Maybe entertainment attorneys will go out on strike next. Because Hollywood is starting to outsource legal research, legal analysis, legal opinion and contract drafting services. Production houses like 20th Century Fox, Sony Pictures and HBO have hired an India-headquartered company, SDD Global Solutions, to handle the legal biz of their movie and TV releases, according to The Times Of India in a recent article. The newspaper says the Mysore-based legal process outsourcing firm has 40 attorneys and is owned by Smith Dornan Dehn, a Manhattan-based international media and intellectual property firm funded by Cisco Systems, Goldman Sachs, Merrill Lynch and Barclay's Capital.
Russell Smith, president of SDD Global, told the paper his firm is busy preparing arguments and counter-arguments to support some of the most complex legal issues in Hollywood. "We just signed to work on three global movie releases. We can't reveal the names now. We will handle pre-and post-production legal issues," said Smith, who is a U.S.-licensed attorney and litigator. These tasks include drafting copyright clauses, contracts, legal opinions and preparing documents for insurance cover, conducting research on potential legal issues, framing legal guidelines for filming, and visa processing for Hollywood actors, directors, producers.
SDD Global was recently chosen as a legal navigator for Virulents, a movie venture between New Regency Productions and Virgin Comics (founded by Richard Branson, Shekhar Kapur and Deepak Chopra), to be distributed by 20th Century Fox, the paper reported. SDD Global is preparing legal documents to rebut controversial defamation action against HBO's Da Ali G Show. And Sony Pictures is said to have tied up with SDD Global for a politically-tinged comedy involving leading Hollywood actors expected to be out in the first half of 2008. "The film involves dozens of complicated legal issues and our attorneys have logged 400 hours dealing with those. The movie got its final go-ahead only after we charted ways the film could be made with a minimum of lawsuits,'' said Smith.
According to The Times Of India, "Typically, hundreds of lawsuits and damage claims are filed against successful movies, popular reality shows and prominent animation series, and therefore insurance cover is given only for movies/shows that have sound legal contractual support. Getting all those legal requirements done in the U.S. can be terribly expensive, considering lawyers have to be paid between $450 and $650 an hour. In India, on the other hand, the same kind of work would be paid at the rate of $60-$100 per hour."
Yikes - $650/hr! And dealing in sensitive info with lots of personal data and stats passed around halfway round the world - not comfortable with that.
Comment by Stryker — November 19, 2007 @ 2:24 pm
“The film involves dozens of complicated legal issues and our attorneys have logged 400 hours dealing with those”
So about 90 minutes worth in the real world?
Comment by EEW — November 19, 2007 @ 2:39 pm
Not comfortable with the outsourcing to India, but it’s good for something to equalize the out of control usury by U.S. lawyers. Hopefully, this trend will continue so more Americans can afford legal representation. Access to the courts is a Constitutional right, and courts subsist on taxpayer dollars, yet attorney fees are so exorbitant only Corporations and the extremely wealthy can have their “day in court.”
As Mario Puzo said “A lawyer with a briefcase can steal more than a thousand men with guns.”
It would be more honest and straightforward doing business with Tony Soprano than it is with U.S. lawyers - legalized gangterism is far more dangerous.
Let the attorney outrage roll in. But this is cold fact.
Comment by AttorneyX — November 19, 2007 @ 3:39 pm
If there is anyone greedier than a Hollywood star, it’s a Hollywood lawyer. It’s like a shark pool with everyone grabbing for the biggest bucks they can make. They have formed an industry of feeding off of one another. While screaming how American they are but then making films anywhere but the USA, thus keeping production costs lower but moving all those jobs and money out of the USA. How can anyone care anything about them? Read a book instead. It’s cheaper than a movie ticket or cable subscription these days.
Comment by YumYum — November 19, 2007 @ 3:47 pm
Wow! Watch how fast Congress sets a few limits on Globalization now!
Comment by Another Hyphenate — November 19, 2007 @ 3:50 pm
The coverage of practice here cannot be as broad as reported. It would be illegal and impossible to use lawyers licensed outside of the State of jurisdiction (where the contract is written, executed signed, or where the contracting parties have their principle place of business, where the work will be performed, etc…)because each state prohibits the unuthorized practice of law. YOuhave to have a license in taht state to practice law there or give legal advice about that state’s law. New York lawyers, not otherwise licensed in California, could not even represent in California.
