Archive for the ‘outsourcing’ Category
Wednesday, April 21st, 2010 by admin
With the huge layoffs in major employment sectors such as IT, Accounting and Legal (to name just a few), our Federal government has to step in and correct the trade imbalance with lower wage, emerging nations (e.g. India). As it stands now we are stripping out all of our middle class jobs and packing them off to India.
The best way, I believe, to tackle this problem is to add a value added tax to all services performed by American companies in foreign nations. Thus all hourly service fees, manufactured goods, and other work product would be subject to a corrective VAT. This could be pegged to the currency rates of each country’s currency versus the dollar or could be a flat fee applied across the board.
The only way to prevent outsourcing of American work overseas is to level the playing field. Emerging nations have no incentive to impair their citizens’ ability to find work (unlike our nation) and thus we have to take corrective action in order to save our way of life and standard of living. Otherwise, we will continue to wipe out the American Middle Class and leave only a precarious few at the top, some with decent paying government jobs and the rest scrapping around to make do, paycheck to paycheck.
Instead of levying taxes on domestically produced products, it’s time to tax the offshore and outsourced production and allow American taxpayers to keep working and retain their standard of living. As it stands now, the lure of lower wages, the absence of OSHA, anti-discrimination, environmental and labor law is too strong. Each day brings more news of another company outsourcing its labor force to India, China or another low wage, sweatshop nation. If we do not do something, then all of our efforts at reducing pollution, establishing regulations and laws to protect workers and the environment will be rendered pointless.
This would certainly bring a lot of chatter to international circles, including the WTO. But in the end, maybe it is time to abandon such organizations if they are one sided arrangements that constitute a gutting our middle class and destroying our way of life.
If, as the outsourcing apologists contend, that outsourcing increases employment here in the United States, please point me to all of the jobs that outsourcing has created. I will happily post any such information here. Of course no one will reply, as many, many more jobs have been lost due to outsourcing than will ever be created stateside. Workers retrain at great expense only to find their new career to be outsourced as well.
Tags: Value Added Tax, VAT
Posted in ABA, ABA Formal Opinion 08-451, India, Indian Attorneys, offshoring, outsourcing, outsourcing law practice | No Comments »
Tuesday, April 20th, 2010 by admin
 In a scathing article entitled, “The Offshore Outsourcing of American Jobs: A Greater Threat Than Terrorism” Dr. Craig Paul Roberts lambastes the Corporate American whitewashing of the disastrous effects of outsourcing. A few clips,
In what might be an underestimate, a University of California study concludes that 14 million white-collar jobs are vulnerable to being outsourced offshore. These are not only call-center operators, customer service and back-office jobs, but also information technology, accounting, architecture, advanced engineering design, news reporting, stock analysis, and medical and legal services. The authors note that these are the jobs of the American Dream, the jobs of upward mobility that generate the bulk of the tax revenues that fund our education, health, infrastructure, and social security systems.
The loss of these jobs “is fool’s gold for companies.” Corporate America’s short-term mentality, stemming from bonuses tied to quarterly results, is causing US companies to lose not only their best employees-their human capital-but also the consumers who buy their products. Employees displaced by foreigners and left unemployed or in lower paid work have a reduced presence in the consumer market. They provide fewer retirement savings for new investment.
Nothink economists assume that new, better jobs are on the way for displaced Americans, but no economists can identify these jobs. The authors point out that “the track record for the re-employment of displaced US workers is abysmal: “The Department of Labor reports that more than one in three workers who are displaced remains unemployed, and many of those who are lucky enough to find jobs take major pay cuts. Many former manufacturing workers who were displaced a decade ago because of manufacturing that went offshore took training courses and found jobs in the information technology sector. They are now facing the unenviable situation of having their second career disappear overseas.”
He continues,
Outsourcing forces Americans to “compete head-to-head with foreign workers” by “undermining US workers’ primary competitive advantage over foreign workers: their physical presence in the US” and “by providing those overseas workers with the same technologies.”
