Following last weeks informative CLE presentation on legal process outsourcing (LPO) by Jeffrey A. Proulx, we should be mindful of the 2007 A.T. Kearney study that finds costs slippage in the previous year attributable to off-shoring. The report found that although the wage advantage of offshoring locations for office services is set to last for another 20 years, it is on the decline as offshore wages for IT, business process and call center services have risen. Paul Laudicina, managing officer and chairman of A.T. Kearney., reported:
What is most striking about the results of this year’s Global Services Location Index is how the relative cost advantage of the leading offshore destinations declined almost universally, while their scores for people skills and business environment rose significantly . . . These findings reinforce the message that corporations making global location decisions should focus less on short-term cost considerations and more on long-term projections of talent supply and operating conditions.
Because of the infancy of legal outsourcing models in India and abroad, the Kearney study probably is equally applicable thereto as it is to IT or call-center services at the present. However, as legal outsourcing diversifies and matures, as is predicted,1 indepedent studies will need to be applied to these divergent models.
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1 Forrester Research has estimated that the number of jobs outsourced in the legal services area will grow to 35000 by 2010 and up to 79000 by 2015.