Tuesday, July 20, 2010

CONCERNS – LEGAL OFFSHORING TO INDIA.

The advent of legal off-shoring came out of the crying need to cut costs. We understand the reasons of various giant in electronics, automobile & other sectors opening their industries across the border with motive to transfer the technology for developing the products at cheaper rates. Many big brands of the world had opened their units in countries like China, India with the sole motive to produce the units at lower cost. One does not understand as to why concerns were not raised for those, off-shoring of huge industries out of their countries.

Let me examine it from the view point of consumer living in developed country. Mr. ‘X’ living in a developed country wants to purchase an article. He gets two options i.e. pay ‘A1’ for the said article being produced & sold in his country or pay ‘A2’ for the same article but being produced in other country & sold in his country. The different questions arising in his mind for choosing one of them can be put like this.

A. What is the difference between A1 & A2?
B. Is there any quality variation between the articles produced in different countries?

Mr. ‘X’ would prefer buying the article in which he pays less and gets the quality product. As I understand Mr. ‘X’ would buy article by paying ‘A2’ as the cost would be quite less. I am sure Mr. ‘X’ did not think of the loss of job in his country if he buys the article produced in other country. No eyebrows were raised for the export of goods produced by developing countries to developed countries.

But incase of export of services by developing countries to developed countries the logics become different. However, we still think of loss of jobs while talking about offshore industry. The concerns raised for outsourcing of services get a national touch when we try to understand and justify the outsourcing. The real concerns like quality, confidentiality are dominated by the issue of Nationalism. The decisive factors determining the issue of off-shoring/ outsourcing are:

a) The need of outsourcing which in turn is influenced by following things:
i. Cost effectiveness
ii. Non-availability of resources
iii. Time Zone Benefits

b) The availability of provider /people to give services depending on the following:

i. Being compatible in providing the services
ii. Availability of resources
iii. Capable of delivering quality services
iv. Breaking the language & accent barriers

The Push & Pull factors match up to determine and resolve the concerns of this infant outsourcing/off-shoring industry.

Saturday, July 3, 2010

IS LEGAL PROCESS OFFSHORING AN EXPORT OF SERVICES?

The cross borders issues generally prevail in the development of countries. This reminds me of an elderly man’s saying “The man on latch of a door control the flow of air from outside to inside & vice versa”. The import & export of goods is decided by different factors like the availability, demand and need. Country intends to export the goods looking into the fact of the ability to produce those goods & get them consumed in other International markets. The motive of export is to earn foreign exchange.

In case of offshoring the services cross border the organisation do not directly earn. However, the cost of those services in-house looks expensive which encourages its outsourcing. Offshoring can be a symbolic way of export when we consider the savings as also forming part of earning. In this services are off-shored to get the same being delivered at low prices. I am not trying to show the offshoring of jobs but the offshoring of services which technocrat offers to one’s clients.

A very simple hypothetical situation can be used to understand the balance of exchequer between two countries. Country ‘A’ exports various high profile and expensive goods to country ‘B’. In terms country ‘A’ needs to settle the balance of payment with country ‘B’ but the same always remain tilted towards country ‘A’. Country ‘B’ has got an excellent pool of people who can deliver good number of services to country ‘A’. This can be the best way to make up balance of payments as far as country ‘A’ & country ‘B’ are concern. Logically the export of goods from country ‘A’ to country ‘B’ can be matched up by export of services by country ‘B’ to country ‘A’.

Is it the way to conclude that export of services is also near to export of goods.

CAN I OFFSHORE WITHOUT REDUCING MY BILLING.

Legal Process Outsourcing (LPO) got the boom due to the cost cutting. There could be different possibilities of sharing the benefits arising out of LPO viz:-

a) The benefit completely passes to the person directly offshoring the services.
b) Sharing the benefits between the person offshoring the services & whose work is being offshore.
c) Intelligent offshoring:

The offshoring industry has been passing through turbulent times as far as Legal Process Outsourcing (LPO) is concerned. As far as offshoring of calling is concerned, there were no hindrances in its growth. The Business Process Outsourcing (BPO) could grow as the benefit of cost cutting passed only to the organization directly outsourcing the same. There were no constraints on the organization except the primary concerns.

As we talk about Knowledge Process Outsourcing (KPO), its growth was not many folds yet it grew. The reason of outsourcing had been the benefit of cost but constraint came from various angles like lack of growth in the said industry, difficulty in transferring & sharing knowledge based activities. The only part of the KPO industry which could develop consisted of IT offshoring which included developing, maintaining & repairing the software & hardware systems. In a way the growth of IT offshoring catalyzed the birth & growth of Legal Process Outsourcing (LPO).

