October 21, 2004
For Whom Does Outsourcing Toll?
Inflamed election-year rhetoric aside, outsourcing has arrived. According to Forrester Research, just over 40,000 lawyer jobs will be sourced abroad by 2015 (about 8% of total projected lawyer employment). Financial services and IT shops recognized the benefits of overseas staff in the 1990's, and with their track record, corporate legal departments and law firms—including the blue chip Milbank-Tweed, as reported by my friend Jim Lantonio—are following in their footsteps with increasing confidence.
What exactly gets outsourced? As with all other sectors of the economy, first the most-rote, least-value-added work, and then matters proceed to move up the food chain. In Milbank's case, they have started with basic wordprocessing and document production, but other firms have contracted out elementary drafting tasks and legal research.
Why now? Several reasons:
- as noted, other industries have paved the way, defanging the general objection that it's too radical a way to operate;
- security, both from a technological and a trust standpoint, is now up to snuff (often this is aided by mirroring sites located domestically);
- increasing quality of the overseas services means they can compete head-to-head with US-based equivalents (indeed, Jim Lantonio, the CIO of Milbank, reports that an anonymous "satisfaction-reporting" system gave overseas services higher marks than US-based).
Pockets of resistance of course remain: And the adoption rate is farther along among F500 legal departments than AmLaw 100 firms. But so long as clients' experience with the Milbank's of the world is superior (based on cost, 24/7 availability, or both), the pressure to adopt similar strategies will grow.
Despite the inarguable logic behind this trend, does that "8% of all lawyers" figure strike you as a prediction more brutal than enlightened, more threatening than inspiring? Then consider this: Do you think you are in the top 92% of all lawyers?
Put differently, do you aspire to spending your career doing work that by hypothesis: (a) never involves client contact; (b) never really involves interaction with colleagues; and (c) is suitable for the least-skilled 8% of all lawyers? I wonder how John Edwards would answer.
Published by Bruce at October 21, 2004 4:10 PM | TrackBackPublished to Finance | Globalization | IT | Strategy
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