In the last quarter of 2008 America faces economic challenges never envisioned a couple of months ago. How will businesses manage and endure the constraints on credit, demand and growth? How does the financial downturn impact attorneys and law companies which service the company community?
It’s an obvious actuality that companies can only consider modifying two revenue flows, income and expenses, so as to raise profitability. If income is down and not predicted to increase markedly in the long run, customers of law firms will choose the hatchet to costs to be able to survive. Legal fees will be under intense scrutiny. Legal outsourcing, while still a nascent industry, is gaining momentum, being considered in more corporate boardrooms. As the pressures to outsource construct, attorneys ponder whether they should embrace outsourcing legal work overseas or withstand it. At the face of international financial challenges coupled with the rising loss of American jobs why would a U.S. law company want to even consider legal outsourcing? Are there legitimate reasons why concentrated legal outsourcing should be considered by each U.S. law company?
Several weeks ago I received an email from a lawyer who had been considering outsourcing some of the legal job of his law firm. Facing challenges and resistance against many in Matson Law Firm who wanted to keep the status quo, he asked for my advice about what he must tell his partners. Why should the firm outsource legal work offshore, a practice seen by some as adventuresome and insecure, instead of staying the course, doing it”the way we have always done it.” I replied him with the top ten reasons why each law firm should consider discerning legal outsourcing:
1. PRUDENT, TARGETED OUTSOURCING WILL RESULT IN REDUCED LAW FIRM OVERHEAD
Outsourcing some legal work to qualified providers in India will result in significantly lower overhead into the outsourcing law company. In analyzing the relative costs the law firm will probably be smart to carefully calculate the actual costs of employing one attorney or paralegal. Those costs include wages and bonus, medical insurance, vacation and holiday pay, sick time expense, FICA, office space and equipment such as the attorney, paralegal and secretarial staff assigned to that lawyer, pension and profit sharing, auto and parking expenditure, CLE seminar expenses, along with other employment benefits like disability and life insurance. The real yearly price of a single lawyer earning a base annual salary of $150,000-$175,000 is more likely in the assortment of $250,000 to $300,000 each year. NONE of these customary expenses accrue to a law firm using supplemental offshore legal providers.
2. OUTSOURCING WILL ENHANCE LAW FIRM EFFICIENCIES
Selective outsourcing will enhance the efficacy of your law business. Because Indian lawyers work while American lawyers sleep, it is going to be like your law firm has a full time, fully staffed night shift. Some work can be delegated by a partner at 6 p.m. in the evening and the completed task on his desk if he arrives at the office the morning after. Litigation cases will proceed faster through the court system without the demand for extensions of time.
3. OUTSOURCING WILL RESULT IN IMPROVED LAWYER MORALE
As a child not many of the sermons I heard from my pastor stuck with me. However one, when I was fourteen decades old still rings a bell. He said:”Ninety percent of any worthwhile endeavor is pack work, plugging, day in and day out. Only ten percent of our work tasks are necessarily fun and enjoyable.” I’ve always remembered that statement. In more than two years as a trial attorney I enjoyed strategizing and trying cases to juries. However, I did not necessarily enjoy all the trial and deposition prep, study and briefing, document inspection, and other mundane fundamentals of the practice of lawenforcement. A law firm which integrates outsourcing into its practice will inevitably boost more contented lawyers who devote their energies and time to the more challenging, enjoyable and rewarding areas of the practice of law. Just the”chore” legal work is outsourced with the”core” work staying onshore. This allows additional time for client interaction and advancement by the firm’s lawyers.
4. OUTSOURCING WILL RESULT IN OVERALL SAVINGS IN LEGAL FEES TO CLIENTS
Clients of law companies, especially business customers, are looking far and wide for ways to decrease their legal expenses. Many ask why they ought to cover, by way of instance, $200 to $300 hourly for record review. Gone are the times when legal bills are just compensated without scrutiny. Likewise, the yearly increases in hourly rates will not be well received by clients seeking to lower prices. Wise law firms put the interests of their clients above their own. What’s good for the client will ultimately be good for the law firm .
5. THE RULES OF PROFESSIONAL CONDUCT REQUIRE OUTSOURCING CONSIDERATION
The Rules of Professional Conduct of require that: a.”A lawyer should seek to achieve the lawful objectives of a client through reasonable permissible means.” (Rule 1.2) b. “A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions about the representation.”
A lawyer must research and discuss with his client reasonable way of accomplishing the customer’s objectives. A attorney isn’t permitted to charge an excessive or unreasonable fee. It would seem that a lawyer is arguably needed to discuss selective outsourcing as a means of reducing the customer’s ultimate fee obligation and furthering the interests of the customer.