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Legal Outsourcing Is Outside Of The Outsourcing Controversy
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Legal Outsourcing is Outside Of the Outsourcing Controversy

As the U.S. presidential race heats up with the soaring summer temperatures, we continue to read news reports of President Obama’s re-election team attacking challenger Mitt Romney’s record of outsourcing.

The accuracy of Obama’s attacks on Romney is irrelevant when we examine the overall picture of how city governments and national law firms are outsourcing their services in order to save money.

This week, the Huntington Beach, California’s City Council voted 5 to 2 in favor of initiating a process to examine whether outsourcing the city’s legal services is a worthwhile endeavor. What is significant about the city council’s favorable vote is that outsourcing the city attorney’s office could result in the entire staff being eliminated except for the city attorney himself who is elected.

The Opposition to Outsourcing

The primary reason for opposing outsourcing legal services or any other kind of service is that it results transferring jobs for Americans to Indians, Filipinos or other foreigners. Outsourcing causes Americans to lose their livelihoods.

While it is true that jobs are being transferred abroad, can we blame a corporation or city official for outsourcing when they are saving so much money? If a law firm or in-house counsel needs to hire contract lawyers to do a document review project, why should he pay $25 per hour for U.S. attorneys when he can hire an Indian attorney for half?

U.S. Cities are Outsourcing

In 2010, the City of Newark, New Jersey began outsourcing certain city services to combat rising budget expenditures. Mayor Corey Booker noted that the city’s personnel costs increased by 63 percent since 2005. His answer is to outsource certain city services in order to get a handle on costs.

Maywood, California is an extreme case of outsourcing. Facing bankruptcy two years ago, the city laid off its entire staff and outsourced all of its city services. Garbage collecting, parks maintenance, legal services and even police have been outsourced to save money.

Recently, several major infrastructure projects involving the repair or constructions of bridges have been outsourced to Chinese firms. For example, a Chinese firm using Chinese workers is completing the new bridge being built between San Francisco and Oakland. Also, the million-dollar project to repair the Alexander Hamilton Bridge in New York is under Chinese management and staff. Why? The Chinese firms are able to do the work more successfully at less cost.

Legal Outsourcing

The primary objection to outsourcing legal services to Israel, India or The Philippines is the perceived low quality of work. While this may have been more accurate a decade ago, the quality of the legal production in India and the Philippines has improved dramatically.

In India, the top legal process outsourcing (LPO) providers are owned or managed in some fashion by U.S. attorneys. Some of the most successful LPOs hire U.S. lawyers to be top managers. One result of the presence of U.S. lawyers in Indian LPOs has been tighter quality control procedures and improved production.

An innovative approach to legal outsourcing has developed where LPO providers combine resources to offer U.S. attorneys and Indian attorneys working together to offer the best legal services at the best price. The model is simple: (1) U.S. attorneys liaison with the outsourcing company; (2) U.S. attorneys train Indian attorneys to do the work; (3) Indian attorneys complete the project; (4) U.S. attorneys supervise the production.

Conclusion

The City of Huntington Beach is only searching for what every company that engages in outsourcing seeks – quality legal services at a significant discount. While critics decry the loss of jobs, the reality is that outsourcing frees city governments, corporations and law firms to channel their resources towards growth which generate more jobs.


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