Justinian C. Lane, Esq.
Let Justice Be Done, Though the Heavens May Fall
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Justinian Lane's Blog

Justinian's Blog

Law Firm Outsourcing?

I read this article at Law.com that discusses how lawyers are considering outsourcing their support staff to overseas countries.

Here's my favorite quote from the article:

Short said the case for outsourcing is compelling. Given an estimated 30 percent to 60 percent cost savings in support tasks, he said, outsourcing could potentially free funds for firms to hire more lawyers.

But law firms might just as likely use the savings to increase partners' compensation. Though corporations can point to shareholder benefit or increased research and development spending in justifying outsourcing, law firms are vulnerable to charges that such moves are motivated only by greed.

What the article doesn't discuss is the fact that most of the law firms discussed in this article, are defense firms that bill their support staff at a fairly high hourly rate - upwards of $100 per hour, in some cases. So if I'm Acme Megacorp, and I hear that my law firm has outsourced their support staff, I'm going to expect to pay less for the support staff. If the law firms do cut the hourly billing rate, then the savings disappears, or is greatly reduced. And if the law firms don't cut the hourly rate, they may lose clients.

There's also ethical problems, too. Lawyers are supposed to closely supervise nonlawyer staff members that work on cases. With the distance and time differences, it's going to be pretty tough to supervise a staff member in India. It's not hard to imagine an unhappy client filing a suit for malpractice.

The real problem is that law firms, like too many other businesses, are focusing on saving money instead of making money.