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Document review leads trend of outsourcing

Legal process outsourcing, or the practice of exporting legal services to low wage markets overseas, has become an accepted and growing practice despite the fact that it represents a fundamental change in the delivery of legal services to clients.

The list of legal services that are capable of being outsourced is growing, but law firms have generally found that discovery and document review is suitable and cost effective to delegate.

“By its nature, large scale review of millions of documents is ripe for legal process outsourcing,” said attorney Greg McPollin, vice president and managing director of Litigation Solutions at Pangea3.

The bulk of Pangea3 clients have been corporate legal departments and their outside counsel. The company also performs corporate transaction, intellectual property and compliance and risk management work offshore.

“I don’t know of anyone in Rochester doing it, probably because it’s still so secretive,” McPollin said. “Rochester firms haven’t been receptive to it in my experience.”

Jonathan Sablone, a partner with the Boston office of Nixon Peabody LLP, said the firm has used Pangea3 outsource services to review data offshore and believes outsourcing is an option clients should be aware of.

Legal process outsourcing is “still a bit of a stigma but it’s becoming more accepted for clients and law firms primarily for discovery,” he said. “The amount of data to be reviewed in discovery has gone up immensely and clients are looking for alternatives to the high cost involved. If the client desires it, it’s definitely the cheapest option.”

It also opens up time for in house counsel to work on more complex matters than document review. Most offshore LPO goes to India, where the legal system is grounded in British common law and there is a good supply of English speaking lawyers.

Pangea3, which was taken over by Thomson Reuters late last year, employs a staff of about 400 legal employees in Mumbai and New Delhi. Most are Indian attorneys. Pangea3 also recruits American lawyers to work in India.

Another outsourcing firm, Fronterion, believes attorney jobs at outsourcing vendors will become an attractive alternate career path for attorneys.

McPollin said an outsourced legal project will always have a U.S. lawyer overseeing it.

“We have a very process oriented approach to reviewing documents to ensure quality and efficiency and we keep up to date with progress status,” McPollin said. “Our clients take comfort in knowing we remain very close to them even though we’re thousands of miles away.”

Pangea3 clients provide document coding for the project and can dictate how they want the review process done.

In a 2008 ethics opinion, the American Bar Association said the practice of outsourcing was ethically permissible as long as steps were taken to ensure the protection of attorney client privilege and client confidence. The ABA also said foreign lawyers must be adequately trained and the costs must be reasonable.

Pangea3 now also offers clients the option of “outsourcing onshore,” in which work remains in the U.S. The company recently opened an office in Carrollton, Texas, near Dallas, for onshore outsourcing, which is more expensive than outsourcing to India but still less expensive than having it done in-house.