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Nationwide Worldwide Pay Raise Watch: Mumbai to $8,160?

Taj Mahal India outsourcing Dell computers document review Above the Law blog.jpgMultiple readers sent us this article, from Bloomberg News:

Bruce Masterson, chief operating officer of Socrates Media LLC, asked his outside counsel to customize a residential lease for all 50 U.S. states in 2003. The firm's estimate: about $400,000. He rejected that price tag and hired QuisLex, in Hyderabad, India, which did it for $45,000.

``It was good quality,'' said Masterson, whose Chicago-based company publishes legal forms on the Internet. ``We've been working together ever since.''

Clients are pushing law firms like Jones Day and Kirkland & Ellis to send basic legal tasks to India, where lawyers tag documents and investigate takeover targets for as little as $20 an hour. The firms are reacting to a trend that will move about 50,000 U.S. legal jobs overseas by 2015, according to Boston- based Forrester Research Inc.

Biglaw partners may soon be telling associates: "If you don't think $160,000 is enough to review documents for 2200 hours a year, fine. We'll just ship your job off to India, where 'Biff' and 'Jenny' will be happy to be document drones -- for under $9,000 a year. And if I have a problem with my laptop, they can help me with that too!"

Jones Day, Kirkland Send Work to India to Cut Costs [Bloomberg News]


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Comments

fist

Can you say "legal malpractice?" Sure, I knew you could.

we should lobby and get some strong unauthorized practice of law rules. its for the publics own good... really

Can you say "legal malpractice?" Sure, I knew you could.

Don;t kid yourself- the wrok that Big Law Associates do should be outsourced- a trained monkey can do the work these bratty fucks are doing for a fraction of the cost. Why this hasn't happened faster is a mystery.

"Masterson, whose Chicago-based company publishes legal forms on the Internet. ``We've been working together ever since.''

Hahahahahaha

terrifying

we should lobby and get some strong unauthorized practice of law rules. its for the publics own good... really

Practice rules won't do anything because the work being taken away from Big Law associates and outsourced is not the "practicce of law". Make all the rules you want- they still won;t prohibit sending the work the T10 document monkeys are currently doing to India.

We're all doomed.

What a farse. Please. Hiring contract attorneys to do massive amounts of doc review is one thing; allowing Punjab, with a faint grasp of the English language and no legal training, to review sensitive corporate documents is insane. Really.

We aren't talking about trouble shooting a laptop or slapping stickers on plastic toys...

I am sure that legal offshoring is great for easily defined, simple-to-perform work that is not of significant importance to the company. If anyone thinks that they would like to have Indian-qualified lawyers do this sort of work, I encourage them to do so. We don't want that kind of work at my firm anyway, since we are busy with the difficult, hard-to-figure out, important work that our clients need us for.

12:26, the farce is that I'm guessing that Punjab probably has a better grasp of the English language than you do, in addition to working for a twentieth of the cost with no bathroom breaks.

12:26- I hope that misspelling "farce" was a joke, if not, then the irony of your statment "...with a faint grasp of the English language..." is astounding.

Computers are a bigger threat to alot of scut work than 3rd world non-native english speakers. As computers get more and more powerful they will be able to do amazing things in doc review. I don't know if this will mean less work for lawyers, or just shift our focus to more valuable work like more detailed analysis of the sifting and sorting done by computers.
Do litigators agree with this? I'm transactional, but have done my fair share of doc review.

In making a privilege log you have to swear that the documents were reviewed by an attorney and there is a good faith basis for retaining them. Also, all large litigations have a confidentiality stipulation (which has to be entered by the judge), stating that the documents produced were reviewed by an attorney and found to be confidentiality material of the party producing them. I doubt that a partner would risk a Rule 11 sanction by allowing the other side to come along and say non-U.S. admitted attorneys (assuming that these people even are attorneys) reviewed the documents. Unfortunately, document review isn't going to go away any time soon.

Of course, the worst thing about Mumbai is the compression.

This is a fantastic idea, until something really goes awry and (1) there are serious questions about whether the documents are privileged and (2) the outsourcing firm misses some very key things. Methinks that the outsourcing firm would be very difficult to sue and/or judgment proof.

