Eversheds has struck a deal to outsource low-end legal work to
India.
The firm has signed a contract with a third-party provider to outsource small commercial contracts that are too expensive to carry out in the UK or in-house.
The initiative, the result of a review led by commercial group head Jonathan Guest, will initially allow the firm to offer cheaper rates for low-end volume work such as commercial contracts.
However, the scheme could be expanded to cover larger scale work such as due diligence.
Guest said: “Clients like the concept [of outsourcing work] but want someone to establish the process and provide verification. From our perspective we are bringing a solution to a perceived client need - we will hopefully be introduced to new clients through this and it will lead the way for the firm to act for them on larger scale work.”
The move comes after Eversheds announced plans earlier this year to increase the amount of legal work sent to alliance firms such as South Africa’s Routledge Modise.
The Johannesburg firm, which will take on tasks including due diligence, drafting and document checking, is seen as an especially lucrative partner because, in addition to the low cost-base, the country has a similar legal system and native English-speaking lawyers.
Eversheds’ outsourcing initiative comes as Clifford Chance (CC) plans to expand its Delhi offshore centre to 300 staff by the end of April next year.
The firm is also planning to increase the amount of legal work carried out in India by upping the number of paralegals there.
The centre currently houses 13 paralegals but that should increase to 20 by the end of 2008.
The team supports practice areas including litigation and capital markets by covering routine tasks such as research, document review, database creation and proofreading.
The offshore centre, which launched in September last year and currently has 110 support staff, is already helping CC to save around £8m each year through the finance and IT services it performs.
CC managing partner David Childs said: “Using paralegals in India allows us to reduce our chargeout rates to clients for paralegal services – generally it will not save costs for the firm.”
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Eversheds on the Legal Week Wiki
Due diligence... clients hate paying for it, trainees and associates hate doing it, so outsourcing would appear to be a 'win-win' solution. But is it really? Will the entities undertaking the due diligence be in a position to truly understand the reason why the exercise is being done and what the key areas of concern are for the client? Will they be 'adequately supervised'? (not that all UK DD is of course); will the DD be truly meaningful? (again, not that all UK DD is of course) Will the outsourcing firm (in this case Eversheds) be liable for the DD (I would suspect not on the usual 'we didn't do the work' basis), and if the firm is not to be liable for the DD, will the entity who has undertaken such work (who will presumably be liable for the work they undertake) be sufficiently robust to withstand claims? Please oh please tell me someone isn't doing this through a thin cap SPV! If the entity is to be liable, and does have sufficient assets, will the outsourcing firm be telling the clients about the challenges they may face in making a claim against the entity doing the DD? Lastly, will clients be as happy with outsourced legal work (whether DD or standard commercial contracts) as many people have been with outsourced call centres?
Incredulous. It will not work and will collapse with dire consequences. Clients should be bold and give Eversheds an ultimatum - do it at a reasonable cost or they will get a cheaper firm that is just as good to do the work. Get real Eversheds
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