Below The Beltway

Today’s Washington Post reports on the increasing use of outsourcing in the legal profession:

GURGAON, India — When Aashish Sharma graduated from law school two years ago, his father had visions of seeing him argue in an Indian court and eventually become an honorable judge.

Instead, Sharma, 25, now sits all day in front of a computer in a plush, air-conditioned suburban office doing litigation research and drafting legal contracts for U.S. companies and law firms. He is part of a booming new outsourcing industry in India that employs thousands of English-speaking lawyers such as him to do legal work at a small fraction of the cost of hiring American lawyers.

“It is much better than going to court in India and dealing with all kinds of rough people. Working in legal outsourcing is a happy career move for me, although my father does not fully understand what I am doing here after my education in Indian law,” said Sharma, who began working in February for an outsourcing company called Quatrro. “I am getting valuable exposure to the American judicial system, corporate law and their way of working.”

Legal process outsourcing is being called the next big thing in Indian business. It marks India’s climb up the chain of outsourcing jobs — from low-end, back-office service functions in call centers to high-value, skilled legal work.

In the past three years, the legal outsourcing industry here has grown about 60 percent annually. According to a report by research firm ValueNotes, the industry will employ about 24,000 people and earn revenue of $640 million by 2010.

Indian workers who once helped with legal transcription now offer services that include research, litigation support, document discovery and review, drafting of contracts and patent writing. The industry offers an attractive career path for many of the 300,000 Indians who enroll in law schools every year. India and the United States share a common-law legal system rooted in Britain’s, and both conduct proceedings in English.

This development has positive benefits both for American law firms, and their clients:

“Ninety percent of a lawyer’s work is legal research and drafting, and all this can now be offshored to India,” said Russell Smith, who worked in a Manhattan law firm called SmithDehn before moving to India to set up an outsourcing company in 2006. “A large portion of our fees in the U.S. is because of office rent. It is often a big decision to hire one attorney in the U.S. In India, we can hire 10 at a time and train them all at once.”

Smith’s Indian company, SDD Global Solutions, handled much of the legal work for the film “Borat.” Other clients include the Washington-based firm Appleton & Associates and U.S. movie studios and television networks.

“My people in India can do everything from here, except sign the opinion letter and appear in an American court,” he said.

Smith’s Indian office recently researched and drafted the motion papers for the dismissal of a libel case against the producers of HBO’s “Da Ali G Show.” Smith said that if it had not been for the cheaper option of outsourcing, the producers would have settled.

So it saves the client money, and it saves the American lawyer the time of having to do work that, in some cases, doesn’t really need to be done by a lawyer to begin with. In other words, legal outsourcing is really just a long distance version of having a paralegal.

Services like this are only bound to become more common as time goes on, although it would be difficult for a nation like China, where differences in the language and legal system are quite apparent, to compete in this arena as well as nation’s like India can.

Nonethless, the next contract you sign could have been drafted by someone in Bangalore.

Welcome to the connected world, fellow members of the bar.