Staff may sue City law firm for outsourcing jobs to India

A group of employees at Allen & Overy is threatening to sue the City law firm for breach of contract over its decision to outsource more than half its document processing division to India.

The firm told staff last Friday that about 45 of the 85 employees in its data processing division would be made redundant as the work was transferred to India's fourth largest city Chennai, formerly known as Madras.

Staff have been told that they must re-apply for their jobs and re-sit an interview if they wish to stay at Allen & Overy. The new outsourcing arrangements, which follow on from a six-week pilot scheme, are due to be in place by November.

A number of employees are now seeking legal representation to bring a claim of breach of contract arguing that they have no idea what the new jobs will entail or what the hours and salary will be.

There is also concern that outsourcing the production of what are often highly commercially sensitive and confidential legal documents could compromise security.

Allen & Overy advises on takeover deals and complicated restructurings such as the one completed recently by telecom equipment manufacturer Marconi.

The move by Allen & Overy makes it one of a growing number of UK firms to outsource operations to India and other developing countries. Companies which have already blazed a trail to India include BT, Tesco and Goldman Sachs.

An email sent to staff at Allen & Overy last week said the outsourcing move was "the most competitive business solution" for the document production division in terms of quality, service and overall cost effectiveness.

Steven Chernikeeff, head of operational services at the firm, said savings would be in excess of £1m and dismissed fears that security would be compromised.

"I have visited India myself and the conditions are first rate - the equivalent of western standards". He said that all documents would be sent by virtual private network, staff in India would be dedicated to working on Allen & Overy material and physical security at the offices was excellent.

He said he was not aware of any legal action by staff in London but maintained that the firm had followed "all due processes correctly".