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Mumbai law: 1,000 City staff 'will lose jobs' as legal work goes to India
Amar Singh and Richard Orange13.07.09
MORE than a thousand London lawyers could be made redundant by the end of the year because their jobs will be outsourced to India, it was claimed today.
India's largest law firm, FoxMandal Little, said the amount of legal work being sent there would double this year.
Soumitro Chatterjee, head of FoxMandal Little's outsourcing arm, believes the boom could result in more than 3,000 corporate lawyers and administration staff in cities such as Mumbai and Delhi going on the pay roll of City firms and British companies by the start of next year.
Mr Chatterjee said he had met representatives from 10 City firms in recent weeks - each looking to outsource up to 100 legal jobs.
He told the Standard: "Firms have been coming around and talking to many people. UK law firms are interested in outsourcing document review, contract drafting and legal research. All of them are thinking of creating between 50 to 100 seats [jobs]."
According to Value North, an Indian consultancy, there are about 10,000 people in the country - 4,500 of whom are qualified lawyers - doing outsourced legal work.
About 1,000 lawyers are working on London-based contracts, including for the 2012 Olympics, although most are assigned to American companies.
But Mr Chatterjee believes London's outsourcing could catch up with America's as British law firms come under pressure to provide cheaper services.
"By the end of this year we will see a lot of activity. I think the UK could be as big as the US," he said.
London-based Rio Tinto Group, the world's third-largest mining company, revealed last month that it had hired a team of 12 lawyers in Delhi, which it said would be seven times cheaper than in London. Leah Cooper, Rio Tinto's managing attorney, said: "We took a look at our internal costs and the amount we were spending on outside counsel and saw an opportunity to make significant changes."
Magic Circle firms including Allen & Overy and Clifford Chance send work to India and South Africa, as do other London firms such as Eversheds, Lovells and Simmons & Simmons.
Jonathan Brayne, chairman of A&O's India group, said: "We want to ensure we have best practice and we want to make sure we are learning lessons together. Every part of the firm is planning to keep costs down."
Sanjay Kamlani, chief executive of Pangea3, an Indian legal process outsourcing firm, said: "We have worked with a number of the Magic Circle firms, usually at the request of their clients. It's typically corporate clients, who want to cut costs."
Indian law graduates are paid £300 to £550 a month, which can rise to £1,000 a month for lawyers with two years' experience. This compares to £2,500 to £4,000 a month for British law graduates and £6,000 a month or more for qualified lawyers. The number of law jobs in Britain fell by 16,700 last year, from 296,500 to 279,800.
They throw big contracts at us'
Pooja Chatterjee, 23 and Mehnaz Sultana, 25
Junior Lawyers for New Galexy Partners in Mumbai
Salary: Rs 48,000 (£6,000)
Both studied a five-year business administration and law degree at Symbiosis Law School, in the city of Pune, and joined the firm in June last year after graduating. Ms Sultana said: “The only difference with what firms like Allen & Overy do and us is that we don't talk to the clients.” Ms Chatterjee last year worked on a “major London Olympics contract for an American construction firm”. She said: “We are getting good experience on important UK work.”
Delnaz Palkhivala, 36
Senior Lawyer for New Galexy Partners in Mumbai
Salary: Rs 1.2 million (£15,000)
Graduated in law from Sheffield University in 2000. She said: “We've done contracts for BAA, we've negotiated contracts with O2. They've been throwing big contracts at us, because they know they can save money by not doing it with the Magic Circle firms.”
Reader views (18)
Why so much prejudice against Indian Lawyers, because the outsourcing work has been given to Indian LPO. It is not proper to thing that low cost job means less quality job.Then if this is correct,then High cost job does not ensure quality work.
- Sarita Shivaraman, Mumbai , India
This article is very true in the current Indian Perspective. I work with a leading corporate law firm and we are getting increased amount of work not only from the US,UK but several other EU countries. However,there is a typo in this article,please look at the salaries given and the conversion rates in GBP,whoever wrote this article would have the readers perplexed by these rates!
- Yudhist Singh, New Delhi
When I worked in the NHS (hospital) recently, there were rumours that the secretarial typing was going to be outsourced to India/Asian countries. This would of course be a disaster and put patients' lives at risk. It is chaos in the hospital admin services in any event, so to outsource would be a very stupid idea. Imagine the spellings of drugs and diagnosis/prognosis which are similarly spelt but are for very different illnesses.
- Lin, London England
Mr Singh and Orange have just rehashed the entire thing -old wine in a new bottle. Outsourcing isn't anything new. Companies will want to make profit in any way they can and if outsourcing to India or China is the answer then that is the harsh reality. Stop blaming Indian lawyers and get your economy back ontrack. Its regressive!
