Shock, Horror, Stop the Presses – Western Legal Work Being Done in India!

A DAY IN THE LAW

I read the news today oh, boy
About a law firm gone to India.

And though the news was rather blah,
Well, I just had to laugh;
I knew the world was flat.

People blew their minds out with the shock;
They didn't notice that the times had changed.
A crowd of others stood and sighed;
They'd seen this thing before;
Nobody was really sure why everybody wasn’t bored.

 

(apologies to Lennon and McCartney)

 

It’s amusing to watch all the hullabaloo about mega-law-firm Eversheds announcing that at some point, it will outsource some of its “small commercial contracts” work to India.  It shows how even after several major media and trade articles on the subject of legal off-shoring, much of the law world remains remarkably unaware of what's going on. 

 

It reminds me of a moment in October, 2006, when The New York Times reported, as if it were shocking, that mega-law-firm Clifford Chance was sending secretarial and bookkeeping work to a center near Delhi.   I had to laugh.  By 2006, nearly every major company in the world had been using routine business process outsourcing (BPO) in India for years.  More funny was the fact that the article (“Law Firms Start to Adopt Outsourcing,” October 27, 2006) made no mention of the outsourcing of legal services.  This was despite the fact that other law firms and companies already had been sending not only secretarial work, but legal work, to India for so long that an Indian legal outsourcing industry had emerged.  By the date of the article, Pangea3 had been growing for two years, and Atlas Legal Research had been around for about five, not to mention 20 or more other legal outsourcing companies in India at the time.

 

Since then, Clifford Chance reportedly has created a team of seven Indian paralegals and six Indian law graduates to add to the ranks of its India personnel at Integreon.  A couple of thousand or more Indian attorneys (7500 if you believe the research analysts) are performing Western "legal process outsourcing " (LPO) and other legal services at a host of other vendors.  Exactly a year ago, the giant U.S. law firms Jones Day and Kirkland & Ellis went public with the fact that they were handling the outsourcing of legal work to India at the insistence of their clients.

 

And now, some in the legal media world, especially its blogosphere, are all aflutter, because of a report that Eversheds “has signed a contract with a third-party [Indian] provider to outsource small commercial contracts that are too expensive to carry out in the U.K. or in-house.”  Well, please excuse me if I’m underwhelmed.

 

But putting unwarranted feelings of "industry insider" superiority aside, I’m happy to see this happen, and I wholeheartedly agree with much of what Eversheds is saying to the press.  For example, its commercial group head, Jonathan Guest, is quoted as saying: “Clients like the concept [of outsourcing work] but want someone to establish the process and provide verification.  From our perspective we are bringing a solution to a perceived client need - we will hopefully be introduced to new clients through this and it will lead the way for the firm to act for them on larger scale work.”

 

We’ve seen this happen over and over again at SDD Global Solutions, where corporate and law firm clients alike, who otherwise never would have plunged into legal outsourcing, are doing so because our managing U.S. law firm, SmithDehn LLP, is supervising the operation.  What’s more, this is leading to further work, for both the law firm and the outsourcing company. 

After one of the major Hollywood studios entrusted both firms with legal research and drafting on a film project last year, the studio's parent company recently came to SmithDehn with a request to increase the scope of the work. In-house counsel wanted help with a series of multi-million-dollar deals involving the online licensing of a vast portfolio of film and television content to all of the major internet providers.  When we performed our ethical obligation by telling him that we envisioned some of the work being handled by outstanding, U.S. law-trained Indian attorneys, he said the following: "Not only do we approve the involvement of SDD Global, we're insisting on it!"  He said it was precisely because the project was so "important" that the company wanted to involve our India legal outsourcing affiliate. The company wanted "no stone unturned" on this assignment, and it knew from experience that “big firm” outside attorneys would charge exorbitant fees and would not deliver a superior result.  (An interesting rebuttal to those who say legal outsourcing is okay for relatively inconsequential projects, but never for "bet-the-company" or other major matters.)

The above was one of several situations where our law firm has gotten business that it would not otherwise have received, thanks to legal outsourcing to India. In fact, we’ve seen legal work that would not even exist at all, for any law firm, if not for legal services off-shoring. 

For example, SDD Global in India is handling nearly all of the litigation work for the defense in a high-profile media libel case in California, with supervision by SmithDehn and local counsel.  Without legal outsourcing to India, battling this lawsuit would not have made economic sense.  As so often happens, the defendants would have simply paid the plaintiff to go away. This would have been just to avoid usual U.S. legal fees, even though the case has no merit.  But with an Indian team doing most of the work, it is less expensive for our client to fight the suit, than to settle it. 

The implications of this case may be significant. If and when it is dismissed on summary judgment, the lesson heard far and wide will be that frivolous lawsuits can be defeated on the merits, instead of settled simply out of fear of legal fees. And as a result, more work will be created for U.S. lawyers, not less.

As the Eversheds partner reportedly said, regarding the contract work it plans to send to India: “the outsourcing scheme will actually ­create work that would otherwise not be done…. It’s not taking work away from anyone…. It’s actually creating work out of contracts that would ­otherwise sit in a metaphorical drawer.”

 

So much for the tired myth that legal off-shoring is necessarily bad for Western lawyers.  For Western law firms that appreciate its benefits, outsourcing to India can be a ticket to survival and growth.