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.

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Alvin Davis On Firing "A Couple," "Some," and "A Few People."

Intrepid reporter Julie Kay delivers this deliciously rich language from Alvin in describing layoffs at SSD:

Alvin Davis, managing partner of Squire Sanders' Miami office, said on Friday that nine employees in Miami were laid off at the firm on Thursday, including "a couple runners, some staffers and a few people in accounting."

Got it -- what a bunch of anonymous nobodies.

And here's talented legal recruiter Abbe Mald Bunt on the significance of these firings:

"Part of it is humans have been replaced by technology, but the sad part is technology is not who gathers in the communal kitchens to keep the culture and spirit of a firm alive."

Note to Abbe -- those kitchen-lurking slackers usually consist of "a couple runners, some staffers, and a few people in accounting."

Anyways, what are you talking about -- have you seen that rockin' shirt/vest/glasses combo?

The spirit's alive, baby, oh yes it's alive.

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We're All Contract Lawyers in India (Or Will Be Soon).

Hi folks, time for a little actual news about our biz -- intrepid reporter Julie Kay takes a look at the growing trend of hiring lawyers on an hourly or contract basis:

As law firms downsize, laid-off attorneys and new law school graduates unable to find jobs have been turning to an option they may never have imagined at law school: becoming contract attorneys — hired guns for $35 an hour.

Yet in the past couple of months, even that field appears to be showing signs of a slowdown.

Blogs devoted to the topic of contract attorneys are rife with complaints about the lack of work, particularly in New York and Washington; sudden ending of jobs that were supposed to be long term; and the demise of such formerly standard perks as free lunches and car fare.

"The combination of the economic climate as well as the year-end and the change in administration has had an impact on our business," said Andy Jewel of Hudson Legal, which has offices in 11 cities. "With the change in administration, any government investigation or other regulatory work is generally put on hold until the new people are in place. Work has been slow."

Also cutting into their business is the growing popularity of outsourcing to India. Hudson Legal has countered with an ad campaign that encourages law firms to "onshore," and choose U.S. staffing companies where there are no security or privacy concerns and where they operate in the Eastern time zone.

So it's not only the big document reviews where contract lawyers are getting hired -- it's in situations where firms can't afford to hire an attorney as an associate, and pay the related health care and overhead costs.

I found this part of the article interesting:

Howrey is one law firm that uses a large number of contract attorneys — and acknowledges pushing staffing agencies for better rates as of late. The Washington-based firm has a minimum of 75 contract attorneys on the job on any given day and has had as many as 350 with large merger matters.

"We use them in the discovery process," said Ralph Allen, chief operating officer of Howrey. "We don't normally put a $300-an-hour or $400-an-hour associate on first-level document review. We have a process where staff attorneys and associates are monitoring and driving this process, supervising these folks. It lowers the costs for our clients tremendously."

I'd be curious to know if firms employing such lawyers are marking up the rate, or simply passing through the costs directly to the client. We all know big firms frequently mark up research and copying costs, so why not contract lawyers?

This has been SFL, reporting in from Hyderabad.

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The Latest on Mold in the Federal Courthouse

Intrepid reporter Julie Kay continues her terrific coverage of the mold scandal at the "old old" federal courthouse, here:

The children of deceased Magistrate Judge Ted Klein have filed a complaint in Miami federal court accusing the General Services Administration of failing to comply with a Freedom of Information Act request seeking information about the David Dyer Federal Courthouse.

The complaint asks U.S. District Judge Alan Gold to declare GSA — an arm of the federal government — in violation of FOIA and order the agency to provide requested records to the plaintiffs.

The complaint was filed Dec. 28 by Miami attorney Alan Goldfarb on behalf of Andrew and Jennifer Klein.

Popular federal magistate judge Ted Klein — who worked in the Dyer building for many years — died in 2006 suddenly of a mysterious pulmonary illness. Klein's children hired Goldfarb after reading an article in the Daily Business Review, an affiliate of The National Law Journal, about a report citing large amounts of mold and unsafe conditions in parts of the Dyer building.

The article also cited a memo sent by U.S. District Judge Federico Moreno in which he advises all employees of the building to bring the report to their doctors and orders anyone entering the building's basement — where the most mold was found — to wear protective gear, gloves and masks.

Several employees of the building, which houses Miami's magistrate court, have reported nosebleeds, double pneumonia and other illnesses, and at least two have been given permission to work at home.

Hmm. Wonder if Judge Gold will recuse?

This is the tip of the iceberg. As anyone who sues governmental agencies know, they don't usually step right up, come to the table and do the right thing.

Is this an issue better left to fester in the public eye, with a steady drip-drop of damaging headlines and allegations, or should a knowledgeable decision-maker get involved, bite the bullet, and resolve this (and the related cases that are sure to follow) in a fair, reasonable, and expeditious manner?

(note - photo above not the federal courthouse, just my sunny downtown exposure!)

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