Outsourcing – Offshoring
DuPont, if not the leader, certainly is getting most of the press about this hot issue. In a recent Business Week (September 18, 2006) article, it was reported that DuPont has combined with OfficeTiger (with offices in the Philippines and India) to cut its legal expenses.
Offshore document management of evidence in product liability cases and monitoring old contracts and licensing agreements has become a major effort for them. DuPont’s estimate is that it will save 40% to 60% of its document work and up to $6 million of its $200 million legal spending.
Sending files oversees for the purpose of imaging and analyzing can also save storage costs. With real estate prices still rising, this can be another benefit of offshore outsourcing.
DuPont estimates that it has saved over $100 million since 1990 through automation, outsourcing and convergence (reducing the number of law firms with which it deals). DuPont is stepping up the pressure. It estimates that 70% of the labor in a typical products liability case. If DuPont is charged $150 per hour for paralegals’ review of documents in the U.S., and the same review can be done for $30 offshore by a licensed attorney, that can be turned into a considerable savings with little or no sacrifice in quality.
Here are some interesting statistics highlighted in the article:
1. Cost reduction — Cut expenses by more than one-half. Could that reduce the pressure on DuPont and other such defendants to settle cases? If the expense of litigation is reduced, then the fear of the outcome might be lessened … and the desire to fight increased.
2. Speed — With manpower available around the world (around the clock), the time to process evidence might be reduced from 18 months to 3.
3. Streamlining — Converting tons of old records now in warehouses into digital form, coded and indexed, will make it easier to search and use.
Absolutely incredible advances in technolgy and communications make all this possible. Of course, it also takes considerable foresight on the part of DuPont’s legal department. One heretical thought: What would happen if DuPont didn’t manufacture products that resulted in injuries necessitating lawsuits?Tags: Cash Flow - Finances
Categorized in: Cash Flow - Finances