One in Twelve of your Brethren at Risk?

Will 8% of all lawyer jobs be "outsourced" by 2015?  So Forrester Research would have it.  GE's inhouse department claims to have already saved $2-million by putting eight lawyers and nine paralegals in Gurgaon, India.  So the (financial) handwriting is on the wall; is this occasion for hand-wringing about the coming impoverishment of the profession, or for celebration about another triumph of innovation?

Neither.  To begin with (unlike the ur-outsourcing example of call centers, for instance), the vast majority of what lawyers do fails both tests of a task susceptible to outsourcing.  Those two tests are:

• that the task be ultimately reducible to a set of rules, a grand flow-chart, if you will; and
• that it need not be performed face-to-face.

The second test will save all our waiters and hairdressers, police and firemen, doctors and nurses, teachers and hardhats; the first test will save all our "knowledge workers."  To be sure, as GE demonstrates, some "lawyerly" activities—massive document reviews, drafting boilerplate, low-risk agreements—can and should be outsourced.  Not only are they intellectually unsatisfying, they are not tremendously remunerative.  (This apes my instinctive comeback to politicians pandering to laid-off textile mill workers with promises of subsidies or trade barriers:  "So, let me understand, your dream for your children is that they can grow up and go to work in a textile mill?")

More intriguing than the question of low-on-the-foodchain inhouse work being farmed out is whether there's to be a role for outsourcing in law firms themselves.

A far more thoughtful, and comprehensive, piece is provided by a Hildebrandt partner writing in Legal Week.  He provides the requisite background and overview of the attractions and demerits of outsourcing, follows with a virtual checklist of what an Executive Director would want to analyze in reaching a go/no-go outsourcing decision, and points out that the benefits include not just cost-saving, but flexibility, quality-for-money, and 24/7 operational capability.

So outsourcing is here to stay, and here to grow.  We see yet another example of David Ricardo's (1772--1823) principle of comparative advantage, and the benefits of trade and specializing in what one does best.  Stanislaw Ulam once challenged Paul Samuelson to name a single principle in economics that was both true and non-trivial, and after some thought, Samuelson responded with Ricardo's theory: 

"That it is logically true need not be argued before a mathematician; that it is not trivial is attested by the thousands of important and intelligent men who have never been able to grasp the doctrine for themselves or to believe it after it was explained to them."

The good news is that outsourcing the mundane lets you focus on the exciting, intensive, high-value practice of law.  Or, as the Hildebrandt partner puts it, the greatest risk is in facing the outsourcing challenge and doing nothing.