Outsourcing: Win Some, Lose Some

My article at Law Technology News on Milbank's outsourcing their wordprocessing to Chennai, India, is now up.   How, you might well ask, could control-freak lawyers possibly cope with the news that their documents would not be processed under their noses but halfway around the globe, out of sight?  Read about the brilliant double-blind trial period.  And many thanks to Jim Lantonio, their Executive Director, for responding to my questions and follow-up even though he was abroad.

While Milbank's is a success story, Deloitte has just released a report "calling a change" in the outsourcing market.  Basically, Deloitte questions the benefits of outsourcing once one considers their "fully loaded" costs, including the burden on management, security/privacy risks, and the potential loss of expertise, reservations that have always seemed to me to be underplayed.   A more speculative prediction Deloitte makes, which is entirely plausible on its face although I have no independent means of verifying it, is that the vendor market is about to undergo a consolidation phase, decreasing the bargaining power of would-be US outsourcers.  Bottom line (and I quote):

• Seventy percent of participants have had significant negative experiences with outsourcing projects and are now exercising greater caution in approaching outsourcing.  
• One in four participants have brought functions back in-house after realizing they could be addressed more successfully and/or at a lower cost internally.  
• Forty-four percent of participants did not see cost savings materialize as a result of outsourcing

En garde.