Legal Eagles could be India’s next knowledge exporters
June 18, 2009
Last month, a libel suit won in the US with the help of Mysore-based SDD Global Solutions became a watershed case for the fledging Legal Process Outsourcing (LPO) industry, making a new inflexion point in its growth. A bulk of the paper work for the litigation against HBO’s ‘Da Ali G Show’ was carried out in India. The back-end Mysore team of five lawyers was led by U.S. Attorney Russell Smith. And they won!
The question is: How did it come about that a legal system that is so ridden with inefficiencies; and is possibly the slowest and the most corrupt in the world, has suddenly begun to burn midnight oil (virtually) and keep vigil for the legal systems of the most developed world?
The question was answered about a decade ago by author John Hewko, who based on his research concluded that a developing country’s legal system was of little relevance to the outsourcers. What mattered more was the state of the host country’s legislature and bureaucracy. Besides, “the existence of real business opportunities” and the overall visceral perception”of the environment.” And therein hangs the tale, or the mystery, of how India, despite the pitfalls of its home system continues to be the book keeper for the rest of the legal world.
Tasks from the preparation of simple documents, to filing elaborate patent application forms and appellate briefs are increasingly being outsourced to Indian vendors. In 2004, Forrester Research estimated that 12,000 legal jobs were being outsourced to law firms abroad, and by 2015, it is estimated that he number might climb to 80,000. Of course, no one had factored in the effect of the slowdown then! (more on this in our next post, so stay tuned!)
How it started
In Outsourcing and the Globalizing Legal Profession (William and Mary Law Review, Vol. 48, 2007) author Jayanth K. Krishnan mentions that among the first of the U.S. companies to outsource its legal work to India was General Electric. GE reportedly saved a whopping two million dollars in the process! This example was quickly followed by DuPont and later by West, a subsidiary of The Thomson Corporation. Simultaneously , a slew of recession-challenged American businesses began to hire Indian law firms, such as Mumbai-based Nishith Desai Associates for their routine tax planning functions in order to cut costs at home. Meanwhile, several Silicon Valley law firms began to hire Indian lawyers to write patent applications for their clients abroad.
Last but not the least, third party vendors (or LPOs) like other specialist BPOs have begun to serve as effective intermediaries between American corporations and law expertise in India. One entity Lexadigm for instance prepare case material for a Fifth Amendment lawsuit to be filed in the US Supreme court, based on the spade work done by India lawyers, as reported by N.Y. TIMES on Jan. 13, 2006.
The key driver
Economics as ever is the key driver for this industry. As per one estimate, while filing complicated tech patent applications can range from $8000 to $10,000 in the Midwest and up to $12,000 in Silicon Valley outsourcing the job to India costs just $5000 to $6000. Small wonder that over fifty legal outsourcing vendors have entered the booming industry since 2001, according to one study. Other reports indicate that India receives $60 to $80 million a year from outsourced legal business. Future projections are that this revenue will grow tenfold by 2010 and by 2015 will exceed $1 billion.
Recently, US-based CPA Global, an LPO firm has announced its third centre in India that is likely to hire some 1,450 people over the next two years.
Apart from the litigation work, these firms are also engaged in providing intellectual property (IP) support services such as drafting, contract reviews, patent searches and applications. With the slowdown, work is also projected to come work in the domains of compliance, foreclosure, bankruptcy and litigation is likely to grow in the coming months.
(To be continued…. Next: The road ahead could be long and winding)
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Can someone suggest what needs to be done to start a LPO operation in India? I am a lawyer and I want to learn more about starting LPO in India?
Thanks
I’ve been reading lot of news about LPO lately? is there a real opportunities for LPO in the near future? How do you setup a LPO operation in India?