Simmons set to vote on moving legal jobs offshore

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  • I would seriously question whether lawyers in India or S Africa would be able to meet the kind of standards that clients expect.

    Good luck selling shoddy due diligence to clients in the UK, whatever the reduction in cost.

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  • I think it's a very bright move if it is done transparently. For those that remain, hopefully it will mean better work.

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  • This is all part of the trend of the incredible shrinking law firms. At last they've realized that their clients don't want to pay for enormous bloated ranks of salaried lawyers.

    There are so many elements of legal work which can be done cheaper and more efficiently by contracting out.

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  • Fascinating....

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  • ...and I would seriously question whether Anonymous @ 27-Apr-2009 11:39 am, really believes that the vast majority of our work can not be done by and half intelligent hard worker to and above 'client standards'. I would say that at least 50% of the work that younger associates do can be outsourced without a problem.

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  • Anonymous - why do you immediately assume that lawyers in poorer countries than you are lucky enough to live in, produce "shoddy" inferior work. Shame on you

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  • Firms like Simmons & Simmons will inevitably be feeling the pinch. A lot of the firm's growth in recent years has been off the back of its Financial Markets Practice. Counter-cyclical and non-cyclical practices are unlikely to have grown at the same pace over this time.

    So there is nothing like a severe downturn to focus the mind on achieving cost efficiencies. Speaking as a Simmons alumnus, my concern is less about the quality of lawyers in overseas markets than the ability of the firm to manage them effectively.

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  • Dear Anonymous

    You question, whether South African lawyers can meet the expectations of clients in the UK.

    Well, the UK firms definitely think so. At last count, aproximately 12 of the 75 graduates from UCT Law School (2002) work in the UK or US. They work at all the big firms, ranging from Herbert Smith to Sullivan & Cromwell. This statistic should be seen in perspective, because not all 75 graduates are qualified lawyers today.

    Please tell Giles White, ex head of Linklaters Asia, Eversheds, DWS, White & Case (all who have offices or alliances with South African firms) that South African lawyers are not competent, or Eversheds or DWS.

    It should not be forgotten, that some major South African businesses, like Investec, Old Mutual, Liberty, SAB Miller etc are listed on the LSE and they are happy to use South African law firms.

    On the eve of attending QLTT classes, I cannot help but smile and think that in an increasingly globalised world, that the competition is hotting up.

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  • Anon @11.39am is just wrong. As an English qualified lawyer who sweated in the City for 14 years at Freshfields and Weils before escaping to the good life in Cape Town I can tell you the quality of lawyering here is excellent and more than adequate to tackle most aspects of large scale litigation and corporate due diligence.

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  • Very smart move, recognising that clients are increasingly wanting cost reductions and that much of the work does not need rolls royce treatment to be done well. They'll do well out of this, it makes them look cutting edge, commercial and innovative.

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  • Before training to become a solicitor, I worked for a telecoms company that outsourced several functions to India a few years ago. It was a complete disaster.

    By the time I arrived my responsibility was to help with the return of most of those functions to London, at considerable cost to the company.

    The relief in the voices of the customers who had not taken their business elsewhere as a result of the diablolical standards of customer service experienced following the changes was palpable.

    It beggars belief that the legal sector would fall into the trap of thinking that a move like this could actually save them money in the long run. All it will do is alientate their clients and make life more difficult for the staff who remain in the UK!

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  • We all know what it's like dealing with outsourced call centres in India and wherever and this is going to be the exact same - cheaper service but poorer quality work.

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  • The challenge to firms outsourcing work (whether legal or support) is to manage the process and quality so that clients still get the top-end service they expect and can benefit from the resuting cost savings that outsourcing delivers. The management team at Simmons, and any other firm considering this, would only choose this route if they felt it was a win-win situation for clients and themsleves.

    Within 3 years I would expect most major firms to be outsourcing much of the process-driven work that junior lawyers regularly undertake and this can only be good for the careers of those lawyers.

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  • I guess that Anonymous would exclude Lord Steyn and Lord Hoffmann from the list of South African lawyers that would fail to meet client expectations!

    Simmons may be onto something. It can be expected that with the redundancies in the UK legal market it must also have influenced some of the many Saffer lawyers working for City firms. Why not employ them in SA (albeit indirectly) at a fraction of the cost they would be expecting in the City.

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  • I guess it depends on what sort of work is to be outsourced: I assume Simmons will still put their PI cover on the table for clients and backstop the work?

    I've been based in Asia for 8 years. A lot of our work is 'interfacing' with local counsel and, (putting it politely), it takes a huge amount of time and is frought with difficulties. Clients doing deals in the region understand this issue. I'm not sure that clients in an European context would have the same understanding...

