Sorry, Your Crappy Document Coding Project Has Been Outsourced to India

Intrepid reporter Julie Kay files a well-researched and nuanced piece on big firms sending their document review and other legal work to India:

The general consensus is that law firms and corporate counsel began outsourcing lower-level legal work to India -- and a small number to the Philippines -- about five years ago. That work includes "back-office work": document processing and other work traditionally done by paralegals and new associates.

In the past couple of years, the market has grown, fueled by corporate budget pressures, favorable bar opinions and an explosion of LPOs around the country, which now total about 80. And the work they are doing is becoming more wide-ranging, including intellectual property, legal research, contract and conflict review and litigation support.

Forrester Research projects that legal outsourcing to India will reach $4 billion by 2015. Some experts, however, find that number too low and others too high. Regardless, other numbers don't lie -- there are an estimated 800,000 lawyers in India and nowhere near that many jobs. Attorneys there charge, on average, $35 an hour, or no more than half of what an upper paralegal or lower-level associate bills, and up to three times less than an upper-level associate's time.

I think any big firm civil litigator has encountered this over the last few years. But Julie's article leaves unasked and unanswered this question -- what does the firm charge the client for this outsourced legal work? Is a firm mark-up to a client ethical or legal?

This Forbes article by Daniel Fisher suggests that courts may not like huge mark-ups on grunt work performed by temps, whether they are in India or Indiana:

The case illustrates how plaintiff attorneys in securities class actions have an incentive to hire small armies of temp attorneys to justify their fees to judges.

Stephen Vasil, a Yale Law School graduate, and Andrew Gilman, a New York University law grad, were hired through a temp agency to work on the Xerox case. Vasil says they often performed glorified secretarial work, including reviewing electronic documents to identify their author and destination. Vasil was paid $35 an hour, Gilman, $40. Yet the law firms in the case are asking for roughly $500 an hour for their services.

"We joked we could hire a bunch of 10-year-olds to do it for us," says Vasil, 34.

Having recently read Paul Theroux's excellent rumination on memory, travel, and aging, Ghost Train to the Eastern Star: On the Tracks of the Great Railway Bazaar, where Paul visits the outsourcing capital of India, Bangalore, it's clear to me there are still unresolved and perhaps unexamined issues regarding the outsourcing of legal work to that country.

In the meantime, big-firmers, be lucky there are still grunt-work coding jobs and doc reviews to be had, whether here or in Bangalore.