Sunday, January 25, 2009

Demand for U.S. legal associates is declining - WSJ Report

It's clients who are helping push routine legal tasks offshore, particularly to India. They know the cost advantage. General Counsels have been telling me this is going to revolutionize how BigLaw conducts business, especially its billing practices. "Change is coming from the client side," said one Midwestern GC in manufacturing.

In their article in THE WALL STREET JOURNAL today Niraj Sheth and Nathan Koppel report that when negotiating the terms and conditions of working with a U.S. law firm, clients frequently ask about using Indian lawyers. A seasoned Indian lawyer bills at $75 to $100 an hour versus U.S. associates who bill at $200 an hour. By 2010, Forrester Research Inc. estimates that 35,000 U.S. legal jobs, mostly those junior kind, will be lost to offshore firms. By 2015, that number will reach 79,000.

Since both Indian and U.S. legal systems are grounded in British law outsourcing can proceed smoothly. When the wok is closely supervised by senior attorneys at U.S. firms few problems will arise, whether that be in confidentiality or quality of service.

What seems to be happening is that demand for U.S. legal associates is declining and will continue to do so.

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