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Pressure to Cut Costs Drives More Work to India

In this troubled economic climate, one trend is clear: Clients are looking for ways to cut costs and are no longer willing to write firms a blank check. A few days ago, I noted that clients are making clear that they don't want their fees subsidizing associate bonuses. And today, the Wall Street Journal reports that clients are starting to proactively ask law firms about using Indian lawyers, who bill at around $75 to $100 an hour, the same rate for U.S.-based paralegals and often less than U.S. barred contract lawyers. (H/T Law and More). In fact, based on the rate at which firms and companies are already sending legal work overseas, Forrester Research Inc. estimates that 35,000 U.S. legal jobs will be moved offshore by 2010 and 79,000 will move by 2015.

In comments on the story over at WSJ Law Blog, a few participants call for the American Bar Association to take a more protectionist approach and prohibit firms from off-shoring work, while others decry use of Indian lawyers as "unauthorized practice of law" since decisions about whether documents are privileged requires legal judgment. So perhaps the off-shoring solution isn't perfect. But until law firms can find other ways to efficiently provide document review services in-house, the offshore option, despite its flaws, is here to stay. The days of $200/hour associate document review are gone for good.

As for associates who are getting squeezed out by these new developments, why not start your own contract lawyering business, as Lisa Solomon suggests at Legal Research and Writing Pro.

Posted by Carolyn Elefant on November 26, 2008 at 01:15 PM | Permalink | Comments (4)


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