We get paid a lot because we're privileged to keep secrets and we have a deep pockets. A company that engages in legal off-shoring is probably more risk-tolerant. The clients that most of us deail with on a day-to-day basis aren't going to do this most of the time.

The arrogance of many of those offering comments is truly astounding.

12:43: welcome to ATL!

12:36(3): litigate much? No law firm with a brain would include an attorney review provision in a confidentiality order.

Above The Law, I would appreciate if you monitor and pull off some of the racist comments on this thread. I agree with the sentiments of most people here, but I do not appreciate the racists comments, nor the forum for racists comments especially in a forum for our profession.

12:43:

AMEN to that. What a bunch of megalomaniacs!

I may not make a fraction of what these pompous asses make, but at least I'm a lawyer, with my own case load!

I'm no historian but I seem to recall something about Ghandi having a law degree. I suspect that there are a lot of well trained lawyers in India and if you have ever seen the contract attorneys on a large document review project, you may prefer to roll the dice on them.

12:46, could you identify by their time stamp, which comments in particular, you are referring to, or have they alredy been deleted?

12:36(2) here. No one is responding to my post about computers. Isn't anyone worried about what computers could do? I'm no expert, but I hear great breakthroughs are comming soon in terms of being able to read for content in scanned pages. I'm hearing it will soon be the case that computers will allow one person to do a better job of doc review and analyisis than many, many people combined can do now. Am I completely out of it on this?

12:36 is clearly a troll looking for quotes to use in an article. Beware.

Indian firms might be able to steal a tiny chunk of corporate work, but there's simply no way to outsource litigation. The work has to be done "in" the jurisdiction where the litigation occurs, which doesn't mean that the lawyer doing it must be physically present there (obviously, I can do work on a New York litigation matter on my laptop while vacationing in Aruba), but rather that the lawyer doing the work must be licensed to practice law in that jurisdiction. Outsource it, and you have automatically committed malpractice and violated the relevant code of professional ethics.

So, litigators' jobs, at least, are safe.

Computers don't pose any threat until they can identify the context in which words are used.

Ah, but if there are computers, then they'll need people to run those computers! Oh, wait. No, we're still screwed.

``The objective is to have only the most valuable people in London or New York, and the others in India, China or Columbus, Ohio,'' said Robert Profusek, co-head of the mergers and acquisitions practice at Jones Day in New York....

No MVPs in Columbus!

I can't see computers posing any substantial threat for at least two reasons:

No. 1, they are enormous machines that use massive amounts of electricity to run and require entire rooms to house.

No. 2, the time required just to create the individual punch cards to be read by the computers could better be used to complete the original assignment.

There's simply no application for computers in the legal environment.

*snickers*

Loyola 2L to Mumbai!

I think most Legal research and 50 state surveys of laws (the type of work mentioned in the bloomberg article) should be done at a cheaper level. Biglaw shouldn't be doing that type of work. We should be working on complex transactions that require an intimate knowledge of the securities laws and american financial institutions. Indian lawyers would never be able to do type of work because they lack the knowledge, the exposure and the experience needed to do those deals. What can be outsourced should be outsourced.

I don't think this will impact biglaw at all because I doubt many biglaw shops do this type of work. I am a 2nd year corporate associate at a V25 firm and if I was ever asked to do this type of work, I would try to change my employer because there would be something very screwed up about our business model. Biglaw firms can charge the rates they do because they are working on complicated, high-end transactions that require an intimate knowledge of both the law and the american financial system. No indian lawyer, not matter how smart, could get the later (simply because they can't read the paper, don't have friends in the banking/private equity industry, don't have the 22+ years of American education teaching them about how our banking system works, aren't in nyc to hear the chatter in the bars, don't have the same exposure to our complicated transactions, etc). Low end work will be outsourced but the big complicated deals will never be. Big law is going no where anytime soon.

the sad part about the legal profession is the belief that no one in the world can do what you do, even if what you do consists of sitting in room bates stamping documents.

plus, all the money that a firm can save from outsourcing easily offsets any malpractice costs.

that said...we have a great offer for you today because you have been a valued customer...

