Almost a decade after helping to pioneer the trend of outsourcing legal work to India, a US firm has decided that things actually get done better in the US after all.
Law.com reports that Schwegman Lundberg & Woessner, a small patent prosecution firm, is bringing outsourced paralegal work back to the US because the initial aim of cost-cutting was no longer being met.
"There's a very large volume of paralegal work required to support patent prosecution," said managing partner Steve Lundberg. "It was working well for us because we were getting substantially lower pricing." But alas, while the arrangement worked well for a number of years, the firm eventually decided that "our productivity in the US was substantially higher" than in India.
Costs in India have risen, apparently, and automation is more prevalent, thus making it look "less and less attractive to be in India".
The firm said it originally saved about 50 per cent in labour costs for the outsourced work, based on the assumption that productivity was equal to that of the US. But the costs involved in shipping work to India, as well as management, supervision and training expenses and culture differences, all began to affect cost, added Lundberg.
"A US employee would feel a lot more freedom to take action in grey areas than an Indian employee," he said. "They would ask permission for things a US employee would do without blinking an eye."
The hierarchical nature of work in India was also a factor, he said, giving the example that if a photocopier ran out of paper, a paralegal in India would find a lowly administrative person to reload the paper instead of just doing it themselves.
"You get a lot of that type of thing going on that ends up slowing things down if there's any question about how things are going to work," said Lundberg.
Edge International consultant Jordan Furlong told Law.com that they are starting to see some examples of so-called "in-shoring" of legal work.
In June, Indian legal process outsourcer Pangea3, which was recently purchased by Thomson Reuters, opened an outpost in suburban Dallas that can accommodate up to 400 employees.
Folklaw wonders whether Australian firms should take heed and just stop with the outsourcing before they even start ...