Perhaps they are only using india lawyers for india law issues. Or they will be availing themselves to indian courts whne they get their sorry buts sued- but I’d check further into the details before reporting as you have here. It doesn’t jive.
Comment by juice — November 19, 2007 @ 3:57 pm
Go ahead and bash the lawyers like everyone else does, but in the end this only hurts the artists (i.e., writers, directors, producers, actors) who will get scewed because some Indian doesn’t have the authority to change a provision in the artist’s contract that the artist’s lawyer could otherwise have gotten changed if dealing with a US based business or leagal affairs person who they have a relationship with after doind hundreds of deals with over the years.
I’m tired of the lawyer bashing… bottom line is we go to school for seven years and then work our asses of to protect the artists that we represent. There have been many instances in just the last month that because of my clients having me as their lawyer they ended up getting much more money then they otherwise would have recieved or not getting terminated off of a project. Point is most agents and managers don’t care about the fine points of deals and don’t understand them, but WE DO and in the end it’s that knowledge and experience that saves our client’s collective asses.
Let’s see some Indian do my job half as well as I can, won’t happen, this buisness is too complex and relationship oriented to be effectively outsourced. Somebody tell the Indians to stick to Bollywood movies and keep out of my turf.
Comment by Industry Lawyer — November 19, 2007 @ 5:37 pm
This is great news. Legal fees are ridiculously expensive. Let globalization affect everybody. Very positive for the consumer. Huzzah.
Comment by LAGuy — November 19, 2007 @ 6:37 pm
Actually the current practice is for big films of all stripes to outsource work to India, let a senior partner give it a brief read through, sign it and yet still charge the client $450-$650 per hour for all of it. Only recently have corporate counsel in other fields been catching onto this little game and asking for discounts.
The malpractice suits that will happen when these outsourced legal works are challenged in courts and do not withstand judicial scrutiny (because they didn’t anticipate the nuances of the US legal system which is just different enough from India’s for this to happen) are going to be interesting to watch.
Note to all potential clients (corporate and individual0…demand more detailed bills and time sheets than you have been in the past. And the biggest firms are the biggest outsourcers so client beware.
Comment by anonymous lawyer — November 19, 2007 @ 6:42 pm
On the one hand, I’m disgusted that legal work (on top of everything else) is being outsourced to India. Plus the fact, as someone else said, there’s a privacy issue when confidential paperwork is being sent around the world. But on the other hand, lawyers in America are WAY overpaid. Almost as overpaid as Shepard Smith who somehow manages to pocket $7 million a year for his show on Fox that nobody watches. Maybe if Hollywood stopped paying ridiculous amounts of money to actors and suits and lawyers and other hangers on, the movies might actually make a profit?
Comment by Francine Fishpaw — November 19, 2007 @ 7:14 pm
Wow. Where to begin? As Public Relations Officer for SDD Global Solutions in India, it looks like I’ve got my work cut out for me! The first thing I want to say, which is the “man bites dog” story that has yet to be picked up by the media, is that companies like ours are actually creating more work for U.S. (and Hollywood) lawyers, not less. In fact, to serve the needs of our clients, from India we’re hiring Hollywood and other lawyers as local counsel to work on so-called “sexy” litigations and other matters, which, if not for us, would simply have been settled, and never pursued, just to avoid exorbitant U.S. legal fees. For example, SDD Global has been hired to do the research and drafting for the motion to dismiss the Los Angeles libel complaint by “Jane Doe” against HBO, Sacha Baron Cohen and Da Ali G Show, where a plaintiff says she was defamed in that program. She complains that viewers actually believe that the fictional character, Ali G, had sexual relations with her, as if a cartoon-like, non-existent character can get you pregnant. If it were not for SDD Global, this case, like so many others, would simply have been settled, and the frivolous plaintiff would have been paid off. Instead, because offshoring to India has made litigation cost-effective, our client is responding to this bogus compaint with a motion to dismiss, and we are hiring Los Angeles attorneys to help out. This is Los Angeles legal work, which, without us, would not exist. The same scenario is replicating itself over and over again, because clients do not mind hiring U.S. lawyers, so long as the work that can be done in India is done in India. In fact, some law firms are embracing the change, and reaping rewards from it. One example is our parent law firm, New York-based Smith Dornan Dehn, which went so far as to set up its own legal outsourcing company in India, namely, us. As a result, the SDD law firm is receiving more revenues, not less. This is coming from (a) existing clients who send them “elective” legal work that otherwise would never be performed, due to cost, but which is not a problem when our U.S. lawyers are paid only to supervise and edit the work of attorneys in India, and (b) new clients who come to the firm only because of its reputation for developing an outsourcing alternative to the old model.