2:05: One word - "paralegals." No associate bates stamps documents. C'mon now.

And an Indian lawyer is no more qualified to participate in high-level, complex legal work in the U.S. than I am to represent a client in Indian court. It has nothing to do with their intelligence, it's simply a matter of familiarity with U.S. law and the U.S. system.

1:30: that quote from Jones Day about low-value people being in Columbus is awesome. Did that Jones Day NY partner realize that JD has a Columbus OH office? Way to boost morale.

1:52: whatever makes you feel good, but you have only a meager understanding of how biglaw works. What you describe is certainly not true on the litigation side, where much litigation is driven to biglaw because corporate boards are afraid to hire non big-name firms, because they think hiring a big name insulates them from liability and second guessing.

12:53,

Gandhi studied law and got his degree at University College London and was called to the Bar in England. =) In the late 19th century, that was pretty hardcore.

Shouldn't this be a "Worldwide" Pay Raise Watch?

2:19. Thanks for the insight. I'm definitely not as familiar with the litigation side. I think that rationale will also insulate litigation from outsourcing, no?

BTW, I did not post 2:16.

1:52, 22+ years of American education?

K-12: 13 years
college: 4 years
law school: 3 years

Now, I am a lawyer, so math is not my forte, but from where I stand I am pretty sure that equals 20. Where are the extra two+ years from?

Montessori baby!

I love this story so much.

I love this story so much.

Wow, there are many reasons to think that legal outsourcing won't work, but Indian lawyers' inherent incapability to understanding the work because, inter alia, they don't hang out in NY bars, is certainly not one of them.

I grew up in South Asia. They have good schools and value education. They also have many bright college graduates, as bright as out American graduates, with no opportunities. That changed at least a decade for South Asians who studied computer science. I think the same will be true for South Asians who studied law or other humanities in another ten years. Now that it is easier to scan all documents, outsourcing of document review is already happening through American contract attorneys. We really aren't that far from outsourcing it to South Asia. Next will be witness kits, deposition summaries, and summary judgment motions. If you are one of the lawyers on this post ignorant enough to believe that there are not South Asians out there bright enough to perform these tasks, your jobs will be one of the first to go.

Biglaw firms can charge the rates they do because they are working on complicated, high-end transactions that require an intimate knowledge of both the law and the american financial system.

nonsense- they can charge that much because they represent corporations controlled by people that don't mind shelling out corporate money to the law firms staffed by their friends from college & law school. . The exhorbitant bill isnt paid out of their pocket so they could care less ( generally) Seriously do you honestly believe that transactional work is that difficult or that once you have decent forms you cut and paste an voila a new deal is closed? You are out of touch.

I second 3:47. As an Indian licensed attorney now admitted in NY and practising with a top tier firm, I have to say there is no dearth of talent, legal acumen and enterprise in India. So save the skepticism.

And for the posts on language abilities, English is as native a language to urban Indians as it is to anyone in an English speaking country.

I'm sorry if I offended anyone. I actually think people in Asia tend to be much smarter than me, especially the people in India. But my original point was that it is not just intelligence that is necessary to get these deals done. You need to be in the american financial system to fully understand it. I know many people and have many friends from South Asia who are now working in NYC in banks and their careers are advancing quite rapidly (and they are making more money than most big law associates). But the thing is they are here. They are on the trading floors, surrounded by friends in finance to talk things through with and to brainstorm ideas with. They have senior people around to teach them how things operate, how things have been done in the past, and why they were done in a particular manner. They are working for institutions that have done so many deals and they can draw from so many resources to make sure a deal is done right. The point is, they are no longer in Asia, they are in New York.

I have no doubt that a smart, hardworking, trained south asian lawyer who came to work in biglaw in New York could and would do really well (there are a few partners at my firm who are examples of this). But those lawyers are not "outsourced" lawyers but part of biglaw in the United States. An Indian lawyer who stays in India will be able to figure out complex derivatives, sythetic swaps, etc. just plugging through the docs on their own, but they won't be able to understand all the nuances (and thus they will make mistakes) working in India because they won't have the same institutional expertise at their firm or amongst their social circles in Delhi or Mombai as an associate in New York would. The only way to figure this stuff out is to talk to people who have experience in the area and make sure they gain the knowledge they need to be a good lawyer.

