Outsourcing Worries Australian InHouse Counsel

Posted by law fuel editors, on Jan 26
Outsourcing’ may be a buzz word among law firm managers, but a report from The Australian shows that while initially appealing, many inhouse counsel are worried about quality issues with the outsourcing trend.
Australian multi-million-dollar buyers of legal services, the general counsel, are interested in the growing global trend for law firms to outsource their lower-end legal work to low-cost countries like India but are concerned about quality and confidentiality.
While Australian firms lag behind countries like Britain and the US in its use of low-cost legal processing centres in places like India and The Philippines, some are making strides to catch up with Mallesons Stephen Jaques and new arrivals Clifford Chance and Allen & Overy, who are all outsourcing legal work overseas to some degree.
The cost savings for clients is significant — as high as 50 per cent — but some corporate counsel say they are more concerned about the quality, confidentiality and the possibility of conflicts than bottom-line savings from sending legal work offshore.
AMP general counsel Brian Salter, however, is enthusiastic about using offshore legal processing centres and has made it a condition upon firms wanting to be on the AMP legal panel that they have an offshore-processing strategy.
He said he had been in talks with his panel firms for “some time” about using offshore centres. “We think it provides opportunities for law firms to be able to re-engineer their business,” he said.
“It can lower their costs basis and provide efficient and higher-quality service to their clients.
“It can only be of benefit to the clients. “From the perspective of the private law firms, it gives them the opportunity to introduce efficiencies