Regarding the various complaints posted by various commentators, I recommend that you check out the cover story of LexisNexis’s latest legal magazine, which features SDD Global and addresses all of these issues in great detail, at http://www.sddglobal.com/lexis_article_with_footnotes.htm . This article demolishes all of the myths we have heard against legal outsourcing to India.
Comment by Vidya Devaiah — November 20, 2007 @ 1:46 am
The key points are :
MYTH NUMBER ONE: Indian Lawyers Lack the Skills and Aptitude to Handle High-End Legal Work for the West
Attacks on the competence of Indian lawyers and law graduates are about as valid as saying that Indian software engineers are incapable of handling sophisticated IT work. To the contrary, the Indian IT industry is a world leader, and the same will be the case with offshored legal services.
A. Indian Legal Training vs. Western Legal Training
Legal education in both India and the English-speaking West serves essentially the same purpose – to train its graduates to “think like lawyers” and to teach them how to conduct research in the British-based, common law system. Western law schools, however, do not train students to practice law. A recent study conducted by Harvard Law School and LexisNexis reveals that 75% of U.S. law graduates admit they do not have the necessary skills to practice law. Interestingly, when young lawyers were asked what is the one thing that they wish they had learned, the most frequent answer was “how to draft a motion.” Yet, motion practice is at the heart of litigation services provided to clients by law firms.
Since Western law schools are mostly litigation-oriented, their failure to train students in the most basic of litigation skills is especially disappointing. However, clients who pay high hourly fees for corporate and transactional work by recent U.S. law graduates often are short-changed even further. It is typical for Western law students to graduate from law school without ever having learned how to draft a contract.
So you might expect that these deficiencies would be met by rigorous training programs undertaken by Western law firms. Guess again! The Harvard / LexisNexis study reveals that 64% of young lawyers receive no organized, on-the-job training. They learn as they go along, mostly by trial and error, with their firms’ corporate clients footing the bill.
By contrast, reputable legal services offshoring companies in India provide rigorous training for their lawyers, and the hours spent on training do not appear on invoices to clients. At SDD Global Solutions, for example, all of our Indian attorneys are trained by veteran Western practitioners who are at the top of their fields. Our training program accomplishes what Western law schools and many law firms have failed to achieve, namely, the systematic preparation of young lawyers to provide quality legal services.
B. English Communication Skills in India and the West
George Bernard Shaw, and later, Winston Churchill, famously referred to Britain and the United States as two countries “separated by a common language.” Because Indian legal education is conducted in English, and because India generates 80,000 English-speaking law graduates per year. Similar statements have been made about the difference between English communication skills in India and the West. What these accusations miss is the fact that, at least in the U.S., many law graduates are notoriously incapable of writing effectively in English. The problem is so severe that some large U.S. law firms now assign a writing coach to each incoming associate. However, most lawyers in the West never receive this kind of training. By contrast, reputable legal services offshoring companies in India provide training in English writing for all of their attorneys.
C. The U.S. Bar Exam vs. Indian Leaving Exams
In India there are no bar exams. Instead, Indian law students, unlike U.S. law students, must pass a comprehensive final or “leaving” exam in order to graduate. But in part because India has no bar exam, some commentators have suggested that Indian lawyers working for legal offshoring companies should be required to pass a certification test, to demonstrate their ability to provide Western legal services. This is an admirable effort. But who will develop a certification system for Western lawyers, many of whom lack skills needed to properly practice law? Regarding bar exams in the U.S., they are useless, except as a public relations device for the legal profession. As noted by New York University Law Professor Harold I. Subin, they test “nothing relevant to the practice of law”:
The bar exam…. is good public relations for the legal profession. Most people are unaware that the exam tests nothing relevant to the practice of law and therefore feel that the organized bar is protecting clients against unqualified lawyers.
