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The irony of cost parity between US contract attorneys and LPO attorneys [Bob Unterberger]

Is there any incentive for corporations to turn to LPOs for such tasks as document reviews when you compare current Indian rates with the recent downward trend in rates domestically?

Fewer and fewer U.S reviews are being performed by the expensive big-firm associates. It is much more common — and a much fairer comparison — for reviews to be performed by some type of lower-cost staff or contract attorney. Even in big cities, contract attorneys can be hired from staffing agencies in the $50/hr range; slightly more if special languages or technical skills are needed. These same attorneys can often be hired directly in the $35/hr range, and (sadly) at even lower rates during this current recession. Craigslist postings reveal offers for U.S. contract attorneys for as low as $20/hr. While the figures are pretty guarded, Indian LPOs pay reviewers in the $15-$30/hr range.

It’s ironic that there’s now salary parity with their Indian counterparts.

Where does this leave corporate counsel and law firms: U.S. contract attorneys are trained in U.S. law, at U.S. law schools, and licensed to practice law. But is that enough?

Bob Unterberger, a guest author, sent me this item, which I edited slightly.