A trend away from offshore work for patent firms is bringing jobs back to the Midwest.
A Minneapolis-based paralegal company is opening a new training facility here and beefing up its Rapid City operation to meet the growing demands of law firms that specialize in the field of intellectual property.
Black Hills IP plans to open the downtown Minneapolis office next week and expand its office of 30 in South Dakota by 25 employees over the next year.
The reason for Black Hills' growth? A trend among patent firms to sever their offshore outsourcing arrangements, particularly in India, said Chairman Leon Steinberg.
"The cost of labor in India is going up -- that's part of the trend -- and we're seeing greater productivity from U.S. workers in large part because of automation," Steinberg said.
Indeed, Black Hills' largest client, Minneapolis-based Schwegman Lundberg and Woessner, gradually reduced its presence in India and now does about 95 percent of its outsourced business with Black Hills IP.
"The cost of doing work in the U.S. is about the same as sending it to India," said Schwegman managing partner Steven Lundberg. "But keeping the work in the U.S. is a lot more convenient."
Lundberg said the firm went to India in 2000 when it couldn't find anyone in the United States to do proofreading because the economy was so strong.
Now, with automation, "U.S. workers are twice as productive," Lundberg said.
Black Hills IP provides paralegal resources to help attorneys in the patent application process, including keeping track of filing deadlines for patent applications, due dates for patent-protection payments and proofreading.
Cindy Eidnes -- division director of Beacon Hill Legal, a legal staffing service -- said she's hearing anecdotally that intellectual property firms are bringing their outsourced work back to this country, in part because of quality concerns and the time difference.
"Outsourcing to India is not the be-all and end-all that it was once thought to be," Eidnes said.
Jodi Standke of Talon Performance Group, a legal and corporate recruiter, agreed that overseas outsourcing is not as cost-effective as it used to be.
"But I also think there's a bit of patriotism at work here and businesses want to send a message that they are using U.S. people and U.S. resources," Standke said.
Most of the Black Hills management team is in Minneapolis. Steinberg, once with the Minneapolis law firm Maslon Edelman Borman & Brand, said the firm acquired the paralegal outsourcing business from Schwegman in May.
The Minneapolis office will serve largely as a training facility and provide some administrative services such as sales and marketing. Production duties are performed in Rapid City.
"We couldn't find enough people in Rapid City to do the training," Steinberg said. "There's a more robust community in Minneapolis than Rapid City when it comes to intellectual property."
David Phelps • 612-673-7269