The bar exam is the final degradation ceremony through which one must pass to join what is sometimes called the legal fraternity…. The term is apt, with the bar exam serving the same socializing purpose as hazing [known in India as “ragging”]: drinking in useless legal data is the profession’s equivalent of swallowing goldfish or great quantities of beer, and leads on exam day to a similar regurgitative result.
Comment by Vidya Devaiah — November 20, 2007 @ 1:48 am
MYTH NUMBER TWO: “You Get What You Pay For,” or in Other Words, Low Cost Equals Low Quality
The tremendous cost savings available from legal services offshoring are sometimes met with disbelief. Some partners at large law firms in particular are prone to making comments such as “you get what you pay for.” First, let’s examine what a client pays for when it hires the typical large Western law firms (although there are exceptions):
(a) staggering real estate costs, due to the location of office space in some of the most expensive locations in the world, most of which are at least 43 times more expensive per square foot than SDD Global’s office building in Mysore, India;
(b) having most of the work done by newly minted (and sometimes even unlicensed) associates who admittedly lack many of the skills needed to practice law, but yet are paid a starting salary of $160,000 per year, and who are learning as they go along, at the expense of clients, who in turn are charged as much as $360 or more per hour for the privilege;
(c) unnecessary stretching out of work assignments or sometimes padding of time sheets, structurally encouraged by an hourly billing system that rewards heavy hours and inefficiency, as young associates struggle to meet ever-increasing demands to increase their billable time, with yearly quotas that have risen from 1600 hours in the 1960’s, to 2100-3200 hours at many large firms today; and
(d) generally a high-quality level of service, due to editing and supervision by talented senior lawyers, but at a cost that clients are no longer willing to tolerate, especially when offshore providers offer flat rates and hourly rates that average from $25 to $90 per hour for high-end work, and $10-25 per hour for lower-end work, as compared to $300-2000 per hour for Western lawyers.
When a client hires a reputable legal offshoring company in India, whether directly or through a forward-thinking law firm that passes along the savings, the client pays for high-quality, efficient, and timely legal services, performed by enthusiastic and qualified lawyers at locations that serve the best interests of the client. So yes, “you get what you pay for!”
MYTH NUMBER THREE: The Higher the Level of Work, the More Risk of Ethical Violations or Breaches of Confidentiality
An issue sometimes has arisen as to whether the high-end legal research and drafting services provided to Western clients from India amounts to an unauthorized practice of law. This rapidly is becoming a non-issue. Ethics panels in New York, Los Angeles, San Diego, and Florida all have concluded that that the offshoring of legal work to unlicensed attorneys is permissible, so long as the work is supervised by a licensed attorney. The New York Times has quoted Stephen Gillers, a professor at NYU School of Law and legal ethics expert, as stating that “‘[t]here is no problem with off-shoring…because even though the lawyer in India is not authorized by an American state to practice law, the review by American lawyers sanitizes the process.’ ”
Comment by Vidya Devaiah — November 20, 2007 @ 1:49 am
In fact, virtually all major law firms in the U.S. routinely use non-licensed attorneys to perform legal work, and they bill their clients for it. The hours of summer associates, who have neither graduated from law school nor passed a bar exam, are billed out to clients at rates as high as $260 per hour or more. Moreover, the work of first-year associates, who start work at law firms before their bar exam results are in (and who often fail on their first attempt), is billed out to clients for as much as $360 per hour or more. This is all permissible, because the work is supervised by licensed attorneys.
The same is permitted in the case of legal offshoring firms in India. At SDD Global Solutions, for example, we are an India offshoring company managed by a U.S. law firm, such that all of the work by Indian attorneys is supervised, reviewed, and edited (if needed) by licensed U.S. attorneys. Several other high-end legal offshoring companies also have licensed U.S. attorneys on their payroll, or at least affiliated with the offshoring unit. Even where the offshoring companies themselves do not employ licensed attorneys, the work can be supervised by in-house counsel for corporate clients, or by Western law firms who act as intermediaries, hiring the offshore unit on behalf of their clients.
