For certain the legal profession, long despised for its sky high fees, is one profession that few Americans would be sorry to see outsourced to India resulting in large scale job losses – at least for lawyers that is. Hence, will the emergence of Legal Process Outsourcing (LPO) finally cut the legal profession and its fees down to size? Maybe. Or maybe not.
Fortunately or unfortunately depending on how much you love lawyers, the legal profession is one profession that seems to be largely protected from the full blown effects of outsourcing. After all, a lawyer in one country generally cannot practice law in another country as the legal profession is governed by intricate licensure and ethical rules that are set by jurisdiction. Hence, Forrester Research is quoted in the Wall Street Journal as estimating that only 35,000 USA based legal jobs will be moved offshore by 2010 and 79,000 by 2015 – only a tiny fraction of the estimated 1.2 million lawyers in the country.
Moreover, don’t expect any US$500 an hour lawyer to have his or her job outsourced to India any time soon as the brunt of any job shift will be felt by paralegals and junior lawyers as LPO type of work typically includes basic legal research, documentation writing and review and the drafting of legal briefs and pleadings. In other words, routine legal and corporate secretarial type of work that no US$500 an hour lawyer would do themselves.
However, the potential cost savings from LPO are enormous with a recent USA Today article stating that some LPO companies will charge only US$25 an hour for work that would otherwise cost more than US$125 an hour if it were done in the USA. Moreover, starting salaries for new associates at big law firms in the USA can be more than US$200 an hour or US$160,000 per year at large and prestigious law national firms while the national average annual salary for lawyers according to a 2007 Altman Weil survey is US$318 per hour and US$550 per hour at large New York City law firms. However, an experienced lawyer in India can be bill at US$75 to US$100 per hour, roughly what some experienced USA based paralegals charge; while a indian lawyer with five years of experience can be hired for just US$30,000 a year including benefits, half of what an experienced USA based corporate paralegal would earn. And not to mention there is the cost of office space in New York verses Mumbai or Manila.
Nevertheless, don’t expect much in the way of cost saving to trickle out of large law firms or the legal departments of large multinationals. However, LPO does have the potential to significantly level the playing field for smaller law firms, smaller companies and individuals who can now have an amount of legal work done that could not be affordably attained in the USA. In other words, LPO has the potential to free up and leverage resources that will allow lawyers and Americans in general to do what they have almost always done best: sue each other.
http://outsourceportfolio.com/legal-process-outsourcing-lpo-giving-lawyers-case-medicine/
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