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Legal Processing Outsourcing
A.S. Pradhan

With the economy being what it is, students who have graduated this year are having a tough time getting jobs. Some say it’s because of the glut in lawyers; over 40,000 students got their JDs this year. And then there’s the trend of outsourcing. Yes, even legal work is being outsourced to foreign countries now. It’s called Legal Processing Outsourcing (LPO). Is that a big threat? It depends on who you ask. Most people think that foreign lawyers from developing countries will never be given important work and will only be doing document review. Then there are people who think that even this work cannot be done properly by foreigners who can mess up and cost the firm the case. So this enthusiasm for outsourcing will not last long.

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But outsourcing in the computer industry started the same way. It started from low-cost and low-skilled work and moved up the chain. Of course, the legal profession is very different. It depends upon extensive knowledge of the local jurisdiction’s laws, strong language skills and being present in court. It’s doubtful if foreigners, whether living outside the country or coming here on work visas can meet all these requirements and of course be admitted to the bar. There is another way this outsourcing could play out. American firms could open up branches in developing countries and send their lawyers there. These lawyers would then live on expat salaries, but less than what they would have made if they had stayed in America and enjoy a high quality life. All they would need is a computer and a good internet connection. They could be working from some beach house in Costa Rica or some Caribbean island. Seems farfetched? Maybe right now it is, but in ten years time, who knows?

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Posted on: 06/22/2010 02:56 AM | Number of feedback 6

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Legal Process Outsourcing has a way to go before some of the aspects you described come to fruition. However what cannot be denied is the fact that general counsel and law firm cost structures are being scrutinized much more than they were a few years ago. And economics will continue to put pressure on decisions to onshore or offshore to an LPO provider.

Not as farfetched as you may think, but many of the AM Law 100 could conceivably have back offices setup in India, the Phillipines and elsewhere where they send their new associates to help train and also learn the ropes as part of their own 'training' within the office's law practice.

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