A Passage to India

If the frequency of media reports is any indication, then outsourcing legal work to India is starting to reach a tipping point. The latest article appeared in today's Wall Street Journal. Last week, I did a post on the growth of patent outsourcing.

The ABA just addressed the issue this past summer with an ethics opinion that seems to open the door for an increase in work being sent to India (and other less expensive jurisdictions). And clearly the market conditions are ripe for cutting legal expenses at corporations.

I must confess that when I first learned about this idea several years ago, I found it somewhat upsetting to think that good white collar jobs were no longer safe from the fate that has befallen manufacturing jobs in this country. As I have gotten used to the concept and now realize that it is simply another manifestation of globalization, I am starting to see how the trend may actually be a big help to smaller law firms that want to keep a low overhead but still have an ability to handle document intensive work. While it is quaint to think that the law is a profession that is immune from global forces, that is unrealistic. Firms that understand this and learn how to take advantage of the opportunities presented by outsourcing, will only thrive.

Keep Asking Questions

In my latest article in Massachusetts Lawyers Weekly (In Making a Lateral Move, Look Before You Leap ), I have addressed some of the important questions that you should be asking yourself before contemplating a lateral move.

As it turns out, asking a lot of questions (at least about firm finances), is not something that most partners have done in the past; but that seems to be changing as more firms are failing.

Lawyers Wanted: Abroad

While the market for corporate associates may be very weak right now in the United States, demand for top corporate talent remains strong in Dubai, Abu Dhabi and Hong Kong. That according to the New York Times (free subscription required).

Patent Services Outsourcing to India Hits $46 Million

This is only the latest in a long series of articles that I have seen in the NLJ over the past several years. Clearly this presents a threat to U.S. law firms and patent lawyers. But it also represents a tremendous opportunity.

Non-equity Partners Asked to Pony Up

The National Law Journal reports today that DLA Piper may be asking non-equity partners to make a capital contribution to the firm. In return says Frank Burch, DLA Joint Chief Executive Officer, they will get a limited stake in the firm's profits.

Traditionally, non-equity partners are paid a salary and don't get to share in the profits. This move, which is yet another sign that things are changing quickly in the legal profession, is an effort to reduce the firm's reliance on bank financing. Keeping debt low through larger capital contributions is nothing new. There are a number of AmLaw firms that already manage themselves with this philosophy. What is new here is trying to spread the burden to a lower tier of partner. While DLA says the move is preemptive (i.e. they still enjoy relatively favorable interest terms in the credit markets) I suspect other firms will follow if credit remains tight for the next year.

How Are You Surviving the Legal Recession?

The ABA wants to know. Click here to participate in a survey being conducted by the ABA Journal.

A Renewed Push for Fixed-Fee Billing Arrangements?

Alternative billing arrangements are hardly a new concept. In many ways, fixed-fee billing is actually a retro concept. Fifty years ago, lawyers were not slaves to the billable hour.

Fixed-fee arrangements have been trying to make a comeback for over a decade. At the same time, there have been many efforts to create new forms of billing that reward firms for success. I remember organizing a CLE program, Beyond the Billable Hour, in the mid 90's. But the current financial crisis seems to be creating a renewed push by corporate counsel to get law firms to move away from open ended hourly billing arrangements.

We are in a period of crisis in the legal profession. Deal flow is constricted and litigation has not picked up enough to offset the loss of deal related business. In the coming year, this means that clients will have more leverage. Law firms that are able to adapt to this new reality and offer creative billing arrangements will be the winners.

IMHO, everyone will be happier when firms start to move away from the billable hour. Law firms will be rewarded for efficiency and associates will feel less pressure to record 200 billable hours in a month. Until that happens, though, we are in for a rough ride. Maybe a new wave of financial regulation will help fill in the missing hours at some AmLaw 100/200 firms. Maybe the litigation boom will arrive as companies and individuals scramble to recoup their investment losses. Smart firms will be properly positioned to capture this work. But in order to survive during this recession, firms will need to carefully review their expenses and come up with creative ways to satisfy their cost conscious clients.

The Morning After for Campaign Junkies

One of the best ways to enhance your law practice is to find an interest that connects you with a lot of other people (particularly individuals who are potential clients and referral sources). But what if your passion was the Presidential campaign of 2008?

For the past two years, I have been pouring over polling data, reading political blogs, sharing political humor with friends and colleagues (at least the ones who share my political beliefs) and generally engaging in a lot of political discussions. But as the Wall Street Journal reports today (subscription required), political junkies like myself must now find other ways to feed our addictions.

For a while, there will be opportunities to speculate about the election and understand what were the key factors that lead to Barack Obama's historic victory. But there is now a void in my life that I will have to fill.

Would I have been better off if my passion was something timeless like playing golf or collecting wine? Only if those were truly my passions. And since I've never played anything but miniature golf and I only drink wine on Passover, I would have been making a critical mistake.

The best way to succeed in life is to pursue those things that truly interest you. So now, I'm looking for a new interest. If anyone has any suggestions on how I can now fill the countless hours that I spent on political websites, I am open to suggestions. In the meantime, I will revel in the news that for the first time in history, the United States elected an African American to the office of President of the United States. WOW!