From The Economist:
Some legal tasks cannot be done cheaply. If the fate of your company hinges on the verdict, you will want a brilliant lawyer to argue your case. But plenty of legal jobs are routine. American law firms typically get fresh law graduates to do such grunt work and then bill clients for it at steep rates. But the recession has prompted clients to rebel. A recent survey by the American Lawyer found that 47% of large firms had seen clients refuse to have hours billed to beginner lawyers.
American Express, GE, Sony, Yahoo! and Netflix have all started using Pangea3 [, a legal outsourcing firm with most of its lawyers in Mumbai,] for basic legal tasks. The firm reviews documents, drafts contracts and does other jobs with repetitive elements. Many clients hire outsourcers such as Pangea3 directly. They often then approach their expensive American law firm and demand that it start working with the outsourcer.
Law firms are responding in different ways. Some hire outsourcers themselves: a quarter of Pangea3’s business, for example, comes from law-firm clients. DLA Piper, a big American law firm, plans to set up its own outsourcing operation next year. Taking advantage of the tough legal jobs market, the firm will build a network of thousands of non-staff lawyers, says Peter Pantaleo, the managing partner of the New York office. These lawyers will be American but cheaper, perhaps because they are looking for a work-family balance. They will do for perhaps $100 an hour work that might otherwise cost the client $500, says Mr Pantaleo.
The part about DLA Piper is interesting. The article implies that the outsourcing will be to Americans. But what if a law firm started a branch in a foreign country with the goal of doing its low-level legal work more cheaply? (Kind of like Ford opening a factory in Mexico to take advantage of lower labor costs.) I don't know if this has happened yet, or what all the legal and other implications are, but I can imagine things moving this way.
