Article on Legal Outsourcing in Canadian Lawyer Magazine

13 Dec ’05

Canadian Lawyer runs an extensive article in the November issue on legal outsourcing. Titled “Associates on Call – Looking Big While Staying Small”, the article is an excellent overview of, among other things, the potential of legal offshoring. I had the good fortune to be interviewed for the article. Simon Hally, the author, goes from one end of this issue to the other in the article – following is an extract that covers our interview, but there is much, much more in the magazine:

Rob Hyndman, a technology lawyer in solo practice in Toronto who has a particular interest in outsourcing, believes it has the potential to transform the legal profession by levelling the playing field for small and large firms. “The common wisdom now is that you’ve got to be big or you’ve got to be focused,” he says, but outsourcing enables small firms and even sole practitioners to bring on extra people with a variety of skills as needed, giving them the staffing advantages enjoyed by bigger firms, but without the overhead.

Large firms, which Hyndman describes as “the high-overhead/high-cost model,” are essential for certain cases, he says. “The work they do on high-value transactions with significant complexity won’t be affected by the outsourcing model. If eBay is buying Skype, they need a big team with a large range of skill sets, so they need a large law firm. But more generic or standard types of business law can be provided equally well by either large or small firms, and the large firms are expensive for that kind of work. Large clients typically go to their large law firms for everything, because it’s simpler. The small to medium-sized practitioners have had a hard time getting that work, as they don’t have enough skill sets, or business flexibility, in-house.”

The “outsourcing model” changes all that, Hyndman says. It gives small firms “an opportunity to dramatically leverage their local market knowledge, experience and client relationships.” Outsourcing to India, in particular, is “one of the unsung opportunities to take on new volumes of business,” he adds. With today’s technology, “it’s much easier to outsource now than it was 10 or 15 years ago, and there’s no reason why patent applications, for example, shouldn’t be prepared anywhere.”

Increasingly, while law offices in Manhattan, Dallas and Los Angeles are closed for the night, work for their clients continues halfway around the world in New Delhi, Hyderabad and Bangalore. It’s still a rarity for Canadian lawyers, though. “I think some Canadian firms are doing it, but they don’t want to talk about it as they’re sensitive to the impression being made,” says Hyndman.

“They may be worried that clients will be concerned about deterioration of quality.”

For a growing number of U.S. lawyers, that concern has been outweighed by the demonstrated benefits of outsourcing certain functions to India: substantially lower costs and quick, sometimes overnight service. Outsourcing to India “is much more pronounced in the U.S., especially in the legal departments of large technology corporations, less so with U.S. law firms,” says Hyndman. “It’s in the early days in the U.K. now and it will come here in Canada.”

Among others, Simon Hally interviews David Perla, one of the founders of Pangea3, a well-known provider of these services.

There is just no question that this issue is picking up steam.

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