On the subject of confidentiality, this is a legitimate concern of clients, regardless of whether the legal service provider is a Western law firm or an offshoring company in India. Based on my experience both with U.S. law firms and the provision of legal services in India, I believe that quality offshore providers generally are doing a better job than U.S. law firms in addressing this issue.
For example, at SDD Global, we use secure, hack-proof IBM servers, and the latest Cisco ASA firewall to protect data and systems from internet vulnerabilities. Even more protection is provided by a Linux environment throughout our offices. Electronic access control is provided for all areas of the building, such that no one is able to enter any floor or project area without being specifically authorized to do so, and without using a custom-made electronic access card. Our offices are virtually paperless, and passwords are required for all data access. Most importantly, we take great care in selecting employees. We hire only one out of every 900 applicants, and only after a lengthy battery of evaluations and tests, as well as a thorough background check. SDD Global is not alone in this attention to security. As research analysts have reported regarding our industry, “vendors have invested significantly in systems and processes to ensure data security – often to a greater degree than their overseas clients.
Compare this with many U.S. law firms, where Microsoft-based networks are vulnerable to hacking, where paper trails abound, where employees are able to roam the offices at will, and where in one famous case, a person posing as an attorney was entrusted with the management of important client files, even though this felon had never attended law school or passed the bar exam.
Comment by Vidya Devaiah — November 20, 2007 @ 1:50 am
Hmmm. So US bar exams are worthless and don’t test any relevant knowledge? What about the PA bar exam? PA law *is* tested on it (in at least 7 different areas) which is *extremely* relevant to any attorney practicing in PA. Most other states’ bar exams test that states’ laws too. To support your claim, you cite *one* teacher at NYU. Might want to try to get a broader view before bashing US-attorneys.
As for you claim that the Ali G suit would have been settled without you doing the research on the Motion to Dismiss - these types of motions are very typical and any decent sized law firm would already have most of the research already done and would use a paralegal or 1st or 2nd year associate to do the final research and motion work.
Comment by David — November 20, 2007 @ 6:56 am
David, these types of motions are not typical. For example, the motion to dismiss the Frat Boys’ case involving the Borat film cost over a quarter million dollars. Due to outsourcing, the motion to dismiss the 8-count claim against Da Ali G Show will cost a flat fee of $40,000. Without outsourcing, this particular litigation work would not exist, and no Los Angeles attorneys would have been hired. U.S. attorneys are not being bashed. They’re being hired.
Comment by Chris — November 20, 2007 @ 8:15 am
Too many over-generalizations in Vidya’s posts to address them all, but here’s one I’ll take on:
Moreover, the work of first-year associates, who start work at law firms before their bar exam results are in (and who often fail on their first attempt), is billed out to clients for as much as $360 per hour or more.
I’m curious as to what support Vidya has to show that associates working for firms who bill their the work of their first-years at $360+ an hour fail often fail the bar. It’s true that the major virms (i.e., Vault 100) bill their first-years out at such a rate. But these firms also mostly hire from the top ten, or twenty law schools in the country — schools like Harvard, University of Chicago, etc. And at these schools 95%+ of the students pass the par on their first attempt (see US News’s Annual list of top law schools). So to suggest that law firms are billing inflated rates for employees who often don’t even pass the bar distorts the truth.
Sorry for the thread derailment…
Comment by WGA Member With a J.D. — November 20, 2007 @ 11:48 am
Actually, I think that it is a great thing that this work is being outsourced. As another person commented above, but I want to expand on, if this becomes wide-spread, I can guarantee that outsourcing will be reduced by a large amount…
As Vidia says above, without them getting involved, less legal action would happen. (I’m paraphrasing, bear with me.) A settlement would take minutes, whereas a motion takes hours (at best), and involves more court time. Therefore, the legal system in the US start getting even more cases. Then, with more and more legal research being done overseas, the domestic legal firms will have less incentive to hire local help - in this case, newly graduated law students. At best, the free market principle says that they will be paid less, but most likely less will be hired. Of those that are hired, more and more of them will be “mouthpieces” - people that haven’t spent any time on that case, except to read what has been prepared for them.
