Some Americans choose to work in INDIA

http://www.nytimes.com/2010/08/05/business/global/05legal.html?_r=1&partner=rss&emc=rss

NOIDA, INDIA — As an assistant attorney general for New York State, Christopher Wheeler used to spend most of his time arguing in courtrooms in New York City.

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Today, he works in a sprawling, unfinished planned suburb of New Delhi, where office buildings are sprouting from empty lots and dirt roads are fringed with fresh juice stalls and construction rubble. At Pangea3, a legal outsourcing firm, Mr. Wheeler manages a team of 110 Indian lawyers who do the grunt work traditionally assigned to young lawyers in the United States — at a fraction of the cost.

India’s legal outsourcing industry has grown in recent years from an experimental endeavor to a small but mainstream part of the global business of law. Cash-conscious Wall Street banks, mining giants, insurance firms and industrial conglomerates are hiring lawyers in India for document review, due diligence, contract management and more.

Now, to win new clients and take on more sophisticated work, legal outsourcing firms in India are actively recruiting experienced lawyers from the West. And U.S. and British lawyers — who might once have turned up their noses at the idea of moving to India or harbored an outright hostility to outsourcing legal work in principle — are re-evaluating the sector.

The number of legal outsourcing companies in India has mushroomed from 40 in 2005 to more than 140 at the end of 2009, according to Valuenotes, a consulting firm in Pune, India. Revenue at India’s legal outsourcing firms is expected to grow to $440 million this year, up 38 percent from 2008, and should surpass $1 billion by 2014, Valuenotes estimates.

“This is not a blip, this is a big historical movement,” said David B. Wilkins, director of Harvard Law School’s program on the legal profession. “There is an increasing pressure by clients to reduce costs and increase efficiency,” he added, and with companies already familiar with outsourcing tasks like information technology work to India, legal services is a natural next step.

So far, the number of Western lawyers moving to outsourcing companies could be called more of a trickle then a flood. But that may change, as more business flows out of traditional law firms and into India. Compensation for top managers at legal outsourcing firms is competitive with salaries at midsize law firms outside of major U.S. metro areas, executives in the industry say. Living costs are much lower in India, and often, there is the added allure of stock in the outsourcing company.

Right now, Pangea3 is “getting more résumés from United States lawyers than we know what to do with,” said Greg McPolin, managing director of the company’s litigation services group, who divides his time between India and New York.

Outsourcing remains a highly contentious, hot-button issue in the West, particularly as law firms have been trimming their staffs and curtailing hiring plans. But Western lawyers who have joined outsourcing firms are unapologetic about the shift toward India.

Leah Cooper left her job as managing attorney for the mining giant Rio Tinto in February to become director of legal outsourcing for CPA Global, a contract legal services company with offices in Europe, the United States and India. Before hiring Ms. Cooper, CPA Global added lawyers from Bank of America and Alliance & Leicester. The company has more than 1,500 lawyers now, and Ms. Cooper said she planned to hire “hundreds” in India in the next 12 months.

At Rio Tinto, Ms. Cooper said, she became a “huge champion” of the idea of moving work like document review to a legal outsourcing company “because it works really well.”

“It really is the future of legal services,” said Ms. Cooper, an American who is based in London and travels regularly to India and has spoken widely promoting outsourcing.

(Still, she acknowledges there is hostility toward the practice. “When I was doing public speaking, people used to joke that I had better check under my car” for something planted by a junior associate angered by her views, she said.)

Many legal outsourcing firms have offices around the world to interact with clients, but keep the majority of their employees in India; some also have a stable of lawyers in the Philippines. Thanks to India’s low wages and costs and a big pool of young, English-speaking lawyers, outsourcing firms charge between one-third and one-tenth what a Western law firm bills per hour.

 

This is a disturbing trend. How do US laws protect us from intellectual property rights theft and identity theft when the company you contract with in the US outsources the work to India?

 

There is a lot of money to be made in India right now. Unfortunately the country is still relatively unstable and is quite a risk to put a lot of money there.

 

Whoever outsources intellectual property development to any country and relies on contracts is a fool, period, a fool.

 

I wonder what a dollar collapse would do the the economics of this type of activity?

 

There is a serious situation of India-Pakistan war if there is another Mumbai-style terror attack.

 

People have a choice. I wouldn't want to live there no matter how much money can be made there.

 

Many law firms outsource work to India andt charge their clients full US rates. Even typical contingency cases where the us lawyer makes 1/3 to 1/2 managing the client outsource much of the work to reduce internal costs.

The clients primarily outsourcing these services are our largest law firms... Individual clients and corporations are barred from directly using these service companies.. Unauthorized Practice of Law issues.
To skirt these issues only a licensed attorney can delegate work abroad and is directly responsible for supervision.

Just know your law firm will be billing out these indian associates at $125 to $300 per hour and paying $5 - $10. There have been mass layoffs in many of the largest law firms since 2008.

The other pseudo billing scam is research... charging clients $650 for a case citation. These databases are compiled in datacenters in India and create some nice pure profit billings.