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US Law-Firms now outsourcing to India
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First it was call centers, software development and medical transcription. Now an Orange County company wants to outsource to India what some might think unmovable: legal work.
Irvine-based The Legal Outsource, which started in February and has about 10 workers, is tapping lawyers in India to handle basic legal work. The lure: fees for legal services that are much lower than in the U.S.

The company has lined up a handful of customers in the past several weeks and hopes to go after small and midsize law firms that are firms looking to cut costs. Outsourcing legal work to India isn’t as extreme as it sounds, company officials said.

India uses a similar English common-law based legal system that lawyers work under in the U.S. And there’s no language barrier since lawyers in India typically speak English. “(The opportunity is) enormous because it’s so new,” said Jim Cranston, managing partner at The Legal Outsource.

The number of legal jobs being outsourced is expected to increase from 6,000 in 2003 to 29,000 in 2010, according to a 2004 report by Forrester Research Inc. in Cambridge, Mass.

Law firms have outsourced legal work—but mainly to other companies in the U.S. Outsourcing legal work to India is the next logical step, Cranston said. Moving work to India and other countries with highly educated—but relatively low wage earning— workers has helped American businesses cut costs and remain competitive.

Cranston is the former director of business development for Pillsbury, Winthrop, Shaw, Pittman LLP, one of the country’s largest law firms. He worked with Pillsbury lawyers who were helping the law firm’s clients outsource. Before joining Pillsbury, Cranston was the director of business development for Arthur Andersen LLP’s outsourcing practice. The Legal Outsource’s projects could include litigation research or writing up a motion. Cranston said the company plans to tap “more than four” of the top law firms in India to handle the work.

An OC-based team that includes paralegals and a lawyer guides the outsourcing projects and reviews the work before it’s sent back to clients. The Legal Outsource’s hourly charges:

  • Paralegal services: $25 per hour to $40 per hour.
  • Associate level lawyer: $50 per hour to $75 per hour.
  • Partner-level lawyer: $100 per hour to $125 per hour.
Those prices are lower than the rates lawyers would charge for the same services in the U.S.

Outsourcing isn’t just about cutting costs, Cranston said. Law firms tapping The Legal Outsource free up time for lawyers to go after work they couldn’t do otherwise— especially for small and midsize law firms, he said.

A local lawyer, who declined to reveal his name or law firm, said he’s an early customer of The Legal Outsource. He’s been offshoring paralegal services, but is looking eventually to move attorney-level work to India.

“I think it’s the wave of the future,” the lawyer said.

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