It can well be understood that the offshoring of Legal & Paralegal services consists of:-

I Offshoring Paralegal Services including Legal Transcription, Filling of Forms etc.
II Offshoring Secretarial Services including maintaining relations with clients, writing letters to them, raising bills etc.
II Offshoring Projects of services like document review etc.
IV Offshoring provisional working of attorneys.
V Offshoring the monotonous part of core Legal working.

All the time the main cause of concern for the law firms & attorneys have been that the offshoring in a way reduces their own billing. The most frequent Question asked to me by attorneys & partners of the law firms from UK & US have been, “CAN I OFFSHORE WITHOUT EFFECTING MY BILLING?” My answer had been “YES.”

Thursday, May 27, 2010

IMMIGRATION OR OFFSHORING

Developed economies always become attractive and as such magnetize people from other economies. This results in people traveling by any mean to those countries where the economies are developed. United States have always been attracting people from developing countries since long. Number of people applied for immigration to US, similarly number of people were granted one or the other type of visas in last five years. US policies for visa had become tough after 11th September’2001 it was but natural.

How so ever tough the immigration policies had become yet the immigration continued people have always been finding one or the other ways to travel to developed countries like US & UK. This had always put lot of constraints to their economy, security, culture, religion & other aspects of those countries.

I understand the immigration was the first part of balancing the economies. The next step turned out to be off-shoring of services instead of inviting people to the country. The birth of off-shoring is being deep rooted. The debate between immigration versus off-shoring is yet to commence so it may not be ideal to find any opinion on the same but it will developed once there will be interaction & discussions.

Thursday, March 11, 2010

Need for 2nd Level Legal Offshoring

Everybody thought the growth of legal outsourcing would multiply but it didn’t grow as it was expected. In the first level of legal outsourcing, eyes were set on cost cutting.

Despite excellent projections it couldn’t come out of its infancy stage. The proximity of clients and vendors could not increase. Many LPO’s were born like bubbles and vanished identically. All the way it was a good signal to show there was a gap between two ends. The said gap could be bridged if some better means were discovered.

The first level of legal Outsourcing consisted of Captive centers and off shoring of the services to LPO’s.

The Captive Centers started closing down not because of the same were un-economical but primarily due to other problems connected with the working. The stress taken by a company in running the Captive Unit had started becoming a nuisance to them. The very purpose of setting up Captive Unit came under attack whereby its future was sluggish. Though a good number of captive centers have been efficiently working yet most of them could not prove to be economical. Factors like investment, employee attrition rate, changes in Government Policies and day to day running problems discouraged companies to open their Captive Unit.

The mushrooming of LPO’s had put the clients into a saga of disbelief. It had become very tough to settle down with third party vendors. It was inevitable that confidentiality would be bridged and exit policy was tough.

There was a need to find better ways for offshoring legal and paralegal services. The important key points of offshoring decisions include: - The reputation of the company, the non compromising attitude towards confidentiality, keeping control on the working and having cost savings. Law firms of UK / US were divided on off shoring and subsequently about the nature of services to be offshore. The mist had become so heavy whereby the answers could not be found for off shoring while keeping in mind the key points. There came the need of 2nd level outsourcing. The solution to these problems lies in attaining the benefits of Captive Unit at the price of Third Party vendors and this is required to be dealt with “aptly”.

Monday, January 18, 2010

Draft n Craft launches AptCaptive™: Level 2.0 of Legal Process Outsourcing

So much is talked about Legal Process Outsourcing (LPO) that we barely find any law-firm and corporation incognizant to the concept and its benefits. Despite this, there is reluctance towards outsourcing in general and offshore outsourcing in particular.

Traditionally, there are two popular modules of outsourcing the legal processes: first through Third Party Service Providers/Vendors (TPSP’s) and/or second by owning one’s Captive Unit in offshore locations. Though both are popular but one cannot rule out the risks and impediments associated with either.

 Perceptions on outsourcing legal work to vendors (TPSP’s)

Perceptions favoring:

1. No huge capital investments required.
2. Customized solutions.
3. Competitive pricing.
4. Flexibility to scale up and down business relationship.
5. Retains decision-making, therefore relationship with TPSP is clear (fee-based, quality-based).
6. As it is a contract based mutual agreement thereby there is more business commitment.
7. Ability to focus on core business issues.
8. No compromise in quality at cost effective rates.
9. Better process maturity, resource flexibility and economies of scale.
10. Flexibility in deploying new technology.
11. No requirement to hire additional personnel.
12. No legal or statutory compliance issues to set up a new unit.

