Senator Schumer, Friend or Foe to LPO?
June 8, 2010
Everyone has their opinions and they are entitled to them. Funny thing is when you or I broadcast an opinion it doesn’t quite garner the attention as it does for politicians. And at times political opinions gather steam, and if the public’s opinion is also behind it, it could affect the law of the land. One of these movements which strike close to our LPO hearts was brought to the public’s attention last week by New York State Senator Chuck Schumer (D). Senator Schumer’s announcement to propose an excise tax on outsourced call center activity kicked off a debate that may have ramifications for the entire outsourcing industry, including legal process outsourcing. However, contrary to the obvious, my sense is that his proposal is something of a blessing in disguise, for outsourcing in general and LPO could remain unscathed in the long term.
There’s been considerable discussion since his announcement of his proposed $.25 tax on phone calls transferred to offshore call center operations. It would not be a stretch to think that similar proposals could evolve affecting law firms and legal departments who use offshore legal process support. Already critics have chimed in on just how infeasible such a protectionist measure can be. It remains to be seen whether or not his proposal will gather enough steam to make an impact on legislation. Even if it does, it may take further time to evolve into a law affecting legal process outsourcing. But nonetheless, yet another force we have to be cognizant of in participating in LPO.
At one time such a proposal would have really grabbed a lot more headlines than it has so far. And you would think given the “Great Recession” we find ourselves in that it would also be the case now. Besides, it arguably helped Obama on his campaign trail. It helped him with certain sectors of voters. But at the end of the day, economic forces and the need to continue to drive profits in the corporate world wins out. I’d have to think that there are some corporate opinions (and some fat wallets) which may ultimately drown out the Senator’s proposal.
Also, we may look back two or three years from now and thank the Senator for proposing such legislation. Why? Well, because it sparked a familiar debate that in the end may very well confirm what we’ve already learned from the past. When one looks at protectionist movements, they look and feel and sound like a great idea at the time. Our lessons tend to tell a different story. The inevitable at times cannot be forced.
Oh yes, by the way, when is the veteran Senator is up for re-election? Funny how opportunity presents itself doesn’t it?
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4 Responses to “Senator Schumer, Friend or Foe to LPO?”
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The senator’s proposal may have arisen out of concern that the continuous growth of business process outsourcing, including legal process outsourcing, may take away jobs from the United States. While his concern is understandable, the protectionist proposal is contrary to liberalized trade which is ultimately beneficial for everyone. BPOs are driven by the goal of companies to improve the quality of their services amid competition at a lesser cost. Outsourcing enables companies to focus their resources on their core work. At the same time, outsourcing employs millions in several countries, including the Philippines. See http://www.americandiscovery.com.
The advancement of a country lies within how they deal with working with the world as a team and working for everyone’s benefit. This alone I believe can earn a profit to any developed nation in today’s world.
Several small businesses in US need good legal help. The lawyer cost is going up every year. I’m sure LPO would definitely benefit small businesses in growing their companies.
It has been clarified by economists and many propagators of legal outsourcing that this trend actually helps to create more work in the US in the legal market.
By making litigation more affordable, the sheer increase in the amount of litigation reaching the final stages (instead of just reaching the settlement stage) would be worth it. Russell Smith, who manages SDD Global Solutions, http://www.sddglobal.com/ – a high-end legal outsourcing firm – expains this in great detail. http://cityroom.blogs.nytimes.com/20…comment-727079.
(“outsourcing actually creates more legal jobs in the West, rather than cutting them. Every time a deal is done, or a litigation is waged, because legal services are suddenly affordable, it means more work for the Western lawyers involved in supervision, editing, negotiating, and/or appearing in court”)
He explains other benefits of legal outsourcing too. http://www.lawwithoutborders.typepad.com/
This is much like how the globalization steam a few years back scared the developing countries. Later, their fears were found to be unnecessary.