2010 The Year of the Outsourcer – Goodbye Junior Lawyers?
It’s cheaper, its popular and it doesn’t look good for junior associates or current law students in the UK or the US.
Cutting costs to reassure clients might feel like the mood of the moment but the outsourcing trend seems more than flash in the pan tactics. There is growing momentum behind outsourcing which began to take hold last year. The latest research produced by accounting powerhouse, PwC, has highlighted the growth of legal process outsourcing services in the wake of the economic downturn. And a new milestone may now be upon us – national firm Eversheds has begun talks to set up an outsourcing business with its South African ally, meaning it could become the first major law firm to enter the legal outsourcing market itself.
On the other side of the coin, outsourcers themselves are relishing this new paradigm. The Times carried an insightful article about Mumbai-based LPO firm, Pangea3:
Much of the work that Pangea3 and similar firms deal with, such as drafting derivatives contracts or conducting due diligence for mergers and acquisitions, was once the preserve of trainees and associates at big City law firms. Some of those firms racked up annual revenues of more than £1 billion during the boom years, in part by billing out teams of junior lawyers for up to £300 an hour for even the most routine tasks.
However, those firms, in a drive to cut costs, are beginning to send that sort of work to cheaper jurisdictions, such as India, South Africa and the Philippines.
Whereas a new recruit at a “magic circle” firm in London can expect a starting salary of about £60,000 — rising to more than £90,000 at the best paid firms — Pangea3 can pay a good Indian law graduate as little as 350,000 rupees (£4,700) a year.
Read those figures and weep. You don’t need Vince Cable’s grasp of economics to see where things might be headed for embattled UK juniors trying to get/keep their foot on the legal ladder.
But whilst some might lose out, others are looking to catch the upside. Legally India reports of one enterprising Indian law student, Ashish Arun, 24, (pictured) who has grabbed the opportunity with both hands:
A final-year NUJS Kolkata student has set up and is running a legal process outsourcing (LPO) firm of seven lawyers.
NUJS student Ashish Arun is the managing partner of Offshore Research Partners, which was set up two months ago as a joint venture with the US expert witnesses database DaubertTracker CEO Myles Levin.
The 24-old entrepreneur takes a circumspect view of low level legal work (if you are the sort of young lawyer who likes to impress their non-lawyer friends with the sophistication of your daily toil, this might seem a little deflating):
“Frankly speaking,” he noted, “I don’t think what the law firms do, apart from the cutting-edge work, is something for which you need a lot of experience. In the basic stuff that these firms do all the time like compliance, drafting documents, etc, I don’t think experience plays a big role.”
Flights to India can be booked here.
