Insights into the HSBC offshoring to Malaysia of branch support

Richard Hennity, a senior lawyer from HSBC, spoke at the Legal Week Corporate Counsel Forum last week. HSBC, with 850 lawyers and 1350 legal staff, has for three years run a six-lawyer offshore program in Malaysia (See my post of April 13, 2008: pilot program of HSBC with Malaysian branch legal support.). An ex pat lawyer looks after the Malaysian legal group.

The team responds to written questions from the bank’s branches about legal questions, typically overnight. Hennity explained that the geographic dispersion of the bank makes it difficult to achieve enough work of any particular kind to sustain more of an offshoring program. In his words, “there is a lack of economies of scale.”

Hennity also mentioned that Deutsche Bank had outsourced work to an Indian LPO organization in the area of Treasury documents, but quality problems pushed them to recall the work to low-cost Birmingham, England. Hennity made the good point that offshoring to India doesn’t save much if the work comes from low-cost locations, only from high-cost countries.