India Outsourcing – CC and Eversheds Joined by Others
With bonuses being slashed and freezes being put on associate salaries, firms are really striving to cut their costs these days. Latham & Watkins has become the first major law firm to announce that it is freezing associate pay for 2009. Expect more to follow. Whilst this is disconcerting, one can look to short term economic factors to rationalise such moves. More concerning long-term trends for junior lawyers appear to be in the form of legal process outsourcing (LPO). We …
With bonuses being slashed and freezes being put on associate salaries, firms are really striving to cut their costs these days. Latham & Watkins has become the first major law firm to announce that it is freezing associate pay for 2009. Expect more to follow.
Whilst this is disconcerting, one can look to short term economic factors to rationalise such moves. More concerning long-term trends for junior lawyers appear to be in the form of legal process outsourcing (LPO). We have looked at this issue before in relation to Clifford Chance and Eversheds who are at the forefront of such moves see click . However, according to new research from RSG Consulting , up to ten of England’s top 30 law firms have now outsourced back office functions or legal work to Indian LPO firms. The worrying question is, what happens if, or more likely when, outsourcing of actual legal work starts to become mainstream? Is this a real issue?
The RSG report apparently notes that LPO companies employ Indian legal graduates with starting salaries of about $7,000 (£4,700) — while top Wall Street firms pay their newly qualified associates about $160,000 (£108,000) a year. So in terms of driving business efficiency, it is something of a no-brainer.
The downturn may have more ominous long-term affects for junior lawyers than just slashed bonuses and salary freezes. But young hopefuls can still console themselves with the thought that partnership ranks will have to be made up from somewhere…
What do you think?
December 17, 2008
were all doomed
December 17, 2008
I don’t think it follows that everything will head out there, people still want a bit of face to face when dealing with their lawyers.
December 17, 2008
Its’ called video conferencing
December 17, 2008
Correct – with the advent of a new era in the use of on-line technology and cheaper sources of work watch the UK service sector flex.
December 17, 2008
I can see the logic but it will be a long time before you see firms getting rid of the bottom of the pyramid to India etc – you will still need junior lawyers to co-ordinate all the low-end sh** over here. Partners are not going suddenly start handling that stuff themselves.