In an article three days ago ("Connecticut May Spoil Party for LPOs in India"), The Times of India reprinted a recent story from The Economic Times, reporting as follows:
[A legislator in the] US State of Connecticut has introduced a bill designed to prevent law firms and corporates from offshoring the drafting, reviewing and analysing of legal documents to workers overseas. This could impact the legal process outsourcing (LPO) sector in India. LPO players are also worried that other US states may pick up the cue from Connecticut.
Actually, if any LPO players are worried, there is no cause for it. The chances of this misguided piece of proposed legislation passing, or being upheld by the courts if it somehow were to pass, are about zero.
The proposed law (HB 5083), introduced by State Representative Patricia Dillon, would amend Connecticut Gen. Stat. §51-88 “to provide that the practice of law includes (1) drafting, reviewing or analyzing legal documents for clients in this state, and (2) researching and analyzing the law of this state and advising clients in this state of the status of such law, and that any person who has not been admitted as an attorney in this state who performs such activities commits the offense of the unauthorized practice of law.”
There are at least four reasons why the flaws in this bill are fatal -- to its chances of becoming law, not to offshore legal outsourcing:
First, because many thousands of paralegals (not admitted to the bar, by definition) and beginner associates (many not yet admitted to the bar) are drafting and/or reviewing legal documents and/or performing legal research, the proposed legislation would ban more jobs in the U.S. than it would in India.
Second, the offshoring or nearshoring or in-sourcing of this kind of work to paralegals and other professionals not admitted to bar in the U.S., whether those professionals are in the U.S. or India, is not only of benefit to clients (who end up paying less in fees), but it also helps lawyers (by lowering their own costs, increasing their flexibility, and giving them a fighting chance to win and keep clients). That's why every bar association ethics panel that has spoken on this issue (more than half a dozen across the country so far, including that of the ABA) has come down in favor of this same kind of legal outsourcing that would be banned by this bill proposed by a non-lawyer. In short, there is no serious constituency for this proposed law.
Third, although the bill's sponsor says she is concerned about the "quality" of the work being done overseas, she fails to understand that supervision and quality control regarding offshore legal process outsourcing is one of the well-recognized duties of lawyers themselves, in Connecticut and elsewhere. So the bill serves no worthwhile purpose, and it would actually take away one of the more useful roles that lawyers are providing now.
Lastly, by attempting to take aim against offshore legal outsourcing, Rep. Dillon fails to recognize that outsourcing actually can create more legal jobs, not fewer. As we pointed out in a previous blog post ("12 Ways Offshore Legal Outsourcing Could Shake Up the Law World in the New Decade"):
The mostly untapped market for affordable legal services (a phrase now widely seen as an oxymoron) is vast.... [W]hen offshore legal outsourcing allows otherwise unaffordable court cases to be opposed or prosecuted, and deals to be done, most of which require Western lawyers to supervise and implement, the amount of work for Western lawyers will go up, not down.
Regarding the bitter and continuing complaint that legal jobs are lost in the U.S. because they are outsourced, [Case Western Reserve University] law professor Cassandra Burke Robertson concludes otherwise, in her law review article ["A Collaborative Model of Offshore Legal Outsourcing"]. She cites facts to support her point that offshore legal outsourcing "creates more jobs than it eliminates... [and] the cost savings achieved from offshoring lower-level work may create more high-end jobs onshore."
Even the offshoring of high-value work creates job opportunities in the West. Deals previously undone, and litigations previously settled (or never filed), due to previously excessive legal costs, become suddenly affordable. Affordability means more work for the Western lawyers involved in supervision, editing, negotiating, and/or appearing in court.
We are not alone in our critique of this bill. In a recent article in the Connecticut Law Tribune, several legal experts were quoted in opposition to the proposed legislation:
Legal experts doubt whether the Connecticut legislature can do anything to stem the tide. “The whole business of lawyering is going to change, and is changing right before our eyes,” said Frederic Ury, of Ury & Moskow in Fairfield, who serves on the American Bar Association’s Commission on Ethics 20/20.
“You can’t look at the profession and try to go backwards… We’re just like every other industry that’s in the midst of a paradigm change,” said Ury. “Legal services overseas are really in demand.”
Ury noted that the ABA gave the practice of outsourcing legal work its blessing in 2008.
The ABA said at the time that outsourcing “affords the lawyers the ability to reduce their costs and often the cost to the client to the extent that the individuals or entities providing outsourced services can do so at lower rates than the lawyers’ own staff.” The ABA also said outsourcing created new opportunities for smaller firms to handle larger matters.
Connecticut's legal trade newspaper concluded in the article that "the general consensus is that overseas legal work is here to stay":
“We as an industry have shown that a lot of basic legal support work can successfully be done offshore very cost-effectively with no quality problems,” Mark Ford, of the global law firm Clifford Chance, recently told the New York Times. “Why on earth would clients accept things going back?”
And the criticism of the bill is not limited to LPOs, big law firms, or the legal establishment. Lisa Solomon, a well-respected, freelance attorney and commentator said the following in an excellent blog post on this subject:
This sloppily-drafted bill... ignores the substantial body of principled analysis of the issues surrounding legal outsourcing in favor of facile protectionism that won’t cure the legal profession’s real ills.
As for the status of the bill? Rep. Dillon says the Connecticut General Assembly’s Judiciary Committee will take a look at her proposal, and that a public hearing is likely to be scheduled.