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Law Departments Cut Costs by Sending Patent Work Abroad

By Jennifer Fried
February 01, 2004

Cheap foreign labor has long been a frightening specter for some American industries. But these days, garment makers and steelworkers are not the only ones competing with lower-paid counterparts abroad. Spurred by the slow economy, many in-house legal departments are cutting costs by relying less on U.S. outside counsel and more on lawyers in India, New Zealand, South Korea, and other countries where professional salaries are lower.

Some corporations and law firms already send copying, accounting, and other back-office functions to offshore providers. But bar association rules, among other things, make sending actual legal work overseas far more complicated.

Nonetheless, law departments have found ways to use foreign employees 'sometimes local attorneys, sometimes nonlawyers ' to handle such matters as patent prosecution, legal research, and contract drafting. While no one expects the American legal profession to be shipped wholesale to the Far East, the result could be less business for U.S. patent and litigation shops, and perhaps even large general practice firms. In fact, Forrester Research Inc., a Cambridge, MA-based market research firm, predicts that by 2015, more than 489,000 U.S. lawyer jobs, nearly 8% of the field, will shift abroad.

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