Law Practice

More Gen'l Counsels Mull Outsourcing Options

Despite all the hoopla over outsourcing of so-called legal process work such as litigation document review to India, there are still plenty of U.S. companies that don’t do it. But many reportedly are mulling over a possible change in policy.

“It is a trend that I have observed—a lot more companies are really considering it, if not doing it,” says Stephen Yu, general counsel at Macrovision Corp., which doesn’t outsource. And the numbers support his conclusion, writes the Recorder.

The estimated $80 million outsourcing industry, right now, is projected to increase to $4 billion by 2015, the legal publication points out. So that shows U.S. corporations and even law firms, despite the reluctance of many publicly to acknowledge the fact, are nonetheless spending on low-priced lawyers abroad rather than their more expensive—and higher-paid—American counterparts.

Given the ever-increasing burden and tremendous cost of litigation discovery in the e-mail age, corporations are virtually forced to consider sending such legal work abroad, says Scott Rickman, associate general counsel at Del Monte Foods. “It doesn’t make sense to pay $150 or $250 dollars an hour at some of the larger firms to do the document review,” he notes—as opposed to, say, $25 an hour for attorneys in India to handle the work. However, the San Francisco-based company doesn’t outsource document review … yet.

As discussed in earlier posts, there are liability risks associated with having individuals who aren’t recognized as lawyers in many U.S. jurisdictions handling American litigation tasks. And, even advocates of the outsourcing industry say, having a good contract in place that specifies the standards that apply to the job is crucial. (There may also be U.S. staffing alternatives, as a recent ABA Journal article points out.)

However, Rickman, speaking generally about such warnings against outsourcing legal matters abroad, says he believes they may be overstated. “In these articles, there’s always a quote from a partner at a large law firm about the risk of sending work to India,” he says. “Yes there’s a risk—there’s a risk to law firm profits.”

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