Sometimes it’s difficult to find hard numbers to assess the use of offshore legal services.
Yesterday’s Washington Times provides some details.
The article quotes offshore service provider Evalueserve:
About 1,300 Indian workers provide services for U.S. lawyers, generating about $52 million in revenue, according to Evalueserve, a business and legal research firm with more than 800 employees in India.
By 2015, their billings to U.S. firms would increase to $970 million at the current growth rate.
One cost comparison struck me as a bit light was when it was noted that Indian firms could do legal work for about $40 an hour, whereas a U.S. firm might charge $120 per hour.
$120 per hour? U.S. law firms? Even for research you’d likely double that.
But the $40 per hour? The savings at that rate would start to add up fast.
The article mentions that certain corporations such as United Technologies Corp., Oracle Corp. and Bayer AG outsource legal work, but that officials at those companies did not return calls and e-mails for comment. Given some of the political overtones of the outsourcing/offshoring debate, this reluctance to talk on the record doesn’t surprise me. What’s the upside? Just deliver bottom-line savings, which speaks for itself over the long run.
The article gives good ink to the Venable law firm, allowing Jim Shea, its managing partner, to observe that “Clients are entitled to get these things done in an efficient way.”
Twelve words that beat a glossy brochure any day.
Lastly, a few final numbers caught my eye: legal work outsourced to India could take up 2 percent of new legal jobs in the U.S. over the next 10 years at current growth rates.
Something to think about for law firms–and potential law students.
Updates (28 Sep 05): I noticed this morning that Robert Ambrogi spotted this story first.
The Wall Street Journal also reports ($) today on this trend; a few numbers from that article:
So far, outsourcing has created as many as 12,000 legal jobs world-wide, according to Forrester Research. The Cambridge, Mass., firm predicts that number could shoot up to 29,000 in 2008, with most of those jobs going to India.
One lure of the Indian legal market: the sheer number of lawyers it offers. More than 200,000 Indians graduate from law school there every year — five time as many as in the U.S. — creating an enormous pool of talent to tap.
The WSJ also notes two potential roadblocks raised by offshoring critics: liability issues and attorney-client confidentiality. Sounds more like wishful thinking from those that benefit from Fortress Legal America.
The ship has sailed on offshoring. Just wait to see what 2006 brings.