortable sending discrete work with low complexity and low criticality offshore, the so-called 'white chip' work. (In poker, tradition has it that white chips are the least valuable, red chips are of medium value, and blue chips are most valuable.) If LPO follows a path similar to ITO and BPO growth, the LPO market will move up the value chain to include more red chip and even blue chip work."
Given that hundreds of billions of dollars are spent each year for this kind of work, the possibilities for growth of companies like SmithDehn INDIA could be enormous.