21/09/2015
The past few years have seen discourses of the knowledge economy occupying a central place in development discussions. Knowledge is considered a key source of growth and competitiveness in the global economy. Often, the Indian IT industry is showcased as a model for developing countries to follow. It is argued that Indian IT firms have moved up the value chain to offer a range of services that use expertise and are information-intensive. Besides, the Indian IT sector is considered a prime example of global production networks providing high-quality job opportunities with privileges of high salaries, career development opportunities, comfortable working conditions and employee-friendly human resource policies. In contrast, others argue that most of the services provided consist of developing and maintaining software for clients, staff augmentation services, software services such as coding, low-level design, testing, maintenance, data conversion, porting and development of software applications and tools that are low-end, routine, monotonous and are not skill-intensive or enriching in professional terms. In short, a majority of the work outsourced to India constitutes “commodity” work. In the context of this debate, we examine the case of lawyers working in legal process outsourcing (LPO) firms.
LPO is a process by which in-house legal departments, law firms and other organizations outsource legal work from geographic areas where it is costly to perform, such as the US or Europe, to those where it can be performed at a significantly decreased cost, primarily India. The main reasons for outsourcing legal work have been cost savings, convenience and efficiency. With regard to India, there are a number of economic, geographic, historical, legal, linguistic and political advantages to be reaped such as generous tax breaks, time differences, a well-educated and trained English-speaking workforce and a common law system similar to what is practised in the US and UK. Eighty per cent of the revenues accruing from LPO come from US clients, with Australia and the UK accounting for the rest.
Unsurprisingly, the issue of outsourcing jobs abroad stirs emotion among Americans. In case of legal work, besides moral outrage and job security issues, outsourcing to foreign firms raises ethical and professional conduct concerns. The ethical implications of LPO and their rulings and statements have largely focused on five key issues: conflicts of interest, confidentiality, unauthorized practice of law, disclosure to clients and billing practices. Consequently, though the responsibility for adhering to the ethical code of conduct lies with the US-based client, Indian vendors must ensure that requirements of confidentiality, against unauthorized practice of law, and prevention of conflict of interest are met. LPO firms make special efforts to meet their clients’ conditions by signing service-level agreements, employing foreign-trained lawyers to oversee the work, having strict recruitment policies, stringently implementing processes featuring six sigma techniques and providing data security guarantees.
In India, LPO is perceived as an alternative career option for lawyers. The legal profession in India, which focuses on litigation, operates largely on personalized relational networks. This makes social capital a necessary precondition for a lawyer to be successful. Lawyers without such advantages face years of struggle with uncertain outcomes in terms of established careers. LPO provides an attractive alternative to legal professionals, offering them higher salaries, work-life balance and better working conditions. The salaries that LPO lawyers earn are much higher than those available to litigators during the initial years of their careers, thus making it difficult for employees to move out of the industry once they join an LPO firm. Besides, in litigation, work hours are unreasonably long and unpredictable, compared to those in LPO firms. Being employed in an LPO firm also gives the lawyers an opportunity to perform “global” work in a corporate atmosphere. LPO firms provide world-class infrastructure and high-quality working conditions with air-conditioned modern offices plus perks such as complimentary food and beverages, health allowances, cab facilities and recreational facilities. What seems most attractive to lawyers working with LPO firms is that they showcase a corporate culture that underscores performance, transparency, openness, meritocracy, equality and inclusivity, as opposed to the work culture associated with litigation, where ascribed status is emphasized. Those benefiting most from LPO jobs are female lawyers who feel they can work in safe environments, draw handsome salaries and aspire to move up the corporate ladder.
Whereas lawyers benefit economically, LPO work has implications for their skill-sets. The decomposition of legal services into three discrete blocks, namely, knowledge and information management, consultative advice and representation, and client relationship management, though making outsourcing possible, at the same time, has limited the scope of work available to Indian lawyers.
LPO work involves tasks that are low in complexity, autonomy and variety such that standardisation and routinisation are predominant. Indeed, the skills required in LPO firms are often limited to familiarity with e-discovery software and command of English. For most lawyers working in LPO firms, the relationship with the client is dehumanized with the keyboard and mouse replacing human interaction. In short, LPO lawyers only compile and synthesize information that is used in providing legal services. It does not require the nuanced judgement traditionally associated with the intellectually demanding legal profession, nor does it permit the LPO lawyers to build this expertise and experience to develop legal insights.
Three sets of responses to the situation are evident from LPO lawyers. One group recognises the trade-off and is comfortable with it. They appreciate the gains linked to working for LPO firms. A second group expresses ambivalence where disappointments eclipse advantages—but the de-skilling effect of LPO work coupled with financial considerations precludes their return to litigation. A third group, comparatively small in size, acts on its disillusionment and chooses the path of litigation, opting to develop their professional potential.
Although LPO firms offer lawyers an alternative career path with some short-term attractions, the commodified nature of work does not advance their knowledge. It is not surprising, then, that the LPO industry prefers to recruit fresh graduates who find it easier to adapt to the LPO context, rather than lawyers with litigation experience whose skills such as interpretation of the law and ability to argue before a bench impede their performance in the LPO space.
Ernesto Noronha teaches organizational behaviour at IIMA. His re-search interests include diversity at work, industrial relations, organizational change, organizational control, and ICTs and organizations.
