Crane on Law by James Crane

Just like in the global marketplace in general, many in the legal industry are considering offshore outsourcing, particularly to India, as a means to reduce costs. It is a seductive concept because who can argue that the rate you pay an employee living in India is going to be less than you will pay someone living in New York, Boston, or even our hometown of El Paso, Texas.

If only the comparison were apples to apples. If only there weren’t other factors that must be considered. If only everything were as easy as simply looking at the price. If I go buy a pair of discount tennis shoes for $7.99, I don’t expect the same quality I would get from a sporting goods store or from a name brand. If I go buy an economy car like a Yugo for $3990, I don’t expect the performance, reliability, or comfort of other “standard” priced cars. (For the younger readers, you can go here to learn more about the Yugo: http://en.wikipedia.org/wiki/Yugo

Additionally, there are other concerns about sending legal services overseas. They include the real threat of industrial espionage when you expose sensitive data to dozens or hundreds of virtually unregulated (by U.S. standards) persons. One must also wonder about technical issues that can cause an entire region or country to lose internet connectivity like what happened last week off the coast of Dubai. (http://www.cnn.com/2008/WORLD/meast/02/01/internet.outage/). This interruption affected the entire region from Egypt to India and has yet to be repaired. For a company involved in deadline intensive litigation, this type of problem can be devastating. There is also the threat of occasional riots. On April 13, 2006, Bangalore, India’s “ Silicon Valley”, was shut down due to riots when 95% of employees could not get to work.

My professional life is dedicated to assisting corporate legal departments avoid risk and prepare defensible business and litigation practices. As such, I cannot advise corporate clients to outsource any part of their legal process offshore to save a few bucks. The hidden costs associated with such a decision cannot be accounted for in a simple dollar-for-dollar comparison.

In my experience, there are better ways to save company resources without offshore outsourcing. Typically at Altep, we are able to reduce the costs of large actions by 25 to 70% by using our innovative technology and methodologies. We also have an established team of personnel that are experienced, efficient, and at a competitive rate for such jobs that are being outsourced, such as coding. We consider ourselves to be “right-shore.”

The offshore lobby is quite sensitive and active, so I expect to hear from them. I would like to hear from all readers with an opinion about this or any other topic addressed in the blog. I will be posting a white paper regarding offshore outsourcing in the spring, so I am interested in your input.