|
Opponents of
practice cite risks, ethical issues
By Karl
Schoenberger Mercury
News
If William Shakespeare had written ``Henry VI'' under today's
economic circumstances, he might have penned that famous line as:
``The first thing we do, let's offshore all the lawyers.''
That version of the drama is appealing to Ajit Gupta, chief
executive of Speedera Networks, who complains about the thousands of
dollars an hour he spends on fancy U.S. patent lawyers when his
network infrastructure company gets into legal sword fights. He's
entertaining the idea of looking to India, where Santa Clara-based
Speedera has a subsidiary, for a cheaper alternative.
``I'm willing to try anything that can reduce my costs,'' Gupta
said. ``We're a global company that focuses on the bottom line. We
have to be competitive, even if it means taking some risks.''
Offshoring legal work is the latest play in the rapidly changing
and increasingly global theater of business, where all kinds of
white-collar jobs -- from software engineering to tax-preparation
services -- are being sent abroad. It's still not clear how big
legal offshoring will be, and skeptical audiences question the
ethics involved in sending legal casework and privileged client
information overseas.
But Gupta's Speedera is not alone among technology companies
taking the cue on legal offshoring. Cisco Systems arranged with a
U.S. law firm to have technical writing done by engineers in India
for some of its patent applications. Microsoft had patent research
done in India. General Electric has experimented with a legal team
in India to draft contracts and other legal documents.
In Palo Alto, the Mumbai-based law firm
Nishith Desai Associates recently raised the curtain on IP Pro,
an offshoring service supplementing its core business of advising
U.S. clients on India's legal system. IP Pro already has three or
four ``big name'' clients who are ``trying us out,'' said the firm's
Vijay Sambamurthy. Its staff of eight paralegals in India drafts
U.S. patent claims, which are checked for quality by a domestic
law firm.
``The potential is huge,'' Sambamurthy
said. ``You can cut your costs by at least 40 percent.''
Some of the biggest Silicon Valley companies are waiting in the
wings.
``It's not consistent with our past practices, but we certainly
would be open to evaluating it going forward,'' said Intel spokesman
Chuck Mulloy. Intel's overseas subsidiaries have relationships with
foreign law firms, he said, but its legal department in Santa Clara
hasn't farmed out work to offshore contractors yet.
``The devil is in the details. It all depends on what kind of
legal work we're talking about. Some of it wouldn't make
sense.''
Online records
Steven Lundberg, a Minneapolis lawyer specializing in
intellectual-property issues, said his firm first turned to India
when it couldn't find enough qualified local talent to proofread
patent applications.
``Since all our records are online, it was easy to send them over
there,'' Lundberg said. ``The quality has been great, and the prices
are great.'' He expanded the offshore work to searches of
public-records data, but drew the line at confidential client
information.
The dialogue on legal offshoring is a sensitive one that many
companies want to avoid because of a backdrop of cutbacks and
job-security worries among employees. So it's hard to assess how
many companies are offshoring legal work.
But a growing number of U.S.-based companies are selling the
services of skilled Indian professionals, who perform such basic
tasks as patent research and document preparation. In-house
corporate legal departments and large patent law firms are their
star customers, they say.
Abhay ``Rocky'' Dhir, a Dallas lawyer and entrepreneur, thinks
there are very few jobs his three lawyers in Bangalore can't
perform.
For a bargain hourly rate as low as $60 (compared with $350 at
the low end of the typical U.S. scale), Dhir's Atlas Legal Research
can study legal precedents in state law to craft arguments in a
trial brief. It's possible because U.S. case law is available
online, and India's English-educated lawyers work in a common-law
legal system similar to ours.
Dhir said the Indian lawyers he has recruited and trained are
fully qualified to compose legal briefs, which he carefully screens
and edits to maintain quality. He thinks they offer advantages other
than their low cost.
``Because they weren't trained in this jurisdiction, they have a
fresh perspective,'' said Dhir, 28, whose company has about 50
clients and grossed $160,000 last year. ``They approach the law in a
very innovative way and see solutions even I don't see.''
Research, not advice
Leon Steinberg, who runs the legal offshoring firm Intellevate in
Minneapolis, said his Indian lawyers in New Delhi and Bangalore
provide research for law firms and in-house corporate lawyers, but
they stay clear of legal opinions.
``We will not produce the final work product, and we don't give
legal advice or draw conclusions,'' said Steinberg, who added that
many of his clients were tech companies in Silicon Valley. ``What we
do is provide U.S. lawyers with information so they can use their
own training and legal experience to make legal conclusions.''
The ethical questions depend on the type of work offshored, said
Matthew Powers, head of patent litigation in the Redwood Shores
office of Weil, Gotshal & Manges.
``My view is that legal services are no different than any other
services -- there are some that can be commoditized, like data
collection and low-level legal research,'' he said. ``But there are
some that can never be outsourced, especially when it comes to
exercising legal judgment.''
But having legal work done in India involves risks for the
American lawyer, no matter what the level of service may be, said
Mark Tuft, a legal-malpractice defense lawyer with the San Francisco
firm Cooper, White & Cooper.
``There are a lot of risks and ethical issues that have to be
managed,'' Tuft said. ``The domestic lawyer has the duty of
supervising any work done overseas. You have to ask what this does
for client confidentiality and other lawyer responsibilities. Is it
the client or the lawyer who benefits from the lower costs involved?
Who's responsible if you're sued for legal malpractice when the work
is done offshore?''
The benefits apparently outweigh the risks for the legal
offshoring companies, which include Lawwave.com, Quislex and Office
Tiger, all based in New York, and Lexadigm Solutions of Grandville,
Mich. But the firms have fewer than a dozen lawyers on each of their
payrolls in Chennai, Bangalore and suburban Delhi.
``We're just at the starting line with this,'' said Tuft. ``We
don't know how far it is going to go. But I think law firms are
going into this very slowly and very cautiously.''
Contact Karl Schoenberger at
kschoenberger@mercurynews .com or (415) 477-2500.
|