Law Firms: Advantages of Outsourcing Offshore

The offshore outsourcing of document processing for large-scale litigation, as well as M & A, bankruptcy and other work represents a way for law firms to strengthen relationships and garner additional work from their corporate clients.

Law firms are being pressured to reduce billing rates and show ongoing productivity improvements. These and related market forces have the potential to depress profitability and threaten the traditional law firm.

In response, law firms have started exploring the feasibility of using offshore professionals for low-complexity tasks, such as litigation-related document processing, to reduce costs.

The offshore business model has been notably successful in other professional services industries, but is yet to be widely accepted in the legal industry. Detractors cite concerns including client-attorney privilege, perceived differences between the U.S. legal system and foreign systems, and whether such a model will constitute unauthorized practice of law in the U.S. These concerns are easily addressable. The bigger issue is resistance to change.

India has emerged as a leader in the offshore legal services arena. The key to India's success in this regard is its ability to deliver on all three value fronts: quality, speed and cost.

Quality

The available Indian labor pool is both well-educated and steeped in quality fundamentals. With over 221 universities graduating over 3.3 million students annually, the Indian educational system today is a global leader in such professional disciplines as science, management and engineering.

Speed

For tasks that involve collaboration with U.S.-based teams, the time zone differential is key. India is 9 to 12 hours ahead of the U.S. and this translates into a potential doubling of work output per day, as the onshore and offshore teams work sequentially on a shift basis to complete projects.

Cost

The direct cost of labor in India is a fraction of that in the U.S., translating into total cost savings on the order of 50% relative to an equivalent American offering. Moreover, that total cost is decreasing over time, as logistics, communication, and training inputs become less expensive.

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Offshore Legal Services: The Drive For Productivity