Outsourcing legal work from the U.S. overseas to India, the Philippines, Israel and other countries has been around for decades. The amount of legal work that is outsourced runs into the millions of dollars.
Nevertheless, many legal outsourcing companies (LPOs) in India and especially Israel are hankering for work.
The conclusion that I reach is two-fold: (1) the legal work going out from American corporations, in-house counsel and law firms is simply a drop in the ocean; and (2) for many inexplicable reasons, the decision-makers in corporate America and law firms do not want to outsource.
Following is a critique of what I call the Five Inexplicable Phenomena in legal outsourcing:
1. In-House and Corporate Counsel and law firms Want to Pay More Money for the Same Quality Legal Work
Legal outsourcing works. It has existed for decades and many benefit from it. Legal costs continue to increase. The higher bracket of legal billing has once again reached the $1,000/hour ceiling. The cost of the discovery phase of litigation has caused courts to turn to computers as a way of forcing down costs.
One would think that LPOs abroad would be swimming in work; but they are not. Israeli LPOs are scraping for work, as well as many smaller LPOs in India. This is what I call the first inexplicable phenomenon that in-house and corporate counsel and law firms want to pay more money for the same quality of legal work.
In truth, Israel LPOs offer the best outsourcing option because it offers U.S. educated, trained and experienced attorneys at incredible savings. Israel possesses a large pool of U.S. attorneys , many who are licensed in good standing , who moved to Israel in the middle or after successful legal careers in America. These attorneys can provide a superior work product.
From criminal law experts to M & A specialists, Israeli LPOs are staffed and ready to give you on-shore quality at offshore prices. There is absolutely no reason to pay $100 per hour when you pay half in Israel.
2. Confidentiality Concerns
One of the recurring objections to outsourcing which also is one of the five inexplicable phenomena is the concern for breaches of security and confidentiality. This is foolishness.
With teams of U.S. lawyers, and many of them licensed, who are bound by their own rules of professional conduct, there is no reason for concern. Confidentiality agreements are signed. Document review work is usually completed by logging into a secured site. When working with highly experienced U.S. lawyers in Israel whose livelihood is directly bound to each project, this concern is really a non-issue.
3. Outsourcing Means Logistical Snafus
Another outsourcing phenomenon is that when in-house or corporate counsel send their legal assignments abroad, they become entangled in logistical snafus with LPOs. I concede that this could occur when dealing with some LPOs in foreign lands where there are language and cultural barriers. However, these issues do not apply when working with Israeli LPOs.
When working with American born and bred attorneys, who are employed by Israeli LPOs, there are no cultural and language barriers because the attorneys are fluent in English and well versed in American culture. Misunderstandings and disagreements are minimal. Through proper communication and client management skills snafus will disappear.
4. The Need to Babysit the Outsourcing Attorneys
One of the most common objections to outsourcing is the claim by law firms and corporate counsel that they want work to be completed "in-house" so that they can monitor progress and supervise the work babysit.
This phenomenon is a faade.
In today's business world where cloud computing and file sharing is as much of a reality as fax machines, work is often completed remotely even by members of the same company and department. Whether the corporation has multiple locations or the in-house counsel works at a remote office, supervision is already minimal. Instead, management is relying on a business ethic that a contractor or employee will complete his to the best of his ability; and quality review verifies this.
In addition, much of the legal work that is outsourced is completed by attorneys logging into secured sites where quick reports based on usernames can provide accurate information on each person's work product.
5. The Time Difference Disrupts Workflow
An additional phenomenon is that outsourcing overseas is difficult because of the time difference.
On the contrary, outsourcing to Israel results in a 16-hour six days-a-week workflow where there is proper communication between the outsourcer and the LPO. Israel works on Sunday, but not on Friday. When the NY outsourcer sends an assignment to the Israeli LPO, the task can be completed and returned to NY before the outsourcer opens its office doors. In reality, the time difference may be utilized advantageously.
In addition, because Israel is only 6 hours ahead of NY, the Israeli LPO can arrange to have its staff overlap half of the workday with its NY counterpart. This enhances communication and success.
One can only conclude that there is absolutely no reason why more in-house counsel, corporations, and law firms do not satisfy their legal needs by outsourcing to Israel where all work is completed by U.S. attorneys at offshore prices.