Outsourcing in the Legal Profession
  • by Robert Leroux |
  • May 15, 2017

Note: This blog is in reply to an article in the Sydney Morning Herald regarding the outsourcing of legal services in Australia.

I am the head of iSapience which is a business process outsourcing company based in Australia and Manila.

With the developments in legal outsourcing that Mr Kowalski is talking about, the reality is often somehwere in the middle.

Mr Kowalski is talking about the future perhaps 30 years to 50 years down the track. The tasks of lawyers are many and varied.

Where I believe the impact is going to be, whether it is through digital disruption or outsourcing offshore, is on time consuming tasks that are repetitive and process driven.

Digital disruption through the use of applications and outsourcing offshore are not necessarily mutually exclusive.

There are already computer applications that can efficiently search for relevant words or terms within voluminous legal documents.

Such applications are mostly used on big cases involving thousands of pages of documents. With big cases, often the most costly and time consuming part is in the conduct of research and due diligence. By using these applications, lawyers save a lot of time, which in turn, save clients money.

However, even with these applications lawyers are still required to use their legal knowledge and expertise to determine the relevance of whatever information the search uncovered.

The applications Mr Kowalski was describing would work the same way in that it will shorten the litigation process. However, the outcome prescribed from these applications even those based on relevant case law and statute can never be taken at face value.

These have to be tested for their relevance to the case. Legislation and precedents are always changing which a good lawyer will also have to take into consideration. Also, even though a case may appear similar to another case, there are often some minor differences in points which can win a case. That is why you can never replace a lawyer’s legal knowledge and experience.

As from the previous example, I agree that such applications will save time and the client money as it will shorten the process but at the end of the day, you will still need a lawyer’s knowledge and experience to win a case.

In terms of the provision of legal services, companies such as LawPath, LawyerSelect and AdventBalance increase the competition within Australia between lawyers by giving clients wider access to more lawyers.

Certainly this will challenge your traditional billable hours and bricks and mortars model but in terms of pricing, clients may benefit from lower rates but perhaps not as much as it is made out to be.

Remember, the legal services are still being delivered in Australia.

Where the price factor really comes into play is in the outsourcing of legal work offshore. The cost savings can be up to 50%. Outsourcing legal work offshore really came about due the advent of the internet. It made it easier to efficiently transfer documents electronically. The roll out of the NBN may actually hasten the trend.

However, and this is a big HOWEVER, the types of work that can be outsourced to legal firms offshore will, in most cases, be the type of legal work that is time consuming, repetitive and process driven.  These include contract processing, medical records review, due diligence, document discovery, records review and drafting of legal letters.

In all cases, you will still need an Australian lawyer or law firm to guide the legal work of the offshore law firm.

Although the Philippines and India are both common law countries like Australia, there are many differences in legislation, case law, regulations, etc between these countries.

Definitely, it will be in very rare cases where a client would go directly to an overseas lawyer to do their legal work for reasons stated above.

A case in point however is what happened in the accounting profession. Some Australian trained accountants have actually moved and established their own accounting firm overseas.

They then service their Australian clients from their office offshore and charge them less fees. They use locally trained accountants to do the work and who are of course paid less than if they were in Australia.

Realistically, this could also happen with the legal profession. I doubt it however that it would reach critical mass.

At the end of the day, whether it is using the latest application, increasing competition between lawyers or outsourcing work overseas, it is really about increasing efficiencies.

In any industry, increasing efficiencies always impact the number of people working in that industry through reduced numbers. The legal industry will be no different.

However, I personally believe that the knowledge and experience of Australian trained lawyers will continue to be invaluable and indispensable but perhaps not in such great numbers in the future.


About the Author

Robert Leroux heads iSapience – a B2B Demand Generation, Customised Outsourcing & Managed Solutions and International Business Consulting Company. Since 2000, he has helped numerous Australian and international clients across many industries including: IT, Digital, Retail, FMCG, Advertising, Wholesale, Distribution and Logistics, Gaming, International Trade, Infrastructure and Governments.

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