Outsourcing is going to change the way American law firms operate. It has to. If you doubt me, I recommend you do four things:
1) Read this excellent post by Gerry Riskin.
2) Think about the do-its, which I'll introduce in a minute
3) Do some really basic math
4) Get your dosage change.
As the article Riskin cites makes clear, India is home to an enormous, highly educated, very motivated, low-cost pool of knowledge workers. They've already changed the software and call center businesses. Next comes law.
80% of legal work, particularly research, is formulaic. There are processes, and lawyers have to observe them. This means that once they know the rules, anyone, anywhere, can do this work, if they're properly trained. Someone in the U.S. can make the necessary little cultural changes, but the bottom line is that a lawyer in India (who, by the way, speaks better English than you probably do, thanks to the Brits' little sojurn in India under Victoria) can do the work.
A friend of mine, Chris, is a senior executive at a very large software/consulting firm in the United States. Like any American technology company with half a brain, Chris's has an enormous development and engineering center in India -- in Bangalore, I think.
We were sitting around a week or so ago drinking beer and talking about work, and Chris referred to these guys as "Do-Its".
"They're "Do-Its". You just tell them what you need, and they do it."
No muss, fuss or anything. They just get it done. Indians have a reputation for that. If you're a partner who's tired of babysitting associates, or who's had it up to here with personnel issues, that has got to sound really attractive.
As does the math. Let's say you're a partner at, oh, Wachtell, Lipton. I'm making all this up. The annual salary of a first-year associate from a Top Ten law school (like mine, Penn) just went up to $160K. Add to that, just guessing, $100K in benefits, overhead, and so on, and the nut for a first-year associate is now a quarter of a million dollars. That kid has to bill at least that much, assuming 100% utilization, before he even begins to make you money.
If you charitably assume that you're billing said kid out at $250 an hour, and equally charitably assume 2,000 billable hours (probably low, but whatever) then it's going to take six months of steady billing before he becomes a profit source, and for a first year, who isn't going to bill a lot for the first couple of months, that period becomes even longer.
Now, if you can take some of that work, and farm it out to a Do-It, that's more money in your partner pocket, right now, not down the road. And the Do-Its aren't stupid, or unsophisticated, or going away any time soon. They're just going to get better and better, as they have in software, while the first-year is just going to get more and more expensive.
One of the most basic principles of strategy is that you do as much as you can with assets you have that are inexpensive or abundant, and husband the ones that are expensive or rare. In law, the only asset you have is people, and they are extremely expensive. What if the Do-Its can make then cheaper? A LOT cheaper? Instant competitive advantage.
Guess what's going to happen?