The New York Times just ran an interesting article on how (1) legal outsourcing firms are creating jobs for American lawyers, (2) legal outsourcers are growing—they “made an estimated $400 million in revenue in 2010 … which was just a tiny fraction of the world’s $200-billion-a-year legal market. But Datamonitor predicts legal outsourcing revenues will grow to $2.4 billion by 2012” and (3) legal outsourcers are teaching American lawyers how to do legal work more efficiently. In contrast to the Times’ earlier article on Orrick, Herrington & Sutcliffe’s Wheeling, West Virginia legal insourcing operation, this article generally cheered legal outsourcing.
Among other things, the most recent Times outsourcing article highlights the important point that providing great legal services means more than providing great legal advice. The article notes how “The big challenge is ‘how do you get a bunch of American lawyers to believe that we might be doing things smarter’ by using a process developed in India,” suggesting that the Indian outsourcing companies may have made improvements on how the work they do actually gets done. Biglaw firms have focussed hard on providing the best legal advice and work product possible. And that is critically important to their clients. But there are a number of firms that can provide very high quality legal advice and work product. One way to differentiate is for firms to continue to focus on quality while experimenting with innovations in legal technology and process (including outsourcing, where appropriate). In certain situations, use of technology or process improvements can allow firms to give their clients better, faster and cheaper output. And cheaper legal bills do not necessarily mean firms will make less money.
There is still lots of legal work that needs doing. This may deviate over the short- and medium-term because of factors like the economy or legal reforms. But, on the whole, the legal industry’s not going anywhere and, in fact, lower overall legal costs should lead to even more work for lawyers. How legal work happens is changing, which creates threats and opportunities. Legal outsourcing companies like those mentioned in the Times article are seizing those opportunities. So are Biglaw firms that try to make their practice more efficient. Through use of practice innovations, firms can give their clients better quality work quicker, making clients happier and making firms even more money along the way.