Tag Archives: cost-cutting

Legal Outsourcing: A growing Trend


Outsourcing-offshoring-resized (Photo credit: Wikipedia)

The present financial crisis has changed the way many law firms do business. With cut backs now being the order of the day in most industries including the legal sector, outsourcing has become one of the most popular cost-cutting measures. There is a shift in the legal landscape which has been taking place as far back as 2008, and is likely to benefit prospective employees, who can adapt to new ways of working in a technologically advanced competitive job market.

Connectivity through virtual workspaces, smart phones or networks, now enable virtual freelance paralegals to utilise the same methods and technologies as in-house staff. Work involving legal research, preparing arguments for court cases are now being outsourced.  This has led to a demand in the services of contract workers (freelance),  particularly from large corporations using contract lawyers to do work previously done by in-house staff.

This trend continues to grow especially in the US where multi-national companies are putting in place cost-saving measures by offshoring their work to countries in emerging markets with English legal systems. North America currently provides 65 percent of all outsourced work to India, Britain 20 percent and continental Europe 10 percent.

Despite concerns about the violation of client-attorney privilege, the popularity of this trend led to outsourcing seeing growth of about 40 to 60 percent between 2008 and 2009. The market for outsourcing has been booming in countries like India – now known as the worlds largest back office – where there is availability of English speaking US and UK graduates who are familiar with the common law environment.

Solo practitioners are also benefiting from cost-saving measures by utilising the services of freelance paralegals, allowing the practitioners to focus on building their law firms. The flexibility that this gives to those in solo practice means that they are able to balance their work and life. For most practitioners it’s a win-win situation.

The legal sector will continue to evolve as more legal services that require very little specialisation such as drafting documents and writing simple contracts – work previously done by junior lawyers – are outsourced to freelance paralegals. As economic problems persist in the western economies, demand for workers who are able to do “smart work” also known as knowledge processing outsourcing, will increase. Crisil a research house in India recently forecast in a report released this year, that outsourcing for knowledge intensive skills could triple to $5.5 by the end of 2015.

While some within the legal sector argue that this is a short term boom which will fizzle out as the western economies recover, the huge number of Graduates in emerging economies working for niche focused outsourcing providers, is a sign that outsourcing is here to stay.

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