Seven difficulties that can face law departments that want to send services offshore

Among the arguments in a solid book that disagrees with the current worries about America losing its competitive edge, Amar Bhidé, The Venturesome Economy: how innovation sustains prosperity in a more connected world (Princeton Univ. 2008) at 162-179, puts forth seven concerns with off-shoring. Each of them resonates with some general counsel.

1. Communications problems that are very hard to overcome at long distance. Nothing beats sitting at a table to cut through explanations and promote shared thinking.
2. Partitioning problems,” by which Bhidé means whether a project’s tasks can be divided up and parts done somewhere else, then integrated together successfully.
3. “Managerial capacity constraints,” whereby coordination demands beyond communication gnaw away at the efficacy of the off-shore arrangement.
4. The service is not performed any faster than onshore.
5. “Less than suitable supply” of talent. Low hourly cost means nothing if the person cannot do the work well.

The author summarizes these contentions at 204 and adds economics and proprietary information at risk: “the value of proximity and the difficulties of partitioning … the scarcity of managerial capacity, the relatively small savings that could be realized from off-shoring small teams, the limited supply of capable staff available in offshore locations, the competition from large companies for this staff, the difficulty of communicating across time zones and cultures, and the fear of their losing intellectual property.”