Lawyers will get the boot in numbers...and they won't see it coming

Outsourcing has been the go to tool for a lot of corporations to cut costs and associated headcount. There are countless industries which have been using  outsourcing effectively in their battle to increase efficiency while reducing costs.

One industry which has been spared from the outsourcing craze has always been the business of law.

Of course...there are some specialized functions which  a few law firms are outsourcing...but the movement is muted at best. The quality of the legal work outsourced has to be top notch...and it remains a risk to outsource to destinations like India, China or the Philippines.

That some law firms are doing it never the less is perhaps more due to the need to reduce billable hours  (driven by their clients) than the belief that quality will remain unaffected.

At hourly rates of  $ 350 and  for Associates and going as high as $ 1000 for partner work clients are understandably more than ready to use any option at their disposal to reduce fees.

The legal  industry is ready for a shakeup....and it looks like Artificial Intelligence (AI) will be the one who will do the shaking. IBM's Ross (powered by Watson)  and its peers are making great strides in revolutionizing the business of law.

It  is a matter of years now when Watson will go through thousands of documents in a matter of minutes. Due Diligence where a team of lawyers shifts through thousands of pages at snail pace might be a thing of the past much faster than the legal industry realizes.

Other areas on the chopping bloc are contract law, legal research , e-discovery and document automation.

 The article below makes a good case that the best years for the business of law might be behind them. Read Here: Technology Will Clam The Work Of Senior Lawyers

The Legal Industry might not go the way of the phone book....but it might very well end up being a situation where better quality will be produced with much less lawyers.

Which Is Better...An Actively Managed Or Passively Managed Outsourcing/BPO/KPO Relationship?

When setting up an outsourcing relationship one of the decision which has to be made (and arguably perhaps the most important one) is how to  manage the outsourcing relationship.

A lot of companies (in particular smaller and midsize)  are really not considering the different approaches as to how to manage and utilize the relationship. 

There are two distinct approaches to managing an outsourcing relationship. One approach is to utilize the Passively Managed Approach...the other one is the Actively Managed Approach.

There are advantages and disadvantages to both. 

The characteristics of the different approaches can best be described as follows:

Passively Managed Relationship (PMR):

The approach is characterized by having a defined (non dynamic) responsibility the outsourcing provider is tasked with. It is chosen because the client wishes to utilize the expertise and competency of the outsourcing provider in a defined field. The client utilizes the organizational knowledge available. 

The scope of the relationship is contractually defined  and as such Key Performance Indicators (KPIs) can be set.  By using easily quantifiable KPIs benchmarking and evaluation is easily achievable.    

Actively Managed Relationship (AMR):

The responsibilities using the AMR approach are rather loosely defined. Instead of hiring the outsourcing provider to benefit from their organizational knowledge (expertise in certain processes) the client hires workers with certain qualifications. 

These workers  are then tasked dynamically to satisfy the needs of the clients. The tasks assigned will change throughout the duration of the contract as per the client instructions. Because the relationship has not been clearly defined during the contract stage KPIs are most often not easily identifiable. 

Which Model To Choose:

When reviewing the two different approaches to manage the relationship it is helpful to identify what drives the need for the AMR versus the PMR. 

The PMR has been the favorite of corporations for the longest time. Not a lot of companies wanted to utilize the AMR model. Corporations like the PMR model because it makes everyone accountable. KPIs are properly defined and expectations can be measured against the KPIs. 

However..this has been changing over the past few years. 
The AMR model has been gaining in popularity.

The driver behind an increased adoption of the AMR model has been the increased pace of technology changes forced upon corporations. Simply put....the need to adapt to changing technology trends has rendered the PMR model often times useless for a lot of corporations. 

The emergence of the cloud and the digital marketplace have greatly increased the pace at which technology changes have to happen...and a PMR is often times not capable to keep up with the change in requirements.

The need to evolve is what has been forcing companies to adopt the AMR model. 
Of course..there are also challenges which come with it.

I believe there are two distinct disadvantage  utilizing the AMR model.

First of all the lack of KPIs makes it not as easy to evaluate if the relationship is working well. Expectations cannot be measured against results as in the PMR model.

Secondly, there is a need for greater management involvement by the client. In order to make the outsourcing relationship work using the AMR model the client has to integrate itself more closely into the day to day operations of the outsourcing provider. As the name suggests...Actively Managed Relationship (AMR)   truly means more active involvement.

At the end of the day it comes down to what the client(the corporation) needs. If the client believes there is real need to be dynamic and respond to changing technology trends then the AMR model is the way to go.

The need to stay involved from the client side and the relative lack of KPIs is a small price to pay if the results are delivered. 

On the other hand..if all what the client needs is the expertise an outsourcing provider can deliver pertaining to a defined area of responsibility...then the PMR approach is the way to go.  It certainly is easier to manage from the clients perspective.

Is The H1-B Visa Festival Finally Going To End ?

H1-B Visas are a tricky subject. They are given out in a limited number per year (65,000 is the cap for 2017) and are sought by corporations in order to bring in what is considered specialized labor which cannot be found locally.

There are several restrictions associated with the application process....mostly designed to prevent the H1-B visa worker form taking over the jobs of US workers.

The problem is that there have been numerous cases where workers have been exchanged against a (presumably) lower paid worker who was brought in with a H1-B visa.

The practice has been always been viewed with disdain but it looks like there are a few things happening which might limit the appeal of H1-B visas in the future...or at least it won't be that easy anymore to exchange workers on a 1 to 1 basis.

One meaningful change to the law which is in the works is that workers will be able to contest their firing if they believe they are being laid off and being exchanged with a H1-B visa employee.

This is what seems to have happened at Abbott Labs in April 2016.  Apparently 150 tech employees were let go  and on the way out were asked to hand over their security credentials to newly incoming H1-B workers.

Of course every employee had to sign a Non Disclosure/Disparaging Agreement in exchange for details are hard to come by.

For more details read: Abbott labs lets 150 people go

One employed though did not sign the agreement and is speaking up. Consequently it now looks like some politicians  have picked up on the issue and are going to strengthen regulatory oversight.

Given the current political climate this should hardly come as a surprise.

Given the abuse in the H1-B program additional regulation might be a really good thing.

Regulations of course might not do the trick if the abuse is fraudulent.
Fraudulent abuse like the one initiated by Infosys and fined in 2013  is obviously much more serious than misuse and might deserve more scrutiny.

For More information read: Infosys pays record 34 Mio fine for immigration fraud

At the end of the day it will require a combination of better regulations and enforcement of existing laws to plug the hole through which the system has been abused. Corporations need access to talent and hopefully revisions to the law will not change that. At the same time US workers should also not be let's hope that lawmakers will strike the right balance.