Eventually, you end up with a whole bunch of young, hungry lawyers not being able to find work at anything approaching the wage they need to make to pay off their student loans. The answer? Start agitating to stop outsourcing…
Eventually, an equilibrium will be reached, where a lot of the “busy work” of research will be performed overseas, but local talent will be the ones presenting it. In the mean time, a lot of lawyers that would have gotten jobs defending US companies that are sending manufacturing and support overseas are going to be out of work - and VERY few people will feel sorry for them.
Oh, and by the way, calling something “hack-proof” is the best way to be sure that it is attacked. If this article is widely seen, expect your servers to be hit hard…
Comment by Balentius — November 20, 2007 @ 1:21 pm
Vidya and Chris, I’m not sure whether to congratulate you on a very elaborate joke or to sympathize with you for the impending shutdown of your business by either the CA and NY bar associations…or by pissed clients with malpractice claims (since a reputable malpractice insurer won’t cover you).
Comment by JD — November 20, 2007 @ 1:35 pm
A motion to dismiss does not cost $40k, let alone $250k. At my billable rate, that would mean that I spent 200 hours working on it (for the $40k quote - which translates to 25 days at 8 hrs a day working on nothing else) or 1,250 hours (for the $250k quote - which translates to 156.25 days @ 8 hrs a day working on nothing else), including court time. There is no freakin’ way it takes that long. I know, I’ve done plenty of such motions.
This is over billing at its worse (by whomever quoted $250k and to anyone who would charge $40k). Large California law firms who handle entertainment/1st Amendment work have most of the research done and most of the motion already written - all they would have to do is do research on the particular issue and tailor the motion to their client’s circumstances. I can see this work taking maybe 10 hours at best. It is instances like this that give myself and other attorneys a bad name.
Comment by David — November 20, 2007 @ 2:10 pm
I completely agree with Juice’s comments about jurisdiction and state licensing, and I think that eventually, the State Bars will have something to say about this.
Regarding Anon Lawyer’s comment that firms outsource and bill as if a senior partner did the work himself, be it outsourced to India or a junior associate did the work, that’s fraud. Accordingly, if Anon specifically knows of such attorneys/firms doing this, then Anon is required to report such malfeasance to the State Bar. And if Anon fails to do so, then, he is just as deserving of censure.
As for outsourcing litigation generally, I think it’s a bad idea, and not just because it’s my meal ticket. The fact of the matter is that even in a case when there’s a vast document production (and I’m talking millions of documents), it’s still incredibly important to have ready access to the litigating partners, the clients, and the witnesses. You can’t adequately prepare a case without that.
I’m not saying legal fees can’t be exorbitant, but comments made by SDD’s rep should be taken with a carton of salt. First, $450+ is an amount charged by a senior partner, and rarely do they actually do initial work. They’re always doing more review, advising. It’s unfair to indicate that’s the across the board amount. And much of the real grunt work is done by paralegals and legal assistants, who don’t bill near that.
And you do get what you pay for. By that I mean not just experience, but reputation, eg Bert Fields gets his calls returned. A nobody from Podunk firm isn’t taken nearly as seriously, even if his case is just as solid as Fields’. Additionally, an Indian associate can’t (or least shouldn’t by law) know the ins and outs of a particular courthouse, judge, etc. Saying SDD hires “Local counsel” for LA is an outrage. Local counsel is a term used for attorneys who are often just messenger boys who can file papers but often have no substantive input whatsoever.
Finally, SDD’s rep is completely disingenuous for the recommendation to look at the Lexis article, as if it was written by Lexis itself. It’s an article written by SDD’s own Smith, and therefore it is obviously not an impartial analysis. If that is the SDD method of presenting facts in a legal argument, I fear for those who litigate with or against it.
Comment by CA Entertainment Litigator — November 20, 2007 @ 4:00 pm
Welcome to the real world. I just find it so interesting that lawyers are now part of the group of white collar jobs being outsourced to India…when all the other jobs were being outsourced most lawyers didn’t have a problem with it.
Well I’m glad to see the outrage and maybe something will be done to limited the abuse of outsourcing.
In solidarity…because I feel your pain.
Comment by bitter anyone? — November 20, 2007 @ 8:43 pm