The article Outsourcing and the Globalizing Legal Profession(Krishnan, 2007) stated that the outsourcing of United States jobs to third world countries like China, India and other low –wage countries for some quarters, specifically those who have lost their jobs to the outsource destinations like the Indians and the Chinese. However, many free trade movers strongly emphasize that outsourcing is very good for the United States Economy. The following paragraphs will explain this introduction further.
To explain the above introduction, corporations desire to take advantage of outsourcing in order to pay lower wages and thus increase the over –all net profits (sales less expenses and costs). In this article, the author zeroes in on the legal outsourcing profession. Further, many quarters opined that the characteristics of the legal profession is similar to the outsourcing of other job types like call centers, production of goods and services and the information technology sector.
Professor Jayanth K. Krishnan, the author of this article, states that India’s receiving of increasing legal jobs from the United States is really doing only a portion of many legal jobs available. In fact, India has been receiving many forms of legal outsourcing models. However, Professor Krishnan believes that the Indians look at legal outsourcing in the words ‘delay –ridden, backlog, and unreasonably expensive’ despite the high salaries that these legal outsourcing workers are paid. Advantageously, the help that the Indian legal workers do for the United States justice system has also precipitated to a better legal system for India.
Even though, the surface seems to show that legal outsourcing to India does not influence the Indian legal system. Thus, the legal sourcing workers in India have an economic incentive to do their share to improve the current Indian legal system. Furthermore, Professor Krishnan emphasizes that the US legal outsourcers must be charged a minimal fee in order to raise funds to fund India’s legal reform activities. Professor reasons that since the strengthening of the Indian Legal system is in the best Interest of the U. S. egal outsourcers, the American investors to the Indian Outsourcing industry is compulsorily bound to pay some of the cost of improving the Indian legal system.
The author, Professor Krishnan, made very realistic and down to earth sense in his macroeconomic argument. For, the professor’s argument is adequately supported in the article. Also, I do not agree with the article. Further, I learn a few things in this article. finally, it awakened me to the magnitude of the outsourcing industry which is a macroeconomic topic. For, the professor’s argument is adequately supported in the article.
Macroeconomics enters the picture because the labor component of the daily operating expenses of US companies has been reduced because the Indians are paid very much lower than their US labor counterparts. A decrease in labor cost will result to a possible lowering of the US outsourcing company’s selling price and an increase in net profits of the US outsourcing company. Likewise, the lowering of selling prices will surely increase the demand for the company’s products as explained in our basic economics course textbook The Macro Economy Today tenth edition by Bradley R. Schiller. On the other hand, I do not agree with the article.
Because, I believe the Indian outsourcing companies should not charge an additional amount on the US companies because the legal system in India is a political and not a business event. Meaning, The US outsourcing companies are paying for the labour wages only of hired Indian outsource workers. The US companies are no required at present and should not be required in the near or far away future to pay additional ‘political’ fees like what the author suggests. Further, I have learned a few things in this article. First, I have learned that as the prices of goods decrease because they were outsourced by the US companies to save on labor costs.
Second, I have learned that the US legal system is synonymous with delayed work and low wages for the Indian outsource workers and a corresponding low wage costs for the US outsourcing companies. Also, I have learned that the Indian justice system is not as smooth or organized as the US legal system. Finally, it awakened me to the magnitude of the outsourcing industry which is a macroeconomic topic. For, macroenomics deals with economic transactions between two or more countries. I realized that it is good and bad for the UK economy for multinational companies now outsource from many developing countries (like China and India).
It is good because the public can buy the same quality products at lower prices. It is also good because lower labor cost will increase net profits. It is bad for the UK labor sector. Outsourcing has changed the labour demand in the UK. It is also bad for the competitors because the outsourcing companies can lower their selling price in order to increase the demand for their outsourced products(Barrell, Choy and Kirby 2006; pp 63 -67). Thus, outsourcing is a very good macroeconomic strategy for the US companies to decrease labor costs and increasing profits.