Is Offshoring Legal Work About To Go Out Of Fashion?
ALB recently reported that Standard Chartered has gotten in hot water for offshoring work, which got us to again thinking about how the offshoring trend is affecting law firms and young lawyers on the hunt for jobs. But first, to the StanChart mess:
“Offshoring of back office work to India, a trend among banks and accounting firms, came under new scrutiny with allegations that Standard Chartered Plc moved compliance oversight work dealing with Iranian banking transactions to India to avoid U.S. regulators.
Cost savings, not escaping regulatory oversight are generally assumed to be the primary goals of sending back office work to India, where employees are paid far less than in the United States and much of Europe.
New York state’s bank regulator accused Standard Chartered on Monday of setting up an offshore regulatory compliance system dealing with Iranian banking transactions that was “a sham” meant to escape U.S. Treasury Department oversight.”
Of course, this carries over to the debate about the effect offshoring is having on the legal job market and how lawyers and firms feel about the process. Not only from a jobs perspective, but also because the legal profession is predicted on the idea of perfection. One mistep in a contract or brief could cost a client or firm millions. But, of course there are other concenrs. The Global Legal Post weighed in with a survey:
“The outsourcing of legal processes – and potentially higher-end services – elicits much emotion; the terminology also generates significant confusion. On the emotional side, outsourcing could profoundly change the traditional structure of Western law firms as work that trainee and younger lawyers traditionally cut their teeth on disappears to cheaper overseas jurisdictions. Confusion reigns as lawyers often immediately equate outsourcing with ‘off-shoring’, in other words, sending legal work to those cheaper overseas jurisdictions. But, as our survey of leading global in-house lawyers suggests, so far, at least, the temptation is not to stray too far from home.”
The survey results are not surprising. 3-4 years ago, offshoring lower level legal work was becoming a seeming no brainer, with clients becoming sharply cost conscious. But, lately, we’ve personally encountered executives at e-discovery firms that are opening up multiple offices in the U.S. and U.K. They are purposefully “reshoring”! The primary reason, according them, are quality concerns:
“Offshoring of legal services has caused a lot of debate involving its sustainability and viability as an alternative to law firms. These discussions usually involve buyers of organizations, law firms and Legal Process Outsourcing (LPO) service providers. Buyers are usually faced with managerial problems when dealing with LPOs. These include but are not limited to communication barriers, poor quality of work delivered and data security concerns.”
And this is just part of the problem…
So, while the job market is still rather soft, especially for associate level work, you can definitely expect an uptick in the coming year or two as backlash to offshoring legal services builds.
To see what’s on offer now, please the job search page at Law Alliance.