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  • Indeed, this is a great news from Simmons after laying off more than a hundred of associates globally on the pretext reducing costs.

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  • Having had experience in the states and Africa, i completely disagree with you Anonymous. I think the approach you have chosen to take displays your ignorance about jurisdictions other than your own. I wouldn't be at all surprised to find out that you have never dealt with a foreign lawyer on a cross border transaction or complex litigation. When you do, you will realize that lawyers who practice in foreign jurisdictions (many of who studied in Harvard, Oxford etc) are truly excellent.

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  • I think there is something to be thought of here which is not whether India, S Africa or the other countries can handle this but is it fair to those in the UK who loose their jobs?

    There are enogh competent and skilled individuals in those countries to handle the work and turn out quality product but yes their way of working and the use of language is different from what Europeans are used to. SO be patient....

    And if the quality was really that bad then CC and the others wouldn't be so keen to have best friends alliances in India and continue to out source their work or retain foregin qualified lawyers from these countires.

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  • As an in-houser I have previously worked for companies heavily involved in outsourcing some of their client orientated services overseas. In most cases it was a complete disaster and even if with the most stringent quality control procedures, the standards were not satisfactory and clients absolutely hated it and left en masse. Most of these companies were at some point contemplating how to get these services back on-shore.

    Funny that the legal profession views this as an "innovative move" when a large proportion of the business world has wised up to the fact that you shouldn't underestimate your client's relations.

    There are other ways to cut costs and if my current external advisers were enaging in outsourcing, I would most certainly reconsider their appointments.

    Another thought: how will law firms source senior lawyers in a few years' time if there is no need for junior lawyers' now?

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  • Why not outsource elsewhere in the UK to solicitors qualified in England and Wales? A cost saving would be achieved and clients would continue to benefit from English legal advice from English lawyers which is what they are paying for.

    I know there are plenty of quality lawyers in RSA, India and Aus, but the vast majority of those lawyers will become partners in their own countries and maybe firms in the UK or US and will not want to work as agency staff for Simmons on lower wages.

    The process will be problematic and I am sure the outsource agencies have been smart enough to ensure all liability rests with Simmons.

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  • Well, that's the end of employment prospects for people who complete a law degree and fail to secure a training contract. Bye bye paralegal jobs.

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  • They outsource the janitors and I said nothing. They outsourced the security guards and I said nothing. They off-shored the data input clerks and I said nothing. They off-shored the client care call centres and I said nothing. They off-shored the software developers and I said nothing. They off-shored the tax form prep work and I said nothing. Now they are off-shoring "junior" legal work, and we'll probably say nothing.

    When they come to off-shore most of the rest of us, who will be left (employed) who can say anything?

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  • Speaking as an inhouse lawyer who regularly uses outside law firms, I can say without question that the quality of legal advice and work from lawyers in SA or Australia/NZ is the equal of any I have instructed in the City with the considerable advantage of less cost and less risk averse advice. Simmons are doing exactly the right thing by their clients (provided they are up to the management challenge)

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  • I am qualified to practice in England and Wales and Nigeria and work with solicitors from the top UK firms on a regular basis on cross border transactions (usually on oil and gas transactions) and I think that the quality of work from the top Nigerian firms is as good as you can get anywhere. I have also interfaced with South African firms and have found them to be excellent. I think the first poster should get his head out of the sand and appreciate that there is a lot of quality outside England and Wales.

    Outsourcing may be cheaper but cultural factors should also be considered. For instance I relate to a German client differently from a Nigerian client. Outsourcing tends to come with a 'one size fits all' approach that may be detrimental in the long run. Again as suggested by an earlier poster, why not outsource to Wales or Scotland where the wages are lower?

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  • "Anonymous @ 27-Apr-2009 11:39 am" has certainly prodded a hornets nest with his poor opinion of South African lawyers. I agree with the other commentators .... there are some truly awesome SA law firms whose work is easily equal to the best anywhere. Like in any market, though, there are also below-average SA law firms and lawyers, too. The charitable explanation for "Anon's" view is that he has experienced the latter but not the former.

    My prediction: a single global market for legal services is almost certain to evolve over the next 5 - 10 years, irrespective of current / historical obstacles. The drivers are compelling. Get used to it .......

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  • The quality of lawyers at top foreign firms may be every bit as good as the English firms but the work isn't being outsourced to top firms from what I understand, it's being outsourced to cheap agency staff.

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  • How long until overseas lawyers wise up and push up their prices to just below Simmons'? Or until a downwards-spiral bidding war for this work breaks out among overseas law firms? This is applying a short-term sticking plaster to deeper, unaddressed over-lawyering problems in current litigation and due diligence work.