The result is a lose-lose situation for American employees, American businesses, and the American government. Outsourcing has brought about record unemployment in engineering fields and a major drop in university enrollments in technical and scientific disciplines. Even many of the remaining jobs are being filled by lower paid foreigners brought in on H-1b and L-1 visas. American employees are discharged after being forced to train their foreign replacements.
The author then details how outsourcing is causing the destruction of our middle class and dropping our nation from first to third world status. Exporting our technology also creates a national security risk. The upshot of the article is that the outsourcing of our economy is having disastrous effects here in America. Of course, anyone that has had their job outsourced already knows this.
Tags: ABA, American Bar Association, lpo, offshoring risks, outsourcing, outsourcing downside
Posted in ABA Formal Opinion 08-451, China, India, legal process outsourcing, offshoring, outsourcing, outsourcing law practice | No Comments »
Tuesday, April 20th, 2010 by admin
Symantec’s 2009 Internet Security Threat Report reveals serious vulnerabilities in the growing outsourcing industry. From the April, 2010 Executive Summary, India is seeing a major uptick in malicious activity,
India also experienced a surge in malicious activity in 2009, moving from 11th for overall malicious
activity in 2008 to fifth in this period. In 2009, India also accounted for 15 percent of all malicious activity in the Asia-Pacific/Japan (APJ) region, an increase from 10 percent in 2008. For specific categories of measurement in the APJ region, India increased rank in malicious code, spam zombies and phishing hosts from 2008. Its high ranking in spam zombies also contributed to India being the third highest country of spam origin globally. Malicious activity tends to increase in countries experiencing rapid growth in broadband infrastructure and connectivity, and the level of malicious activity occurring in India has been increasing steadily over several reporting periods as its broadband infrastructure and user base grows.
This is a serious threat, that could wreak havoc upon the entire Indian outsourcing enterprise. From an article in the UK edition of CIO,
“The whole shift to outsourcing and offshoring is [potentially] exposed because “these countries are” not up to speed on, or don’t place the same emphasis on, security,” said Kevin Hogan, Symantec senior director of global security response operations, noting that India was 11th most likely source of malware in 2008 and is now fifth in the rankings.
It’s nice to see some objective, critical information being reported, rather the relentless shilling and hucksterism we so often have to endure. Detailed, objective reports by companies like Symantec should be taken seriously and factored into the cost benefit analysis one should perform before outsourcing. It’s not just about saving x dollars per hour on the cost of contract attorneys, there are many more hidden dangers and costs associated with conducting business in the emerging markets (including India) around the world than performing the same work stateside (or “backshore”).
Hopefully this will be the beginning of a more realistic dialogue about outsourcing, including its inherent risks and weaknesses.
Tags: American Bar Association, offshoring problems, offshoring risks, offshoring security, outsourcing, outsourcing downside, outsourcing risks
Posted in ABA, ABA Formal Opinion 08-451, India, offshoring, outsourcing | No Comments »
Saturday, April 17th, 2010 by admin
See this rather disturbing article (with pictures) regarding conditions at KYE’s Dongguan, China factory. Microsoft’s products represent about thirty per cent of this factory’s output. The products made in this factory are largely exported to the United States.
Tags: outsourcing
Posted in China, microsoft, offshoring, outsourcing, sweatshop | No Comments »
Thursday, April 15th, 2010 by admin
There are some interesting reactions in the Blogosphere to the ABA’s call for comments in regard to its formation of an official outsourcing policy.
First, from Kimberly Alderman over at Lawyer On!, compares contract attorneys to freedom fighters. The ABA’s request for comments, she notes, conveniently leaves us out of the equation.
Next, the National Association of Feelance Legal Professionals has a great post summarizing this snub. As a side note, this might be a good organization to join.
Lastly, Tom the Temp, also has a riff on the ABA’s call for questions.
In my opinion, this appears to be a deliberately crafted omission of contract attorneys, the group most affected by the ABA’s current policies on outsourcing. What the ABA really wants to know is how much money can be saved by large corporations and how it will ultimately affect Biglaw.
