> Subject: Call My Lawyer ... in India > > Knowledge Process Outsourcing > http://www.time.com/time/magazine/article/0,9171,1727726,00.html > </time/magazine/article/0,9171,1727726,00.html> > Time Magazine > Thursday, Apr. 03, 2008 > Call My Lawyer ... in India > By Suzanne Barlyn > Mark Alexander, a Dallas attorney, says he's ethically obligated to do > what's best for his clients, "and that includes saving them money." So > when one of them asks him to research a securities-fraud topic, for > example, or breach of contract, he doesn't even think about applying > his $395 hourly rate. Instead, he calls Atlas Legal Research, an > outsourcing company based in Irving, Texas, that uses lawyers in India > to provide the service for $60 per hr. "When a client pays me a > $25,000 retainer and I can save them money, I will do so," says > Alexander. Handing off the work to a $225-per-hr. junior associate is > not an option. "They don't even know where to stand in the courtroom," > he says. > While the Americans learn, well-trained lawyers in secure offices in > Mumbai (formerly Bombay), Bangalore and Gurgaon (outside Delhi), who > typically earn $6,000 to $30,000 annually, do legal grunt work. > Alexander's sentiments may explain why outsourcing is blossoming in > the legal profession, which is known--and often despised--for its high > prices. Law-firm partners bill at a national average of $318 per hr. > and at $550 per hr. at large New York City firms, according to a 2007 > survey by Altman Weil, a legal-consulting company. Starting salaries > for attorneys at some large firms now stand at $160,000. So a U.S. > company's simple problem can generate hundreds of thousands of dollars > in fees. > The considerable savings is perhaps one reason Forrester Research, > based in Cambridge, Mass., has projected the offshoring of 29,000 > legal jobs by the end of the year and as many as 79,000 by 2015. It's > part of India's inevitable move up the corporate food chain, from > lower-value business process outsourcing--like call centers--to > knowledge process outsourcing (KPO). The latter category encompasses > higher-skilled jobs, such as engineering and medicine, and relies on > the KPOs to behave more like branch offices of U.S. companies. > ValueNotes, a business-research firm based in Pune, India, says a > subset of KPO called legal process outsourcing (LPO) has grown > revenues 49% from 2006, to $218 million last year. The figure will > nearly triple, to $640 million, by 2010, it says. ValueNotes counts > more than 100 legal-services providers in India, ranging from a > handful of overseas corporate legal offices, such as Oracle's and > General Electric's, to companies that contract to provide low-cost > legal services to U.S. and British businesses. Leaders include > Integreon and LawScribe, both in Los Angeles, and New York--based > Pangea3. > Persuading lawyers to export work wasn't an easy sell, says Ganesh > Natarjan, CEO of seven-year-old Mindcrest, which has its headquarters > in Chicago and employs 440 lawyers in Mumbai and Pune. "Lawyers are a > risk-averse group, so it was a slow process for them to adopt the > idea," says George Heffernan, vice president and general counsel. > Mindcrest's services include document review, research and support for > compliance functions. The last cost large companies an average of $2.9 > million each in 2006, according to Financial Executives International > in Florham Park, N.J. > Educating American lawyers about India's English-speaking attorneys, > who are trained in a common-law system modeled on Britain's, helped > change attitudes, at least among top lawyers for U.S. companies, > Heffernan says. About 75% of Mindcrest's clients are FORTUNE 500 > companies. Mindcrest hired 390 lawyers last year alone, a staff > increase mandated by clients with some large-scale projects, it says. > But outsourcing worries some experts because the ethical rules that > bind U.S. attorneys have no force in India. "Lawyers are being seduced > by the business end of outsourcing and are not being concerned enough > with the ethical issues it's raising. I'm deeply troubled that > outsourcing companies do not understand the scope of a lawyer's duty > to confidentiality, nor are they familiar with conflict-of-interest > rules," says Mary C. Daly, dean of St. John's University School of Law > in New York City. > LPO firms say they are up to the task of security and confidentiality. > At Integreon's facilities in Mumbai and Gurgaon, for example, guards > search attorneys' belongings to ensure they're not carrying flash > drives or laptops, according to CEO Liam Brown. Computers don't have > disc drives, usable usb ports or CD burners, and most can't print. > Attorneys work for a specific client in areas called dedicated > delivery centers, which are accessible via a fingerprint scan and > monitored by cameras. Each room can hold up to 36 terminals--many of > them with dual screens. The company never stores data locally. Rather, > the lawyers work directly on the client's server and only over a > secure line or via the Internet. The space becomes a "virtual > extension of the company we're working for," says Abhishek Khare, head > of the Gurgaon office. > Changes in litigation procedures are boosting momentum in the LPO > trade. Amendments to federal rules require parties to share electronic > documents, such as e-mail and Microsoft Office files. That typically > means both sides must review thousands of documents to prevent the > inadvertent disclosure of confidential information to the other party. > The service costs about $1 per page in India but can range from $7 to > $10 per page in the U.S. "Some clients don't want to spend that much, > especially if they don't even know how much their damages could be," > says Conrad Jacoby, owner of efficientEDD, a legal-technology > consultancy in Dunn Loring, Va. > TransUnion, in Chicago, has successfully outsourced legal work for > four years, according to general counsel John W. Blenke. "Every law > firm is really an outsourcer. One lawyer usually can't do it all," he > says. Indian attorneys are currently reviewing more than a million > litigation e-mails for the company, which costs less than $10 per hr., > he says. He would pay $60 to $85 per hr. to a U.S.-based > legal-staffing company for the job. Blenke says he's cautious, > however, about the work he outsources. "You can only do it with a few > things. It has to be an area that you know well, so you can build > processes around that," he says. > DuPont saved $500,000 in 2006 by outsourcing paralegal work to > Chicago's RR Donnelley, which uses facilities in India and the > Philippines to review documents for the chemical giant, says Thomas > Sager, DuPont's chief litigation counsel. "There's been some internal > resistance, and from the outside too, about working with providers > thousands of miles away. But geographic separation is now a fact of > life," says Sager. > Some private attorneys remain cautious. Says Gregg Kirchhoefer, a > partner in the Chicago office of Kirkland & Ellis: "We don't do, > haven't done and don't plan on doing this. The name of the game for us > is quality." Daly, the law-school dean, says an ethical breach is only > a matter of time. "We haven't seen any documented problems crop up > yet, but I'm sure they're there," she says. "We've certainly seen > problems on the domestic side. It would be foolish to assume they're > not on the global side as well." It would also be foolish to assume > that the outsourcing trend in law is anything but robust. > With reporting by With Reporting by Simon Robinson/Gurgaon >
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