| Several weeks ago I lectured at a continuing legal | | | | line. Do incoming revenues exceed expenses? If |
| education seminar on the opportunities, pitfalls, | | | | not, the remedy is fairly simple: either increase |
| advantages, disadvantages and benefits of | | | | revenues or decrease expenses (or both). |
| selective legal outsourcing. It wasn't a "hard sell" | | | | So what does this have to do with U.S. law firms |
| talk. Being a litigation attorney myself and having | | | | and companies selectively sending some legal |
| attended scores of legal seminars, I am personally | | | | work offshore to be produced at significantly |
| offended by blatant salesmanship offered by | | | | lower cost? Assuming that quality offshore legal |
| some CLE speakers, a practice encouraged by an | | | | work can be reasonably obtained, isn't it crazy to |
| emerging trend to charge, rather than pay, | | | | even entertain the idea? Won't even more U.S. |
| supposedly qualified speakers to grace the | | | | jobs be lost? |
| podium. Nonetheless, during the question and | | | | On November 11, 2008 The New York Times |
| answer session at the end of my talk, one | | | | headline declared: "Law Firms Feel Strain of |
| younger lawyer was clearly upset at the notion of | | | | Layoffs and Cutbacks." The article noted that law |
| sending any U.S. jobs offshore. His questions | | | | firm personnel, including attorneys, were being laid |
| reflected anger, even outrage, at the prospect of | | | | off because the clients were no longer able to |
| any U.S. legal work being sent offshore. | | | | afford the legal fees charged. Indeed, the Financial |
| One question bubbles to the top: Is legal | | | | Times reported a survey concluding that |
| outsourcing, or any type of outsourcing, politically | | | | "corporate legal bills soared nearly 20% (in 2006) |
| correct? A second question follows: What really is | | | | and could increase by a further 9% in 2007." |
| political correctness anyway, and why does it | | | | The law firm of Heller Ehrman, founded in 1890, |
| matter? | | | | folded in September 2008. This was a firm |
| Wikipedia defines political correctness as "a term | | | | specializing in big litigation cases, a supposedly |
| applied to language, ideas, policies, or behavior | | | | recession-proof legal arena. As recently as 2004 |
| seen as seeking to minimize offense to gender, | | | | Heller ranked second on the American Lawyer's |
| race, cultural, disabled, aged, or other identity | | | | A-List. Nonetheless, financial challenges led to its |
| groups." Conversely, political incorrectness is "a | | | | demise. In December 2008 a similar fate befell |
| term used to refer to language or ideas that may | | | | Thelen LLP, an 84 year old law firm, which had |
| cause offense or are constrained in orthodoxy." | | | | 600 lawyers in 2006. At the end of December |
| Political correctness has been traced back to | | | | 2008 Thacher, Proffitt & Wood LLP, hired by |
| Mao's Little Red Book. The term was adopted in | | | | the treasury department three weeks earlier to |
| the 1960's by the radical left as a self-criticism of | | | | work the the government's $700 billion bailout, |
| dogmatic attitudes. In the 1990's the | | | | announced it would dissolve. These jobs at these |
| characterization was used by the political right in | | | | three law firms were not lost because of legal |
| the U.S. to discredit the Old and New Left. Almost | | | | outsourcing, which, at present accounts for but a |
| always used pejoratively, "political correctness" is | | | | tiny fraction of U.S. legal service business. They |
| a label ascribed by one group to another with the | | | | were lost because of financial realities: law firm |
| purpose of controlling or manipulating thought and | | | | expenses (salaries being number one) exceeding |
| or behavior. | | | | revenues. Law firm clients are increasingly saying |
| One problem with political correctness is | | | | "we can't pay these ever increasing rates any |
| determining who, exactly, is "correct" in their | | | | longer." Clients question why they should be |
| thinking. Should Jesse Jackson or Rush Limbaugh | | | | paying U.S. associate attorneys, for example, |
| define political thought and social ideas in America? | | | | $200 or more hourly to perform large scale |
| Does it have to be one or the other? What about | | | | document review, when this task can be |
| the slogan "Buy America?" On its face, a | | | | undertaken competently by offshore lawyers at a |
| movement to buy American goods and products | | | | fraction of the cost. Further, recent ethical |
| exclusively would seem to be so universally | | | | opinions by U.S. bar associations (San Diego, New |
| politically correct that no reasonable person could | | | | York, and ABA) allow for a law firm sending work |
| take an alternative position. Wouldn't buying | | | | offshore to charge its clients a "reasonable |
| American-made cars ensure American jobs and | | | | supervisory fee" to oversee outsourced legal |
| help the overall American economy? Well, | | | | work. Wouldn't Heller Ehrman, Thelen and Thacher |
| perhaps, but the Big Three U.S. Automakers are | | | | have been wise to consider selective legal |
| apparently on their way out, while foreign | | | | outsourcing as a means to survival, thereby |
| manufacturers such as Honda and Toyota are | | | | preserving American jobs? |
| hanging tough. Why? The Big Three are saddled | | | | So, is outsourcing some legal work offshore |
| with union contracts requiring high wages and | | | | "politically incorrect," un-American, and likely to lead |
| benefits, even for some retired or laid off | | | | to a drastic loss of U.S. jobs that would otherwise |
| "workers" who are not currently producing cars | | | | not occur? Or, instead, is selective legal |
| or parts at any GM plant. GM had its best sales | | | | outsourcing but another tool (like computers, |
| year ever in 2007. It sold over 9 million cars all | | | | word processing software, voice recognition |
| over the world---the same number as Toyota. | | | | technology, email) to enhance efficiencies and |
| But Toyota made $20 billion and GM lost $40 | | | | improve the bottom line for law firms and their |
| billion. One year later, GM is on the rocks. Would | | | | clients alike? The decision is best made by you, |
| the picture have been different if free trade had | | | | yourself ,and your firm or company rather than |
| been restricted and GM could not sell autos any | | | | checking the wind and asking, "is it politically |
| place outside the U.S. and Toyota could not sell in | | | | correct? |
| America? Not likely. Businesses run on the bottom | | | | |