If you’re like most in-house counsel, controlling legal costs is the cause of most of your sleepless nights.
Outsourcing legal work can be a very attractive option. Outsourcing offshore is a cost-effective option for companies that have ongoing needs to produce high-volume legal work, while domestic outsourcing can provide an on-demand, fast-responding team member.
The decision for or against outsourcing is a bottom-line question: How can an in-house legal department provide the best work product for the least amount of money?
Providing work to an outside law firm remains a viable option, and is sometimes the only logical option. But high fees charged by many law firms can be cost prohibitive.
Outsourcing legal projects is appealing because a legal department can expand and diversify without adding the overhead and responsibility of hiring permanent staff.
Offshore legal services
Many businesses have already set up in-house legal departments overseas, most predominantly in Asia, following a trend set by manufacturing and software companies, and even financial institutions. U.S. companies and some large law firms are contracting out legal work to businesses specializing in providing legal research services offshore.
These businesses are typically set up to handle large volume legal projects with the ability to deploy large teams to produce a fast, cost-effective service, the performance of which does not necessitate close proximity to either the law firm or its client.
The staff lawyers typically come from law schools in India and receive training on U.S. law from American attorneys.
Are there ethical concerns?
The New York City Bar Association’s Committee on Professional and Judicial Ethics issued a formal opinion in August 2006 addressing the question of whether a New York lawyer may ethically outsource legal support services overseas when the person providing those services is (a) a foreign lawyer not admitted to practice in New York or in any other U.S. jurisdiction or (b) a layperson. If so, what ethical considerations must a New York lawyer address?
The decision favored overseas outsourcing as long as (a) there was adequate supervision of the contractor; (b) clients’ confidences were maintained; (c) any conflict of interest issues were avoided; (d) there was appropriate billing for outsourcing; and (e) the client’s informed advance consent to outsourcing was obtained.
On the domestic front
Offshore companies are filling the niche between large law firms and in-house legal departments. But they’re not the only outsourcer in the playing field.
Domestic outsourced attorneys offer another alternative. Not only are they proficient in the U.S. law, they are experts in the practice of it. They bring to the table a wealth of experience and their working knowledge of the U.S. state and federal legal system. Clients gain the advantage of the home-grown expert’s first-hand experience as a practitioner, and the benefit of working with professionals from their home turf. Generally, services are provided on-demand either virtually or on-site.
These companies offer part-time in-house counsel to their clients at a fraction of the cost of either hiring a full-time in-house attorney or relying exclusively on traditional law firm counsel.
Scott Soloway has 18 years experience as a corporate practitioner and is a former in-house attorney. As an outside general counsel, Soloway handles a full range of transactions and contract negotiations.
“There’s a growing trend of very experienced, highly-skilled attorneys leaving the safety of their law firm or in-house positions to pursue a better lifestyle and offer their services independently to companies with or without in-house legal departments,” Soloway observes.
Contract general counsel can make use of an extranet to be a fast-responding team member. An extranet is essentially a private intranet site made partially accessible to authorized outsiders.
This allows contract attorneys to efficiently integrate their work product with their client’s system. They can easily and securely share documents and messages with clients.
Denise Annunciata has been a paralegal for 21 years working in law firms and in-house legal departments. Denise is the founder and coordinating paralegal for Virtual Paralegal Services, LLC (www.virtualparalegalservices.com), which offers on-demand paralegal assistance to in-house legal departments and solo or small firm practitioners.