We are just the overflow workers who have zero voice or say in the matter. As some have called us, we are the “Mud People” of the law; nameless, faceless, anonymous drones who are permitted no opinion or participation. To the ABA we obviously don’t count for much.
Tags: ABA, American Bar Association, law practice, lpo, outsourcing
Posted in ABA, ABA Formal Opinion 08-451, American Bar Association, India, document review, legal process outsourcing, lpo, offshoring, outsourcing, outsourcing law practice | No Comments »
Monday, April 12th, 2010 by admin
Robert Reich authored a piece in today’s Wall Street Journal in which he concludes that outsourcing is having a devastating effect on our economy. He states,
The Great Recession has accelerated a structural shift in the economy that had been slowly building for years. Companies have used the downturn to aggressively trim payrolls, making cuts they’ve been reluctant to make before. Outsourcing abroad has increased dramatically. Companies have discovered that new software and computer technologies have made many workers in Asia and Latin America almost as productive as Americans, and that the Internet allows far more work to be efficiently moved to another country without loss of control.
Companies have also cut costs by substituting more computerized equipment for labor. They’ve made greater use of numerically controlled machine tools, robotics and a wide range of office software.
He continues,
The only way many of today’s jobless are likely to retain their jobs or get new ones is by settling for much lower wages and benefits. The official unemployment numbers hide the extent to which American workers are already on this downward path. But if you look at income data you’ll see the drop.
Among those with jobs, more and more have accepted lower pay and benefits as a condition for keeping them. Or they have lost higher-paying jobs and are now in new ones that pay less. Or new hires are paid far lower wages than the old. (In January, Ford Motor Co. announced that it would add 1,200 jobs at its Chicago assembly plant but didn’t trumpet that the new workers will be paid half of what current workers were paid when they began.) Or they have become consultants or temporary workers whose pay is unsteady and benefits nonexistent.
All in all, a rather grim future of falling wages, increased workplace instability and global competition will continue to drive down pay and benefits for private sector workers. These same workers will be subject to increased taxation to pay for state and federal programs, which are already collapsing.
Tags: ABA, lpo, outsourcing, temporary employment
Posted in ABA Formal Opinion 08-451, American Bar Association, India, document review, job growth, outsourcing | No Comments »
Monday, April 12th, 2010 by admin
Our friends over at Global Legal (outsourcing consultants) are offering an “Outsourcing Bootcamp” for American and U.K. legal practitioners. This event is priced at decidely first world rates. From their blog,
Registration
The early bird registration deadline has been extended! Delegates who register and pay by April 23rd will receive the discounted rate of $1,575. The regular fee of $1,895 applies thereafter.
Don’t delay: A business visa for India may take several weeks to process. Register today online or contact
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
for further information.
Not only do you have to arrange for your own airfare and visas, it appears you have to pay for your own lodging as well. It seems like a rather expensive gambit just to learn how to send document review to India.
Couldn’t they just hold this conference over the Internet, for say $5 per hour? They must take UK and American lawyers for suckers!
Tags: ABA, American Bar Association, law practice, lpo, outsourcing
Posted in ABA Formal Opinion 08-451, India, document review, e-discovery, legal process outsourcing, lpo, offshoring, outsourcing, outsourcing law practice | No Comments »
Monday, April 12th, 2010 by admin
In the April 16, 2010 issue of the Canadian publication Lawyers Weekly is an article entitled, “Here Comes the LPO Tsunami”, by Jordan Furlong. This general thrust of this article is that the Legal Process Outsourcing (LPO) business model will be far more prevalent than perhaps many lawyers currently realize. The LPO push will be similar to the BPO (Business Process Outsourcing) shift that took place in 1980s Corporate America.
Law firms are sitting ducks, as their business models are outdated, inefficient and far too costly. For example, the article posits Indian attorneys can perform much of the same work as untrained U.S. licensed associates for about 85 per cent less. A major frustration with general counsels has been that they feel they should not be obligated to pay for the training of a never ending stream of first year associates, billed out at hundreds of dollars per hour and providing little added value to their clients. They serve only to enrich themselves with fat salaries and padding the firms profits per partner.
