While Law School Enrollment Drops, Outsourcing Surges

According to the American Bar Association’s latest findings, law school enrollment is down 11%, or 5,000 students from last year. Many bloggers, and legal news outlets have somewhat ironically blamed this on the negative media attention law schools have gotten over the last few years. But that’s selling graduates a bit short. If the potential benefit of a six-figure investment isn’t all that clear, I doubt a blog entry will be the deciding factor. So it begs the question: what is to blame?

In her WSJ blog article on the drop, in which she pointed out that enrollment numbers are now hovering around those from 1977, Jennifer Smith writes in passing, “some lower-level legal tasks that firm associates used to do, such as document review, are now increasingly farmed out to contract attorneys or legal outsourcing companies that can do the work more cheaply”. And though brief, she has touched on one of the major challenges for new members of the J.D. club. In 1977, new lawyers were competing amongst each other for jobs. Now, they’re competing with the rest of the world. And in many offices ranging from Mumbai to Bangalore, the rest of the world is winning.

Legal Process Outsourcing (LPO), as it’s officially been named, has nearly doubled in the past few years, going from a $640 industry in 2010 to worth over a billion dollars in 2012, according to the LPO Program. Experts predict that it will continue to grow as providers set up shop in Latin America and former British colonies with similar English Common Law justice systems. A 2012 report on the industry from Professor Mary Lacity of the University of Missouri and Professor Leslie Willcocks of the London School of Economics argues that because of a fragmented legal industry stateside and many untapped countries as possible LPO providers, “the potential global LPO market is enormous”. “Just considering the US market”, the paper adds, “the legal services industry is worth about $245 billion”.

“the potential global LPO market is enormous”– Legal Process Outsourcing: LPO Provider Landscape

For the most part, the ethics of outsourcing have already been decided. In 2007 and 2008, when LPO first burst on the scene with national media attention, various state bar associations along with the ABA blessed the fledgling industry. But there is still the question of how far it can go?

If you’re thinking that this is another case of overseas contractors doing grunt work, you’re wrong. While some would be happy to skirt the tedium of legal discovery and document review, LPO providers like Pangea3— a recent recipient of the provider-of-the-year-award– assists US firms in everything from corporate contracts to intellectual property agreements, falling just short of performing the actual attorney responsibilities themselves. For a law school graduate looking at one of the most dismal legal markets in recent memory, those jobs aren’t anything to sneeze at.

So what’s a young lawyer to do? Do we lasso the industry through regulations, or let entry level positions go the way of the automobile industry? Or the manufacturing industry? Or the information technology industry? I don’t have the answers to these questions. But in light of the precipitous decline in law students this year, let us not scratch our heads in confusion as we wonder why nobody wants to be a lawyer anymore.

[ABAJournal]

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Featured image courtesy of [Michael Fernandes via Wikipedia]

Jimmy Hoover

Jimmy Hoover is a graduate of the University of Maryland College Park and formerly an intern at Law Street Media. Contact Jimmy at staff@LawStreetMedia.com.