Has pricey Vancouver become a low-cost legal offshoring destination? It’s not exactly obvious, but if the alternative is high-cost British or American talent, Vancouver might be a relative bargain.
Earlier this week, Freshfields Bruckhaus Deringer — the U.K.-based international legal powerhouse — signaled a strong possibility that it will be setting up a legal services hub in Vancouver later this year, where paralegals and back-office staff will handle such work as e-discovery, due diligence and forms drafting.
As first reported in The Lawyer, Freshfields executive partner Michael Lacovara hinted that the firm will be hiring around 30 paralegals to create a facility that takes advantage of Vancouver’s Pacific time zone and deep pool of talent.
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Freshfields declined comment for this story but Lacovara confirmed over e-mail that the firm is planning to launch a hub somewhere in North America: “The demand from our clients and people means that we are now planning to establish a Global Centre in North America.”
If the hub is set up in Vancouver, it will be Freshfields’ second such facility. The first one, now employing upwards of 300 paralegals and legal assistants, launched late last year in Manchester, England.
Lacovara told The Lawyer the firm would be particularly interested in recruiting Vancouverites with Mandarin-speaking skills: “The mix of work will be relatively similar to the Manchester office, though we will get a better Mandarin-speaking capability so it’s likely some of the work will come from different parts of the firm.”
Richard Stock, a Vancouver-based legal consultant, says an offshoring facility in the city would actually be a smart move, although he doubts the firm intends to set up downtown.
“Lots of firms have done this kind of outsourcing, but there’s just no logic for this being in the most expensive real estate in the city. London firms have typically done it in suburban areas — 40, 50, 60 miles up in the Oxford area,” he says. “They could put this one out in Surrey [B.C.], or the suburbs. Richmond makes a lot of sense.”
Stock suggests by bulking up on paralegal work in the Vancouver area, Freshfields can shift away from more expensive capacity in the U.K., while simultaneously improving overnight turnaround times to South American, Asian, and west coast clients.
Moreover, as law firms move toward alternative and fixed-fee arrangements, they’re far more likely to use paralegals, whose rates are tied to the fixed fee and not billed hourly.
“If you want to compete on an alternative fee model, then having an offshore, dependable critical mass of folks to do this stuff makes a lot of sense,” he says.
There’s another important reason to choose Vancouver over other cities on the west coast, Stock notes.
“The differential on the Canadian dollar makes it really much more interesting to put it here than anywhere in the states. You’re saving 30 per cent right there.”
And while the entry of a major player like Freshfields in the “document review” space may suggest increased competition, he says Canadian firms have little to worry about.
“I don’t think it’s to compete with anything Canadian whatsoever,” says Stock. “I think they’re just looking for a swell spot that’s not the Cayman Islands.”