The Australian legal profession is in “danger of killing the goose,” according to NSW Chief Justice James Spigelman. Speaking at the NSW Law Society’s Opening of Law Term Dinner last night, Justice Spigelman said the legal profession needed to control the cost of legal services to remain competitive. 

“International trade in legal services is not a one-way street,” he said. “Solicitors who are members of this society may not all welcome the process of liberalisation of the market in legal services. You will, however, need to adapt to that development.” 

He said corporations and individuals who purchase legal services were increasingly subject to cost pressures and would look elsewhere in the region for a better deal. “The outsourcing of legal services through the use of electronic communications is now well established,” he stated. “Many of them are in India, a low-cost jurisdiction – with hourly billing rates about one tenth of those in the USA – and a high level of expertise and high level English language capacity.”

Spigelman said evidence of this growing trend could be seen in the decision by global mining company Rio Tinto to move a major part of its contract writing and review team from London to New Delhi, by engaging an outsourcing company. “This is high-end legal work, not merely legal process outsourcing,” he said. He went on to say that India and its legal practitioners will soon constitute competition for all commercial lawyers, not just the major law firms. “Just as outsourcing has changed many other spheres of commerce, legal outsourcing will change the way law is practiced,” he said.

In conclusion Spigelman said the Australian legal profession had a reputation for quality and impartiality, but it was its engagement that needed work: “Only by active involvement on a board front can we change the global reputation of the Australian legal system and of Australian lawyers,” he said.