And to be honest, I feel that one of the things that has brought me along the most is having friends on the business side who I could talk to and have them explain to me what was going on. And 3:34 (thanks for pointing out how ridiculous my post sounded), the reason I mentioned the bars, was because that is where i have spent many hours racking my friends' brains as to the purpose of these deals. I didn't mean access to nyc bars in it of itself was important to being a good corporate lawyer, but access to the people in the bars who work on non-legal parts of the same deals so that one can learn about the industry and what the cutting edge ideas were in finance.

This could all be wishful thinking on my part and its possible that I will lose my job to outsourcing in a few years time. In the meantime, I look forward to reading any future posts regarding this.

Chocolate Rain cleans the sewers out beneath Mumbai.

Some stay dry and some will feel the pain.

Let's be honest, as soon as we're significantly threatened, we'll legislate or ABA rule our way into job protection; Partners will only want to outsource in a client-visible, yet ultimately limited/meaningless way; anything less would threaten the golden pyramid that PPP are based on...

12:46: Which comments are racist (by time of posting)?

the LPO industry in India is booming with outsourced legal work from US. Even in its nascent phase, the work done there is pretty complex including drafting patent applications. so i guess only those kind of legal work that require physical presence in US will not be outsourced. the BPO industry of India has already taken the world by storm and LPO will be no different a story in near future.

not to mention the fact the UK law firms have already started recruiting from National Law School, Bangalore and NALSAR, Hyderabad.

I worked with Indian counsel on a corporate deal once. They were supposed to be one of the best firms in the region. They were probably the worst local counsel I have ever worked with. They were certainly very nice, and had quick turnaround, but only seemed capable of focusing on small details (whether we used commas or colons uniformly) and missed major issues of Indian law. On top of that, even though they were only focused on silly summer associate-level details, they would give us drafts that were ridiculously full of typos. Granted, that was only one firm, but it hardly inspired my confidence in Indian lawyers. I'd say that if you're looking to cut costs, you'd be better off with a smaller U.S. market, or, if you really need Indian counsel, make sure you're working with Indian lawyers who have worked abroad in the U.S. or Europe (upping the likelihood that they would produce work up to the standards of a Western client).

1:22: thats quite a general statement to make.

And as an Indian counsel I have worked with some partners in so called big US firms who arent exactly the brightest crayons in the box! there are bad eggs everwhere 1:22. Dont be a bigot!

It's great to be a trial lawyer.

My penis may be outsourced to China.

05:45: castration certain then

I used to work with a big 4 accounting/consulting firm in their legal department. I know that comparing the big 4 to big law isn't exactly fair, but I can tell you that my particular accounting/consulting firm began outsourcing a few years ago and hasn't looked back. The work of whole practice groups involving doc review and analysis has gone overseas (including the work of trained attorneys practicing as consultants in benefits, m&a, etc.). However, few jobs were lost due to the need to oversee and proof the work that was being done by our Indian colleagues. I suspect that this type of oversight will be required by most lawfirms/legal departments shipping work overseas, and few jobs will be lost, at least in the near-term.

Long term - who knows, as overseas firms become more and more proficient.

I used to work with a big 4 accounting/consulting firm in their legal department. I know that comparing the big 4 to big law isn't exactly fair, but I can tell you that my particular accounting/consulting firm began outsourcing a few years ago and hasn't looked back. The work of whole practice groups involving doc review and analysis has gone overseas (including the work of trained attorneys practicing as consultants in benefits, m&a, etc.). However, few jobs were lost due to the need to oversee and proof the work that was being done by our Indian colleagues. I suspect that this type of oversight will be required by most lawfirms/legal departments shipping work overseas, and few jobs will be lost, at least in the near-term.

Long term - who knows, as overseas firms become more and more proficient.