Ride the Lightning

RIVERS OF RUPEES: OUTSOURCING ELECTRONIC DISCOVERY REVIEW

April 9, 2008

Mind you, it isn’t just India, though India has leveraged the cost of e-discovery review in the U.S. into a very comfortable living for many of its lawyers. Is it any wonder that news reports yesterday indicated that associates in Indian law firms have seen their salaries rise by 50% in one year?

Even so, Indian lawyers are a bargain, generally charging something like $60 an hour for legal services. The lawyers themselves take home $6,000-$30,000 annually, a far cry from the typical $225/hour associate taking home in excess of $160,000 annually.

Forrester Research has projected the offshoring of 29,000 legal jobs by the end of 2008 and as many as 79,000 by 2015. Mindcrest Legal Outsourcing, headquartered in Chicago, hired 390 lawyers in India last year alone and 75% of them are working for FORTUNE 500 companies.

Is outsourced data secure? That’s an open question, but great strides have been made in security. Often, data is not stored locally at all – the lawyers work directly on the client’s server over a secure line. There is often biometric access to the facilities, camera monitoring and computers without disk drives, usable USB ports or CD burners and without printing capability. In some facilities, guards even search attorneys’ belongings to make sure they are not carrying flash drives or laptops.

Document review is often priced per page, at about $1.00 per page (versus $7-$10 per page in the U.S.). TransUnion, a Chicago company, says it paid less than $10 per hour for reviewing a million e-mails in electronic discovery, which would it said would cost $60-$85 per hour in the U.S.

What hasn’t happened yet, but inevitably will, is a major security breach. Will it slow the outsourcing juggernaut? That remains to be seen. But it is wise to bear in mind that India (and other countries commonly used to provide outsourced legal services) does not have the same ethical constraints that exist in the U.S., nor the same privacy and data breach laws. So when the proverbial horse is out of the barn, recourse may be dicey – and has the attorney managing the outsourcing exercised due diligence throughout?

Don’t know about you, but it would give me the willies.

The article which gave rise to this post may be found at http://www.time.com/time/magazine/article/0,9171,1727726,00.html

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