Outsourcing is a way of setting up virtual teams that might function in a lower cost jurisdiction. Here are some of the other pros and cons of setting up virtual teams (from an article published in the MIT Sloan Mgt. Rev. and cited by blogger Rees Morrison.)
I can’t fault lawyers for worrying about data security. Maintaining client confidences is not only a business necessity, it is an ethical imperative for attorneys. But I still scratch my head when I talk to lawyers about offshoring IP work and they raise concerns about preserving confidentiality. “How do I know my clients’ confidential information will be protected?”
As a matter of routine business practice, large multinationals have been sending sensitive information overseas for years. Any company that has chosen to outsource back office functions to India, the Philippines or China understands that data must be encrpted and that vendors need to be properly screened for compliance with appropriate security procedures. Read the rest of this entry »
For over a decade, IT work has been migrating around the globe to lower cost jurisdictions. While there have been some bumps in the IT outsourcing road (e.g. call centers in distant parts of the globe have created angry customers who have difficulty understanding the reps), for the most part, outsourcing in IT is now part of the business strategy of most large organizations.
The internet has truly flattened the world for knowledge workers and other professional services have begun to migrate across the globe as well. But the legal industry has been slow to adopt these changes. Lawyers are cautious by nature and while there has been talk for years in corporate circles about finding ways to control legal expenses, until The Great Recession, it was hard to get large firms in particular, to pay attention. That has all changed. Read the rest of this entry »
Preserving confidentiality is one of the common concerns that lawyers voice about outsourcing work to India. But worrying about data breaches across secure networks (where encrypted data is only viewed in secure facilities on desktop computers with no peripheral storage capabilities) is like worrying about whether you remembered to turn the light off in your office while you are driving your car off of a cliff.
Of course you need to make sure that your vendor is applying state of the art security practices; but a better place to focus your efforts is on the enormous security holes that are created by the use of laptop computers right here in the United States.
The current economic climate is forcing more law firms to look to cloud computing to trim costs. Concerns about data security are giving way to business realities. As blogger Carolyn Elefant observes:
It’s not clear whether lawyers stayed out of the clouds due to legitimate concerns about the security of these systems (after all, we lawyers have an ethical obligation to protect client confidentiality and safeguard these data) or because of the natural tendency to adhere to precedent and “the way it’s always been done.” For whatever reason, cloud computing made little headway within the legal industry — until now.
The movement towards sending confidential client information to third party servers (and in some cases, across international borders) is significant for the LPO industry. As I’ve previously noted, critics of off shoring legal work raise the spector that law firms who send work overseas do so at their own peril because client confidentiality may be compromised. I also posted about criticisms of cloud computing.
Clearly, the decision makers at firms that are turning to cloud computing have figured out that this risk is not significant. The same is true for IPEngine’s clients and other LPOs who have adopted the security protocols that have been established by the IT industry over the past decade. In short, while lawyers will continue to identify things that can go wrong with cloud computing or offshoring work, hopefully the pragmatists will prevail.
I’ve spoken about IPEngine’s services to a lot of lawyers. Naturally, I’ve gotten a wide mix of reactions. Some The enlightened ones see it as a promising way to leverage in-house legal resources. Others The “think in the box” lawyers seem concerned about confidentiality, export controls, and communication.
But yesterday, I heard a new one. The GC of a technology company spoke to his Indian born CEO about the possibility of working with IPEngine. The reaction was pretty shocking. The CEO did not feel comfortable sending confidential information to India because culturally, Indians do not respect the notion of trade secrets. If he were to send his invention disclosures to India, there would be nothing stopping an individual from stealing the information and commercializing it.
It’s a good thing that this never happens in the United States.
A brief historical overview (albeit a rather biased view) of how protectionism exacerbated the Great Depression (via the blog the Volokh Conspiracy).
In some ways, I think the logic of free trade makes even more sense in the world of white collar work. Opponents of free trade raise concerns about labor and environmental conditions in countries where wages are substantially lower. The argument goes: shouldn’t we level the playing field on agricultural or manufacturing imports? Employers in China and India do not need to comply with the same environmental and labor regulations so they can charge less for their products.