- Pooja, Mumbai, India
How come City firms cannot hire British staff and get a cost effective pay structure in place? It is not as though we are short of lawyers and trainees here.
I certainly will not use a firm that outsourced my confidential data overseas. Both because data security cannot be guaranteed and because it costs British workers their jobs.
Furthermore, quality of advice cannot be guaranteed. It would be safer for me to do it myself.
- Karen, London
This would never have happened under the Tories.
- Cyberman, London
I recently wrote about data security obsession in legal process outsourcing companies in India. Outsourcing cannot be fought. It just makes too much economic sense. If the London market believes that language is a barrier, outsourcing vendors will find solutions to fix the issue. Their obsession with data security shows that they are extremely serious about providing cost-effective legal services. There are also serious plans, and this might take a few years, to move up the value chain, fuel competition with City firms, who might be prepared to compete on price.
http://www.rainmaker.co.in/therainmaker/feature/datasecurityobsession.htm
- Aju John, Mumbai, India.
Im sure many a lawyer laughed and sneered when indian carpenters and Polish plumbers were putting British guys out of work.
Now look, its come closer to home, not so good now is it?
Anyway all these companies outsourcing, what are they going to sell in this country when no-one is working and earning money? DUUUUURRRRRRRRR.
- Russell, London
I've just spent hours on the phone trying to sort out the mess caused by an Indian call centre worker. I called to activate my new card and he cancelled it instead!
- Phil, London, UK
Do you want your sensitive legal matters handled by a firm that was outsourcing them to India? Or to any other place where the staff are outside the reach of British law and data-protection?
I most certainly would not.
- Nigel, London
All the outsourcing (including the call centres, IT, banking etc) to make savings which mostly dont get passed on to the consumer but the bigger worry is that there must be a knock on impact to our unemployment rate and the benefit - surely the Govt should penalise companies so it can bring in more tax revenue to cover this.
- Kiraz, London
I have just been made redundant from my job as a legal secretary from a Top 100 law firm. At the moment I am in a state of shock because of this at the moment. I have made contact with at least 12 agencies and have been told there are no jobs around. I have worked for 40 years and this is the first time I will sign on as unemployed and it scares me. As does the prospect of losing my house. Outsourcing work to India is not good. The language etc will probably create more work for those in the London originating office. It would probably be a lot easier to do it in London in the first place. The main reason for all this is obvious. £6,000 for a lawyer in Mumbai £70,000+ for a London lawyer. Need I say more?
- Jan. Need, Romford
It doesn't matter who it is losing their job, whether it's a builder, plumber, IT professional or a lawyer. When you've trained for something for many years, and worked all the hours god sends, it's quite heart-breaking not only to lose your job but to not be able to find anything else you're qualified for, and we all need to pay the bills. We need to get the economy back on track together not snipe about who deserves it more or less than another.
- Redundant City Lawyer, London
I wonder if any of the people posting negative comments on this article, are the same sort of people who usualy sneer at the "british jobs for british workers" pickets & strikers.
You can't have it all ways now can you. After all it's a global economy, etc, etc, etc, or was it just OK when it looked liked builders, plumbers, dock workers were only affected?
- P Staker, London
Well I lost my IT contract to a company in Bangalore last year after a ten year relationship with a bank simply because the prices the indians charge wouldn't pay my council tax. Now the lawyers, then who next ? Any luck it'll be the politicians who have sold us all out and the managers who made the decision to outsource to these places.
- Squiz, Islington
>>they are reluctant to admit they cannot fix your problem and carry on bungling through for hours on end, anouncing the problem is fixed when it clearly isn't!
I experienced this when ABN AMRO outsourced their IT Ops to India. It was a complete disaster. Now look what has happened to ABN AMRO.
- Adam, Harrow, UK
Who would honestly miss a few thousand fat-cat lawyers if they were sacked?
Anyone who lives in the real world outside of London will not miss them - take those swines in the House of Conmen with you as you close the door on your way out.
- Reuben Camara, Republic of Morecambe, UK
NO - NO - NO
I work for a large law firm who outscourse their IT work. It is absolutely dreadful and cannot equate to having qualified staff within your building/location that can help. The language barrier is major and differences in culture enormous (they are reluctant to admit they cannot fix your problem and carry on bungling through for hours on end, anouncing the problem is fixed when it clearly isn't!).
It does not save money in the long run - but adds stress and poor day to day running operations to the every day folk left to pick up the pieces!
- Legal Pa,, City, London