Perceptions discouraging:
1. Risk of Confidentiality being at stake.
2. Risk of possible drop in quality standards.
3. Absence of processes to monitor metrics and possible timely intervention when issues are escalated.
4. Tight business margins.

 Perceptions on owning a Captive unitPerceptions favoring:

1. Maintenance of in-house confidentiality & quality.
2. Management and retention of control over risk profile, especially for critical business areas.
3. Development for global delivery models with centralized and standardized processes.
4. All investments made on people and infrastructure is completely retained.
5. Better control over processes, time lines & enhanced quality of operations.
6. Alignment of offshore initiatives with their culture & values.
7. Creation of robust technology infrastructure for greater efficiency and scalability of operations.

Perceptions discouraging:

1. Huge Capital Investments.
2. Recurring Costs.
3. Hassles of incorporating the captive unit offshore like India.
4. Exit impossible without incurring high costs.
5. Compulsion to keep absolute control over processes.
6. Legal Requirements to set-up captive unit, say in India:
i. Incorporation of the Company as a legal entity.
ii. Local registrations.
iii. Bank Accounts.
iv. Appointment of Company Secretaries & Auditors.
v RBI/Government Approvals.
vi. Ensuring legal and statutory compliances.
vii. Local taxation issues.
7. Human Resources requirements of captive center
i. Staffing .
ii. Training & Talent management.
iii. Hiring of Core Team.
iv. Employee retention.
8. Facilities & Infrastructure
i. Vendor Management & Negotiations.
ii. Hardware & Software Procurement Systems.
iii. Communications & Network Integrations.
iv. Acquisition and operationalizing of facilities.

With the aim to revolutionize the LPO paradigm, Draft n Craft has devised the “apt solution” destined to enrich legal outsourcing experience throughout the industry.



“The AptCaptive™ is an advanced Legal Off shoring model tailored and run as per client’s requirements by Draft n Craft, retaining all in-house benefits at reduced costs.”

For a long time, a desire was felt throughout the industry to transcend to new levels of Legal Process Outsourcing. Without doubt the AptCaptive™ is at present the lex epitome of the legal outsourcing industry. The module however is so ambitious that, in its initial stages Draft n Craft will be offering this to only a limited selected group of companies and law firms.

For any trade enquiries, contact info@draftncraft.com.

Tuesday, December 22, 2009

Legal Research Outsourcing: Our Means and Your Ends

video

Among the series of Webinars being hosted by Draft n Craft, Rajni Minhas, Assistant Legal Head, held a Webinar on Legal Research Outsourcing: Our means and your ends.

The purpose of this webinar was to question the paradigm shift in the needs, means and results of Legal Research in wake of integrating world. After holistically looking at the intricacies of the service, the webinar aims to understand and analyse the regulatory and ethical aspects of the same.

Topics Covered in the web cast were:

o Legal Research outsourcing Needs
o Multi jurisdiction research
o Legal Research tools & deliverables
o Memo Writing
o Ethical and Regulatory aspects of Legal Research outsourcing.
o Issues of Confidentiality and Quality
o Process Flow
o Pricing the Legal Research

Wednesday, December 16, 2009

Webinar on Outsourcing of Legal Transcription


video

This Webinar on outsourcing of Legal Transcription was conducted by Shweta Saini, Head- Marketing, Draft n Craft, on 20th Day of November 2009. The Webinar holistically looked at legal transcription as an important service and the web cast covered :
· Analysis of the ethical and regulatory aspects of Legal Transcription outsourcing.
· Drivers & Risks of legal transcription outsourcing.
· Errors and Omissions insurance coverage.
· Evaluating if there is actually any labor arbitrage possible given the associated risks and negative externalities?
· Evaluating the importance of Contract Excellence.
· Price considerations.
· Course of the work flow.
· Issues of Confidentiality and Quality
· Less Haste, More Speed
This recording of the webinar is a must view for attorneys, in-house Counsels, paralegals, LPO professionals, law students.

Tuesday, July 7, 2009

My Recent Seminar in London on Outsourcing : Is It a Threat to the Economy?

I am delighted to write about my first Seminar. The event was organized in the heart of the business hub, London, UK on the 11 of June, 2009. The topic, as you all were aware was “Outsourcing: Is it a threat to economy?” .The topic had triggered quiet curiosity in our participating delegates.

