Ideas from the Front
Moving To Mumbai
More Firms Are Outsourcing Support Services to India. Will Legal Work Be Next?
Posted Apr 1, 2004 12:06 PM CDT
By Jill Schachner Chanen
Paralegal Dianna Smiley has heard the reports of the imminent demise of her profession because of cheaper labor in places like India, but so far she’s not concerned.
As president of the National Federation of Paralegal Associations, Smiley of Citrus Heights, Calif., says she has yet to hear of any paralegals losing their jobs to offshore outsourcing.
But that could change. Many of the companies that have successfully persuaded the investment banking and consulting industries to outsource work to India now have their eyes focused on the legal profession, hoping to sell lawyers on the benefits of shipping word processing, document management and other support services overseas.
“If you look at every discipline of the law, there is a tremendous emphasis on putting together documentation that does not require a lawyer to do it,” says Ganesh Natarajan, a Chicago lawyer who started Mindcrest Inc., an outsourcing company.
Natarajan’s company now employs 15 people, almost all lawyers, in Mumbai (formerly Bombay). Although he will not name any specific clients, he claims to have found a niche providing “legal processing services” such as preparation of qualified domestic relations orders and denial of medical benefits claims.
Another outsourcing company, New York City-based Office Tiger, says it has begun working with some U.S. law firms to send their word processing work to India. Company representative Joe Sigelman also refused to name any clients.
Office Tiger targets law firms and in-house legal departments for its services, which include desktop publishing, research, litigation support and accounting. Sigelman believes bottom-line-focused clients will ultimately drive lawyers to consider outsourcing alternatives. “Firms are realizing that there may be ways to direct their talent to more specific things other than research and plugging in terms to templates,” he says.
Because of the differences in pay between the United States and countries like India, costs can be up to one-third less, says Despina Kartson of Bowne Business Solutions in New York City. Firms also can reduce overhead associated with office space, salaries and benefits by streamlining or eliminating word processing pools and other support staff, Kartson says. And thanks to a time zone difference, lawyers can actually have work done for them while they’re sleeping.
Still, questions abound about the quality of the work and how to maintain attorney-client confidences. Mumbai solicitor Sandeep Dave, manager of the Global Law Review, says he has heard concerns raised about the proficiency of overseas paralegals in “legal application, reasoning, research and documenting relevant facts for a lawsuit.” They also may lack understanding of U.S. laws and the court system, he says.
Not surprisingly, Natarajan dismisses these concerns. “We have two levels of review, one in India and one here.”
It helps, too, for clients to spell out their expectations. “Not everything has to be a Rolls Royce. Sometimes the client just wants the Chevy,” he says. “It helps to know what the requirements are up front.”
Legal consultant Brad Hildebrandt of New York City is so convinced that offshore outsourcing is the wave of the future for law firms that he is considering branching out into the business. He believes that corporate legal departments will help boost the trend as they continue to prod their outside counsel to cut costs. “The law business is a business,” he says. “This is really part of saying, ‘Maybe we have to and should do business in a different mode.’ ”
For all the talk of outsourcing, no one is, for the moment, talking about shipping actual legal work abroad. While General Electric and West-Thomson Publishing have well-publicized pilot programs in India employing Indian lawyers, no one believes that an American business is ready to see its domestic work outsourced.
Even the outsourcers agree. Says Sigelman, “We are certainly not out to replace attorneys.”