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The outsourcing of U.S. jobs to India and China has emerged as one ofthe most hotly debated issues on the presidential campaign trail. And Hildebrandt International wants to make sure that debate takes placeamong law firm managing partners as well: The well-known law firmconsulting group announced today a joint venture to offer American lawfirms a means of outsourcing their support staffs to India. The joint venture between Hildebrandt and New York-based outsourcinggroup OfficeTiger will not mark the legal profession’s first foray intooffshore outsourcing, but the prominence of the Somerset, N.J.-basedHildebrandt, which has advised many of the nation’s top law firms, willno doubt lend the issue further momentum among lawyers. OfficeTiger, which has about 1,600 full-time staff, mostly in Chennai,India, has already signed up some major firms, including London’s Allen& Overy and New York’s Milbank, Tweed, Hadley & McCloy. Rick Vita, an executive vice president at OfficeTiger, said theconsolidation and reorganization taking place within the legal industrywould push firms toward outsourced solutions. “They’re the same drivers that corporations were experiencing in themid-90s with [information technology] outsourcing,” he said. Hildebrandt has played a role in several of the largest law firmmergers, including those resulting in Sidley Austin Brown & Wood,Bingham McCutchen and others. Vita said the fact that Bradford W.Hildebrandt “lives and breathes how law firms and law departmentsoperate” make Hildebrandt an ideal partner for OfficeTiger’s big pushinto the profession. Hildebrandt’s end of the joint venture will be overseen by James Jones, a former managing partner of Arnold & Porter,and Michael D. Short, a director at Hildebrandt in Washington, D.C. Short said the joint venture will focus on administrative functionsincluding word processing, recordkeeping and finance and accounting. Hesaid it also will be able to provide staff for legal andnon-legal research functions. “We’re approaching the marketplace with a suite of services that we knowhave applicability to a number of firms,” said Short, noting thatseveral firms have already expressed interest in the possibility ofoutsourcing to India. He said the joint venture will not offeroutsourced lawyers for now but will see how the market develops. Dennis D’Alessandro, the executive director of New York’s DeweyBallantine, said his firm had briefly discussed outsourcing somefunctions a few years ago but few partners expressed real interest,citing concerns about the quality of work by outsourced staff. Though he said he doubted outsourcing is on the horizon for Dewey, D’Alessandro said Hildebrandt’s entrance into the marketplace might swayopinion. “That’s a very well-respected firm,” he said. “I wouldn’t besurprised to see a few firms go that way in a few months.” SIGNIFICANT SAVINGS Short said the case for outsourcing is compelling. Given anestimated 30 percent to 60 percent cost savings in support tasks, hesaid, outsourcing could potentially free funds for firms to hire morelawyers. But law firms might just as likely use the savings to increase partners’compensation. Though corporations can point to shareholder benefit orincreased research and development spending in justifying outsourcing,law firms are vulnerable to charges that such moves are motivated onlyby greed. Ganesh Natarajan, a former partner at McGuireWoods and the founder ofMindcrest, a Chicago-based legal outsourcing company, said the politicalside of the issue is influencing a number of law firms. “We have been told very clearly by some law firms that they are going towait until after the election,” he said. Vita acknowledged that outsourcing is a controversial subject at themoment, but he said he expects the rhetoric to die down now that thepresidential race is past the primary phase. Natarajan said law firms, despite their political concerns,generally see benefits in outsourcing. He noted though that many firms,still suffering from the weakened economy of recent years, are moreconcerned about the underutilization of their present staff. Corporate law departments, he said, are much more apt to make use ofoutsourced legal staff, often because other corporate divisions alsohave cut costs through outsourcing. Natarajan, who provides Indian lawyers to his clients, said thereare few concerns about the capabilities of outsourced legal staff. Hesaid many of his outsourced lawyers, who earn anywhere from one-fifth toone-half of what American lawyers make, had training from U.S. lawschools and are well versed in common law doctrines. Short said OfficeTiger’s staff all possess undergraduate degrees andabout one-third have advanced degrees. “There is no compromise,” he said. But D’Alessandro said the concern is not so much about thecapabilities of the staff in India but control over the process. “There is clearly some paternal instinct within firms,” he said, notingthat lawyers at the firm like to work closely with staff to ensure thefinal results and would be wary of waiting for documents to returnelectronically from abroad. “I certainly like to control the product.” Short said he expects many firms to be initially reluctant tooutsource staff functions. At least early on, he said, most law firmsthat look to offshore outsourcing will probably do so as part of alarger restructuring. But Vita said demand will probably snowball as more and more majorfirms signed on. D’Alessandro agreed. “It’s a herd mentality,” he said.

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