The day we landed in London, we heard about the tube strike there, would be a lie if I’d say that the news did not dampen my spirits, but as the D-Day came, things just went on as scheduled and planned.

I am extremely thankful to both my speakers Mr. Dai Davis, Partner at Leeds based Brooke North LLP and Mr.Bharat Vagadia, Chief Executive Officer and Consultant at Op2i Ltd, also a Board Director for the UK National Outsourcing Association (NOA). The event was flagged, after that is, by the inaugural speech by my company’s Legal Head, with a very interactive speech by Dai. I just can’t stop myself from appreciating Dai for the instant connect he developed with the audience. I am sure he got such inspired and involved audiences for himself that actually set the pace for our event further. His speech elaborated on the pros and cons of the outsourcing industry in general and followed on to the legal outsourcing industry in particular. I am sure he had the good rate of converting the cons to the eventual pros in the minds of the audiences, that is. Next was a tea and a coffee break, which more than high tea meant great networking opportunity for all the delegates. Danish pastries were great though. Then the event proceeded with Mr. Bharat Vagadia’s speech. I was extremely delighted to have two such wonderful speakers on my panel, wherein one created such pace for the event and the other actually shared his research report with us. The booklet circulated by
Mr. Vagadia amongst the audience was actually the “Outsourcing Survey Report” 2008, conducted by his company in association with others. The report gave a great insight into the outsourcing industry and I am very sure that it will be well treasured by all receiving it.
The event proceeded with my presentation, though a concise one but I tried to elicit and counter the myths regarding the outsourcing as a concept and the industry as a whole.

The day ended with more networking. This was such a significant, inspiring and positive endeavor that it has given me that zeal to plan yet another such event in the near future.

Thursday, March 19, 2009

OUTSOURCING - A CAUSE FOR LAY OFFS ?

I remember a woodcutter cutting the branch on which he was sitting. It was really the most foolish act one could think of. Nobody shuns one’s source of existence. In case I am working on a project which is very dear to me then I shall find it hard to share it with anyone else. No doubt, the human psychology always guides people to restrain them from doing any act which is not conducive to their interests.

An old man has beautifully said the hand on the latch of main door controls the outward and inward flow of technology services, jobs, opportunities etc. the decisions which are warranted due to compulsions are not good howsoever economical they may be. The growth of Legal Process Outsourcing industry had put a big question mark on the quantum of outsourcing by solicitor firms. Critic to the LPO raised the issue backed the law firms involved in outsourcing will end up in outsourcing their lawyers out of the firm. They started projecting that it will create a big unemployment in highly skilled and respectable profession of lawyers. On the other hand, outsourcing professionals viewed it differently and claimed it merely as a part of globalisation and win win situation for the providers and outsourcing people. According to them, Legal Process Outsourcing has become necessary and natural due to the different variables of two places and countries.

The outsourcing can be commoditized and compare with different outlooks. An economist might compare it with the usual role of demand and supply. In thermodynamics we describe the flow of energy from one place to another depending upon the variable temperature. The Legal Process Outsourcing had begun with the outsourcing of transcription work similar work had commenced with medical transcription. Slowly medical transcription had grown beyond outsourcing of audio files. The Legal Process Outsourcing has also starting shattering the thin line of outsourcing legal transcription in the beginning. The service industry of developed countries like UK, US found a big support in the growth of Legal Process Outsourcing.

I personally believe lay offs from the law firms were primarily due to their inability to match up the expenses and receipts. They have been charging good amount from the clients and in turn paying solicitors a good amount. As people chose to get the same services at lower rates, the receipt of the solicitor firms fell down and in turn lay off started. Nobody thought of reducing the salaries instead of preferring lay offs. One can easily view; the solicitors already into outsourcing were more capable to match up the receipts and expenditures. Apparently, lay offs are not the result of outsourcing but the net results of fall in profits. A growing organisation cannot lay off people. The misconception spread amongst people needs to be set right. In case of solicitor firms outsourcing works in no way curb them from taking more work. Statistics are clear if a solicitor firm charges US$300 per hour from its clients for a contract review and accordingly pays US$150 to its in-house solicitor. There is a good margin but the same diminishes if the client is able to get the work done from another solicitor firm in half of the rates. But the truth lies in the fact that in case the solicitor firm outsources the work of contract review and the price of US$50 and the in-house solicitor simply vets the work received from the service provider. The client would be happy to pay the US$150 to the firm. In a way firm will also gain by cutting down the cost and marginally passing the benefit to the client.