I would encourage anyone in law school now or thinking about assuming large quantities of debt in law school to read this article. The legal industry (profession to some) is undergoing rapid, evolutionary change.
It is yet another warning that legal services are undergoing commoditization and massive, worldwide divsion of labor. The cat is out of the bag, legal work is for the most part, routine and uncomplicated. What it does require is focus and attention to detail, akin to that of an assembly line worker. Anyone that has worked on a document review knows this.
Much like the old time automobile (or countless other industries) factory workers, today’s lawyers face a massive restructuring and globalization (offshoring and outsourcing) of their profession. “Biglaw” firms will continue to contract, shedding non-performing, redundant staff that can be hired elsewhere around the globe more cheaply. Only the most complex, sophisticated and confidential matters will be retained exclusively in the large law firms. General counsels will continue to chip away at the bottom line eroding biglaw profits and influence. What will emerge is yet to be known, as the evolution of the legal industry is just beginning.
What does this mean for contract attorneys? It would seem that this is largely bad news for the monline document reviewer. Much of your work is already being sent overseas or performed here at cut rate prices in low cost jurisdictions. For those with more substantive experience, there will initially be more opportunity to work as contract attorneys, doing work that associates used to do. The downside is that this will be at reduced prices and without any bonus participation. So while the contract attorneys are pulling all nighters and grinding long hours like they did as associates, they will just be used up and sent packing when the case is resolved. Partners, as always, will continue to call all of the shots and reap all of the rewards. But their profits will erode as the the general counsels use LPOs and other legal services firms, shifting client money away from biglaw.
Tags: American Bar Association, lpo, outsourcing
Posted in ABA Formal Opinion 08-451, India, contract attorney, document review, e-discovery, law firms, legal process outsourcing, lpo, offshoring, outsourcing, outsourcing law practice | No Comments »
Monday, March 22nd, 2010 by admin
I’m just going to publish this press release as is, as quite frankly I’m speechless.
In January, the Florida Bar Ethics Committee was the first in the nation to release an opinion in support of Legal Process Outsourcing (LPO), a practice in which companies and law firms employ offshore legal support services. Last week, the group continued its endorsement by holding a one-day conference to address LPO issues for all interested attorneys and law firms.
The conference, entitled ”Legal Process Outsourcing in India – What You Need to Know About Who, How, Why, and Why Not,” was held at the Hyatt Regency Orlando International Airport on November 14 and featured Clutch Group, a leading global legal solutions company with offices in Washington DC, New York, Chicago, Cleveland, and Bangalore.
“The Florida Bar International Law Section and the South Asian Bar Association of Florida (SABA Florida) developed this seminar to enlighten and educate legal professionals about all aspects of legal process outsourcing and how it may affect the future of the legal industry in Florida,” said Rahul Ranadive, SABA Florida CLE coordinator and program co-chair. “Whether or not clients and lawyers ultimately choose to take advantage of LPO services, we designed this seminar to help them explore the possibilities that LPO offers and explain why it is growing so quickly.”
Many law firms are turning to offshoring legal services in light of the weakening economy and increased litigation, and outsourcing large document review and due diligence projects can save companies a significant amount of money while maximizing efficiency. Still, some are concerned about questions of quality and ethics, two topics discussed at length during last week’s seminar.
Clutch Group President Paul Mandell delivered the closing keynote address at the event and participated in a panel that discussed ethical considerations in the industry and the future of LPO.
“Especially in these tough economic times, we believe LPO will be a key factor in transforming how law firms can tackle litigation without breaking the bank and without sacrificing quality,” Mandell said. “This conference effectively described legal outsourcing best practices, as well as addressed the concerns of those who are learning about LPO.”