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  • Why is everyone who thinks this is a good idea so keen to send their jobs overseas? If this plan works then why have any lawyers in the UK at all? What reason can there be not outsource everything to a lower cost centre? If jnr lawyers overseas can do the same job as jnr British lawyers then, logically, snr lawyers overseas can do the same job as snr British lawyers at a lower cost. On this basis there is no reason to have more than a few client facing lawyers in the UK; the rest of us can be made redundant whilst everything is done overseas.

    Also, why do those who like this idea seem to assume that it will not be their work that is sent somewhere cheaper?

    Finally, how will you train jnr lawyers if there is no work for them to do because it is all being done at the lowest possible cost outside the UK?

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  • Interesting reading! Of course there is always the other option of already extremely well paid partners doing something novel like reducing their charge out rates. Heaven forbid!

    Outsourcing is all well and good, especially for clients but once it has started where does it stop? One day its due diligence the next your house is being bought and sold via Mumbai, all in the name of cost reduction and increased profits per partner.

    If it proves successful might it be renewed in three years time only this time include all lawyers bar a lucky few senior non partners?

    Whilst I can see some benefits to globalisation leaving trainees, and junior to mid ranking lawyers unemployed is not one of them especially in the current economic climate. Home grown talent needs to be nurtured and maintained for the long term.

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  • Fascinating....

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  • Globalisation; don't you just love it!

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  • A law firm yet again proposing to cut more of its ranks. This time the work is there unlike the first round of redundancies. Strikingly on this occasion the partners seem to think think it would be preferable for domestic clients to have their matters serviced in India, preposterous!

    The proposal also does not sit well with me. Redundancies are justified and necessary when there is little work in a practice area due to market conditions. When there is work and it is being proposed that even more London jobs are cut in favour of out sourcing overseas, fuelling another countries economy and not our own is somewhat objectionable. The proposal strikes me as spineless. I am sure many associates would opt of a pay cut over indefinite unemployment.

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  • I am an independent consultant who works and lives in India supporting the Indian legal profession.

    I have bad news for all those commentators above who are suggesting that there is no future in sending work here. I also find it amusing - yes amusing - that there should be any suggestion that the work would be completed to a lesser standard than in the UK as even a small amount of time would confirm that the Indian lawyer is highly productive, very well trained usually in both the Common and Civil law and has spent time abroad. Oh yes and extremely driven.

    Firms are smaller here, that is true. However, the skills and the technical efficiency of the lawyers that I have had a pleasure to work with has led me to understand that, in many cases, the work that is completed is better researched and delivered in a timely fashion so that clients enjoy the significant cost advantage that results.

    I have worked with UK law firms for 18 years or so in areas which are relevant to this discussion - change management, improving working practices and the commoditisation of services. What disappoints me the most is that after so long a period in promoting change, despite the huge sums invested in IT, productivity gains as expressed in value for money to the client have not been seen. Perhaps that is why certain clients are looking elsewhere.

    The barrier to this has been the billable hour, excessive focus on recovery rates and utilisation and resistance to agreeing fixed quotations. Well, hello, its wake up time for all the top UK law firms.

    Indian firms do not, in the main, bill by the hour. Even if they do then charge out rates of a third of their UK equivalents ensure a significant cost benefit to the client.

    All that Simmons is recognising in their proposed initiative is that their key clients have recognised that cheaper legal services are on offer at an equivalent technical level elsewhere in the world. In aligning themselves to this trend, Simmons are protecting their business and their client base which is precisely what I would do if confronted by an unstoppable market force.

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  • I have conducted numerous cross border matters across Aust/Uk. Uk fees outrank Aust fees by at least five to one (often before the pund/Aus dollar differential cuts in) and there is no identifiable quality differential. Aust lawyers in the Uk firms are usually amazed by the inefficient over charging that occurs. Fascinating to see that a firm has the courage to start breaking down the informal London cartel.

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  • it's now the turn of law firms to outsource for staffs to do what junior lawyers and para-legal does is something that will not do any good for futrue.

    if junior lawyers of now have nothing to work on or made redundant, will there be any new senior lawyers or partners in the next couple of years? i guess that will be something we should all wait and see.

    outsourcing is just a short term solution to cut cost but not good for future.

