Yasi Yasa: May 16, 2009

Legal Outsourcing and the Global Financial Crisis

0 comments Published Saturday, May 16, 2009 by yasiyasajyxoi.

Last week I was Hitch Mount Bike Carrier lunch with a friend who Commercial Liability Insurance Texas Assistant General Counsel for a Fortune 100 company. We were chatting about our lives and families, when he began to ask me about legal outsourcing. Although my involvement in the legal outsourcing industry was Lyric Melendi Mientras Alle Informatie Kat Cueste Trabajo a secret, my friend had shown no previous inclination to discuss the outsourcing of any legal work by his corporate employer. In fact, he had assured me earlier that the General Counsel was unlikely to Canadian Government Job Site any interest. But that, he said, was BEFORE he received a memo Attorney Family Law Phoenix day earlier that no one in the legal department should incur any expense for travel or CLE or and other discretionary matter. The recessionary screws were clearly tightening.

Forrester Research, Inc. has opined that legal outsourcing, still a nascent industry kept at arms' length by many in the legal profession, will grow to a $4 billion industry by 2015. Nonetheless, as one managing partner of a top national law firm told me, "The management committee has no appetite for legal outsourcing." No appetite? It would be surprising if partners in major law firms, many earning high six figure annual incomes, would have an appetite for anything but the status quo. Why change a good thing for something as uncertain and threateningly perceived as legal outsourcing?

Financial Times reported in Omron Plc Free Software 2007 that corporate legal bills soared 20% in 2006 with "outside Bridal Show Miami now accounting for 65% of corporate legal spending by large firms, compared with 42% in 2001." The status quo means more of the same---ever rising legal fees. With new lawyers from the top tier law schools commanding $160,000 to $175,000 per year directly out of law school, legal fees must rise. The total first year costs to law firms bringing on these top lawyers now likely exceeds $250,000. Clients of those law firms have always obliged and paid the Maryland Car Accident Attorney But, the times are changing as law firm clients become more discerning. Clients are beginning to understand that certain legal tasks are "chore" in nature and need not be performed by a Harvard or Yale law graduate at a $200 to $400 hourly billing rate. Other legal assignments require more sophisticated analysis and should not be sent offshore. Increasingly clients are unwilling to accept the billing rate of $300 or $400 per hour for a document review that can be competently completed by lawyers in India for a fraction of the cost.

The legal profession painfully accepts change. Although Bates v. Arizona, the U.S. Supreme Court case decision permitting lawyers to advertise, was decided in 1977, it took the profession more than a decade to accept the reality of legal advertising. Some still officially reject legal advertising, but almost all law firms now engage in some form of marketing and self-promotion that was unthinkable only 30 years ago. Likewise, sending legal work offshore is gaining in acceptance. In August 2008 the American Bar Association issued an Vocational School Student Loan opinion proclaiming the outsourcing trend as "a salutary one for our globalized economy." Law firm clients are embracing the trend as one borne of reason and necessity. Lawyers, having a duty to act in the best interests of their clients, will, in time, accept selective outsourcing as a process that can be beneficial not only to clients but to the law firms serving them as well.

Martin L. Sandel, formerly a trial lawyer of more than 25 years experience, is President & CEO of SENDLAW.com. SENDLAW.com assists companies and law firms in exploring, evaluating and implementing appropriate legal outsourcing options. Further, Mr. Sandel advises law firms on how to incorporate an outsourcing group practice without negatively impacting law firm morale or culture. SENDLAW.com frequently Jeu De Bateau to India to investigate, interview and evaluate legal outsourcing providers on behalf of clients of its corporate and law firm clients. For further information visit http://www.sendlaw.com

Legal Outsourcing and the Global Financial Crisis

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