About Clutch Group
Clutch Group is a global provider of legal support services, with expertise in cost-effective litigation document review, compliance, commercial lease abstraction, contract management, and legal research services, to Fortune 500 clients and leading global law firms. The company was recently ranked the #1 Legal Process Outsourcing (LPO) firm worldwide for 2008 by The Black Book of Outsourcing. Clutch Group’s workforce comprises more than 300 attorneys and paralegals across the United States and India. The company is led by a team with demonstrated legal expertise, extensive domestic and offshore outsourcing experience, and superior law firm management skills.
Tags: ABA, American Bar Association, lpo, outsourcing
Posted in ABA, ABA Formal Opinion 08-451, American Bar Association, clutch group, florida bar, legal process outsourcing, lpo, outsourcing, outsourcing law practice | No Comments »
Monday, March 22nd, 2010 by admin
In this latest brutal irony, a petition has been filed to prevent foreign law firms from performing even routine tasks such as contract drafting or document review in India. Of course our esteemed ABA has greenlighted wholesale exporting of American legal work to India and is furiously drafting new policies to liberalize licensing requirements for foreign lawyers here in the United States.
Am I the only one to think there is something grotesquely wrong with this scenario?
In another cruel twist, it appears they are even throwing some of the foreign outsourcers out.
Speaking to Bar & Bench, one of the members of the Association, Karthikeyan, said “the issue is no longer about the entry of foreign law firms, it is also about the manner in which these foreign law firms continue to do business in India despite a ban on them. These firms have already entered India indirectly and are operating out of five star hotels and business centers”. “The lawyers working at these foreign law firms enter India using visitor visa thereby violating immigration norms. Also, the work is done in India but billed in foreign countries, and thereby the foreign firms avoid paying taxes to the Indian Government”, he said.
The Bar Council of India, Union Law Ministry, External Affairs Ministry and the RBI are amongst the Government respondents. There are 31 foreign law firms in the dock including UK’s Allen & Overy, Clifford Chance, Linklaters, Freshfields and US law firms, WilmerHale and Shearman & Sterling. Integreon, one of the largest LPO’s in India has also been dragged in this dispute. Several law firms including Allen & Overy and Simmons & Simmons have outsourced legal work to Integreon.
The writ petition does raise the issue of entry of foreign law firms, however, interestingly it also stresses on other aspects such as the manner in which these foreign law firms currently provide legal services in India. Here are some of the issues:
Entry of Foreign Law Firms – Immigration Law violations
The Association has not only questioned the entry of foreign law firms, it has also challenged the mode of entry of the foreign lawyers into India, as it has alleged immigration law violations by foreign lawyers. Most lawyers working at these foreign law firms, especially in the Capital market space visit India using tourist visas. A Magic circle firm associate who didn’t want to be named said “procuring tourist visas to India is the easiest way to visit India. Therefore, most lawyers opt for it, since our visits do not last more than two weeks at a stretch.”
Law Firms in the guise of LPO’s
The writ petition also alleges that most foreign law firms exist in India through the Legal Process Outsourcing (LPO) outfits. The petition states that most foreign law firms have their back end offices in India, which not only does their back end activities, but also provides legal services in India. Clifford Chance is one such law firm, which has a back office in India. The Clifford Chance back office is supposed to undertake only office billing and technology related work for Clifford Chance and its best friend in Saudi Arabia, Al-Jadaan & Partners.
Law as a business as opposed to ‘Noble Profession’
Bar Council has imposed various restrictions on the practice of law in India including restrictions on advertisement of legal services by lawyers. The practice of law is treated as a noble profession in India, but the foreign law firms are treating it as a trade or business and a ‘money spinner’. The Association has annexed the pages from the websites of the foreign law firms and newspaper clippings about these foreign law firms claiming to have an India practice. It is alleged that these instances tantamount to ‘advertisement’ of legal services by the foreign law firms in India.
The Indian Bar is taking a far more proactive stance in protection its constituents than the ABA and many state bar associations.
Tags: ABA, American Bar Association, lpo, outsourcing
Posted in ABA, ABA Formal Opinion 08-451, American Bar Association, India, document review, integreon, legal process outsourcing, litigation support, lpo, offshoring, onshoring, outsourcing, outsourcing law practice | No Comments »
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