LPO legal process Outsourcing

With Lehman Brothers going bankrupt, following the collapse of a series of other leading institutions, the financial sector is in crisis with jobs lost and markets in turmoil. But in the midst of this chaos, the legal service industry is quietly making an extra buck. The sub-prime meltdown in the US, and the rise in litigation, has increased the amount of legal work being outsourced to India. Revenues in the last six months have gone up more than 100 per cent, according to heads of legal process outsourcing companies in India. Because of rising costs, “companies are actively looking outsource to India, where legal work costs one-tenth of what lawyers charge in the US,” says Sirisha Gummaregula, COO of Quislex. If one company is satisfied with the results of a particular firm, word spreads. “Acceptance by the client and client-referrals have made a big difference to the sector,” she says. Added to that is the fact that with each passing year, legal costs go up at a rate of 5-6 per cent a year, says Alok Aggarwal, CEO of Evalueserve. Agrees Sanjay Kamlani of Pangea3: “Recession and the events leading up to it have created a lot of additional legal work for Indian firms.” This includes legal analytics, litigation, electronic discovery, due diligence work, risk assessments, research document drafting, bankruptcy, filing and processing. “With Lehman Brothers, we are looking forward to more bankruptcy and M&A related work coming our way as the recession sets in. “We’re definitely going to be working with companies like Lehman, Merrill and Morgan,” says Anthony Alex, VP, legal services at Pangea3. Now, Indian lawyers aren’t stuck with just the menial paperwork; India-based outsourcing firms are now “strategic consultants” to US- and UK-based companies that are going bankrupt or are involved in mergers and acquisitions. “The variety and complexity of projects is changing as clients move from successful pilot projects to longer term engagements, definitely a step forward from 18 months ago,” says Matthew Banks, senior VP, legal services, Integreon. First came the BPOs (business process outsourcing) taking the country by storm, and then the KPOs (knowledge process outsourcing). Legal process outsourcing (LPO) was the last service-based industry to hit the Indian market in 2004-05 because legal services is a more conservative industry and requires more personalised client-lawyer relationship. Because legal work is usually ‘confidential’, trust plays a very important role, say experts. “This trust came from our KPO experience which proved our management, infrastructure and process capability,” says Banks. However, not all is hunky dory for Indian LPOs. “The hype is bigger than the phenomenon,” says Aggarwal. “Of the 115-odd LPOs in India, top US and UK based companies offshore their documentation to only about 15,” he adds. “The English written and spoken by most Indian lawyers is very ‘Indianised’. So it is better than outsourcing to China where they don’t speak much English, but still not as good as local law firms in the US,” Aggarwal points out.