Effective Legal Outsourcing Through Captive Centers

December 17, 2008

By Clairvolex Research Team

Legal Outsourcing is no longer a dirty little secret. An article by Julie Kay in the National Law Journal while elucidating on the offshore legal outsourcing industry points out that outsourcing has now acquired a more commonplace occurrence and the days when there were few admissions about outsourcing legal work to India are now a thing of the past. Another issue which runs coterminous is the alleviation of concerns associated with legal outsourcing. The Article refers to several quotes from stakeholders which seem to colour the answer in negative. Many concerns such as how to maintain quality control, keep client information confidential, supervise lawyers on offshore locations are still looming large and not the least, the recent terrorist attacks in Mumbai have also found place due to business continuity concerns i.e. interruption of data or operations. A view by a stake holder is rather candid that there are concerns about quality control, protecting attorney-client privilege and taking responsibility for any mistake made.

But all this, as one can read in the article, has not led to the suppression of the idea of outsourcing. Besides the allure of the cost arbitrage, the recent favourable bar ethics opinions from the San Diego Bar Association in 2007, the Florida Bar in January 2008, the North Carolina State Bar in April 2008 and the American Bar Association in August 2008 (All stated that outsourcing is allowed, provided certain requirements are met, including that the client is notified and the foreign lawyers are supervised by U.S. lawyers) are proving worthwhile enough to minimize the concerns and one solution which, the article seems to be trying to showcase, is the idea of formation of captive centers at offshore locations.

Captive centers, in comparison with LPOs, supposedly would deal effectively with concerns related to controlling the work-product, the confidentiality of client data in a remote facility, the quality of work being done and the ability to adequately supervise large group of Indian lawyers. In the same vein Third Party Niche Service Providers may also form an effective alternative to captive centers. Another feature to the road map is bringing in quality assurance through certification and training programmes.

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