Increased use of legal support offshore threatens in-house jobs at home

The publicity about the offshore deal between CPA Global and Rio Tinto gushes, an ink river about Rio. This blog has poured out its share, but here is another small stream. The author of an article in Corp. Counsel, Vol. 16, Sept. 2009 at 60, wonders, “Should its [Rio Tinto’s] lawyers be concerned that the CPA deal could do them out of a job?” I was startled to read in the next paragraph that the architect of the massive deal, Rio Tinto’s managing attorney, emphatically denies that risk: “we will not cut legal jobs as a result of outsourcing … The team in India is there to support, not to replace.”

It seems clear to me that cheaper law-related services obtained from India and other locations will inevitably supplant some in-house lawyers. The clearest saving for a general counsel is to replace higher-cost talent with lower-cost, but acceptably skilled, talent (See my post of May 29, 2008: risk of job loss inside if work goes offshore.).

This observation gave me reason to update my posts on offshoring since the most recent metapost, in late June 2008. Amazingly, this blog has added 29 posts in the 13 months since then (See my post of Aug. 25, 2008: GE and its reversal of patent offshoring; Sept. 3, 2008: Microsoft savings from offshoring; Sept. 16, 2008 #4: “multi-shore” support; Nov. 30, 2008: not just savings, but also process and handoffs; Dec. 29, 2008 #4: Intel’s online auction for offshore support; Dec. 29, 2008: must law firms approve choice of offshore vendor; Dec. 29, 2008: profile of United Lex; Jan. 4, 2009: cost advantage of LPOs may be shrinking; Jan. 18, 2009: 15 blogs on offshoring; Jan. 22, 2009: 2005 survey on uses of offshore firms; Jan. 22, 2009: Gap and its offshore work; Feb. 5, 2009 #2: more blogs about offshoring; Feb. 7, 2009: 2% of legal work sent offshore; Feb. 12, 2009: modest penetration of offshore use in UK legal departments; Feb. 13, 2009 #3: two more advantages of offshoring; Feb. 18, 2009: should GCs insist that their firms offshore tasks; Feb. 22, 2009: professional certification for offshore personnel; Feb. 6, 2009 #3: South African LPO; March 15, 2009 #3: ISDA documentation done by Deutsche Bank; March 16, 2009: contract review project of Corplo; March 26, 2009: offshore decision analysis; May 3, 2009: my article on three major pluses and minuses of offshore services; May 19, 2008: gap between law firms and law departments in use of offshoring; May 21, 2009: 100 online resources about offshoring; June 15, 2009: if concerned about offshore security, use commonwealths; June 17, 2009: discussion of size of Indian LPO market; June 18, 2009: Rio Tinto deal with CPA Global; Aug. 4, 2009: heat map to determine what work can be sent offshore; and June 28, 2009: 10% of legal managers chose offshoring as a cost saving measure.).

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