Legal process outsourcing and offshoring remain hot topics judging by two recent articles. And both illustrate on-going perception issues. 

In GCs Embrace Outsourced Work (The Recorder, 25 Jan 2008) a BigLaw partner objects to offshoring document review because it is “better for lawyers who are working on the case to review related documents.” Absolutely. But few think associates should review every document. Whether contract lawyers or ones offshore conduct the first pass review should have little impact on what associates end up seeing. The key is having a process – human and software – that quickly, accurately, and cost-effectively filters what the case team sees.

Legal Outsourcing to India Is Growing, but Still Confronts Fundamental Issues (New York Law Journal, 23 Jan 2008) reports on a recent conference on legal offshoring. The reporter observes that the economics of offshoring are not as simple as may first appear because

“Maintaining a group of lawyers in India imposes significant infrastructure costs on the outsourcing companies. Aside from office space and computers, the leading companies also have U.S.-trained lawyers working in both India and the United States to supervise the work of Indian staff. They also maintain client development teams to market services to U.S. companies.”

All true but little different than the economics of contract lawyers in the US. Last time I looked, domestic litigation support and staffing companies also maintain sizable client development teams. And let’s all hope review lawyers have space and computers somewhere (and space is generally cheaper offshore).

But yes, it’s probably true that offshore providers have more lawyer supervision. Some of the “delta” (the additional use of lawyers) stems from transactional costs of being offshore but most likely reflects the amount of attention any document review should receive. That is, the problem is not that going offshore mean over-investing in lawyer supervision; rather, it is that in onshore reviews, clients and firms often UNDER-invest in lawyer supervision and project management.

I have oft stated that these are empirical questions, subject to testing. In my post Honestly Held Beliefs May be Wrong I point out that lawyers often operate from honestly held but mistaken beliefs about the way things work. Much of the discussion in the legal profession about offshoring to date strikes me as based on speculation about possible problems of working offshore. The dialog would be much better if more lawyers and reporters commenting on the topic do so based on empirical data and a comparison of alternatives.

[Disclosure: I am not disinterested. I started working for Integreon in Sept 2007. But regular readers will recognize that my changing hats has not changed my analytic and empirical approach to the questions here.]