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Offshore Vs. Onshore

I closed this previous post on contract lawyering with a question on whether large firms will stick with the now prevalent "contract attorney" model or follow the lead of corporations like Dupont, which are offshoring document review to Asia. Ron Friedmann at Prism Legal takes a stab at this question here, suggesting that rather than debate the offshore vs. onshore question endlessly, firms should undertake a comparative cost analysis:

Which is better - onshore or offshore review?  The choice is purely an empirical question, meaning a decision driven by hard data: the cost to review each document, adjusted for accuracy. You can argue over how best to measure cost and accuracy, but it’s hard to see how else to decide. (I assume that ethical issues, if any, of going offshore can be resolved. I also leave for another day whether software is not an even better approach than lawyers, onshore or off.)

So the rational general counsel should ask firms for statistically reliable cost and accuracy measures. Firms not already tracking these are probably not effectively managing the review process.

Is  the choice between offshore and onshore a matter of cost, as Friedmann suggests? As Wired GC notes here, if Dupont's experience is any indication, the potential savings from outsourcing are significant, allowing Dupont to cut up to $6 million from its $200 million legal budget. 

But is cost the only factor that law firms should consider in choosing between outsourcing at home or offshoring? Do firms located in the United States make a better impression if they "buy American?" Or conversely, does offshoring show that a firm is more committed to global-centricity, which could help it attract more overseas clients? And does morale at law firms suffer when they hire contract lawyers from within the United States and create a two-tier system of attorneys? Let us know what you think.

Posted by Carolyn Elefant on September 14, 2006 at 07:01 PM | Permalink | Comments (3)

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