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April 01, 2004

Trendy Outsourcing (or Are Management Consultants Really So Smart?)

Pointing to failure of Dell's Indian customer service call centers, Instapundit posits that the outsourcing bubble may be bursting, and specifically that "[o]utsourcing makes sense sometimes, but I think it became a bit of a management fad in recent years."

I friend recently relayed to me his first-hand knowledge of a very fancy-pants management consultant firm that was providing strategy advice to a law firm looking to increase its profitability. The gist of the advice: Send all of the law firm's high volume work -- such as document review -- to India, and thereby increase margins.

Having worked at a blue chip law firm, I can't think of anything more likely to turn off a client. Imagine this line coming from a lawyer to his Fortune 50 client: "Yes indeed, we've determined that your work is so important to the firm that we're sending it to India to be done by some very smart folks who speak English as a second language." My sense is that top corporations use elite law firms because they (sometimes justifiably) believe that they're going to get elite service from some of the smartest, most well trained and most aggressive lawyers around. Outsourcing a client's work to India would be one of the surest ways to undercut this primary selling point. Whether one is to conclude that outsourcing has become a fadish management strategy, that management consultants sometimes aren't worth their exorbitant fees, or a bit of both, is up to you.

Posted by Old Benjamin at 08:32 PM | Permalink


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