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  • As a South African lawyer, I agree that the quality of services offered from top firms in other common law jurisdictions matches up to the services offered by top UK law firms. However, in my opinion, there are moral considerations that should play a role here. If firms benefit from having acess to the london market and of practising UK law and charging UK rates, surely there is some responsability not only to tain and develop local talent but to employ support staff from the area in which a business operates. I would find it appalling if my firm suddenly decided to sack the staff who have assisted me with my practice here in South Africa in favour of people who live tens of thousands of miles away. Don't be so greedy. Trust me, there will be bigger problems on the hands of UK businesses if they neglect to keep their own people employed. Try crime and poverty in the city of london for a few years and the capital will simply no longer be attractive for global capital. All for the sake of a few extra pounds profit in the short term wihout considering the long term implications.

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  • Let's say that S&S needs to work on an acquisition of a Chinese company. Can Indian or South African lawyers / staff agency employees do the DD worK? Can they read Chinese documents?

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  • In the current legal industry, cross-continent and cross-cultural outsourcing does not work.

    The external professionals do not feel the time and quality preassure and usually their work is not properly supervised locally. Further, it is more difficult (or even impossible) for the external professionals to get the whole picture of the transaction and do a meaningful work.

    It may work if "outsourcing" involves a law firm on the other side of the world. Its partners and senior staff could guarantee quality standards and timely delivery.

    But then this is not outsorcing. It is cooperation with foreign law firms working in less expensive jurisdictions. And I do not see why after some time these foreign law firms cannot pitch for the same work directly.

    This news from S&S shows - once again - that the international law firm business model does not work in these tough times. What it could work is the boutique law firm business model where only the skills and experience of the senior professionals are sold at lower costs.

    This news is also a nice (and smart) way to say that there will be further layoffs in the UK and worldwide.

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  • In reply to the post: "I would seriously question whether lawyers in India or S Africa would be able to meet the kind of standards that clients expect." ...

    I would seriously question what your meaning is...Are you really suggesting that Indian or S African lawyers from the same firm are incapable of delivering high quality service? I have to wonder what your implications are, other than supposedly ill-thought out patriotism.

    Firms have every right to choose who they feel is best able to complete their work, and if they are choosing their lawyers from abroad, that speaks volumes about how they feel about their capabilities in the UK.

    In short, remember your comments are speaking to a diverse audience and learn how to phrase appropriately.

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  • Any idea how many lives the NHS saves every year by outsourcing heart surgeries to India?? So it's okay to outsource heart surgery to India, but not legal services, Anon?? Quite stupid logic.

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  • so, after nike and adidas in India, it is time for cc and S&S......
    value for money? don't make me laugh!

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  • This move is not going to shake up the market - outsourcing low level legal work isn't going to help clients when e.g Lehmans goes belly-up - they will all need top notch English lawyers, not call centres. In fact one magic circle has been outsourcing certain types of due diligence for a while, it is not scary or groundbreaking.

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  • Provided there are no issues with malpractice coverage, and provided that the outsourcing results in substantial cost savings for the clients (and not just increased profits for the law firms), moving due diligence offshore makes all kinds of sense.

    Of course, the clients must be fully aware of where the work is being done, and how rates compare, so they are fully equipped to check those bills.

    It'll also make setting up hard copy data rooms more interesting.

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  • One of the most interesting and obviously controversial threads I've seen for a while. I can't personally offer informed comment on Indian or SA legal communities, but as a NZ lawyer who spent 5 years in the City with Silver Circle firms before returning home dual-qualifed in E&W also, here are some realities of modern global legal practice:
    - NZ & Aus lawyers are very well-trained and highly sought after by top London firms for their skills and versatility
    - hourly rates and forex rates mean the same work can in many cases be done 'down under' as efficiently and competently at 20-25% of London costs
    - the favourable time zone means work and communication can be done overnight - an instruction sent at the end of a London day can have 10-12 hours work done on it and be back by email by the time the London firm opens again the next morning
    - the recession is going to mean savvy clients will force firms to find more efficient delivery mechanisms, at least for the types of work that can be outsourced
    - not everything can be outsourced - clients still need local 'on the ground' advice and legal judgement to front a matter, so don't panic or get protectionist about jobs in the UK just yet.

    It is already happening - so may be better to embrace it and seek to grow market share, as S+S are doing?

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  • To the original poster, I find it funny/arrogant that people will think that the standards will slip by outsourcing to India. Within the top law firms (Linklaters/CC) there are many Indian partners who are Indian/SA qualifed lawyers, and I wonder if you believe these people are below standard?

    Also, I thought Simmons & Simmons was an international law firm, so surely Indian/SA clients would not mind these lawyers.

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  • I have never found work coming out of India to be anything but perfect. This is not call centre work - do not be confused by this spurious association.
    If some firms take advantage of cost savings and others do not I wonder who will survive and thrive. London legal costs are not exactly inexpensive.

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