The long and winding road before Indian LPOs
June 22, 2009
One of the biggest challenges before Indian LPOs relates to data security.
One of the reasons SpectRx Inc., (Guided Therapeutics) a Georgia-based manufacturer of medical devices decided to pull out of India. As the in-house counsel for the company Michael Lasky explained, “[t]he Indian legal system is close to nonfunctional … [t]here’s a wide open risk.” He did not explain it any further but the risk lies in the US courts inability, should the need arises, to enforce confidentiality agreements at the offshore site that clients often insist upon.
Although unlike SMEs in other sectors, small LPO players in India are finding the current downturn “a blessing in disguise” due to the load of litigation work coming their way from the US, over a long term, this boom may not last long, if there is no guarantee of data security to clients. Due to the sensitive nature of work that a lawyer handles, this in fact is a more serious challenge in the LPO space than with other BPOs.
As it is, low-end LPO is already affected. Business is down 20% with low-end services like online research and documentation being the worse hit, according to one report. Any law firm worth its salt would not like to invest in India if it is less than confident that its sensitive case files would not be adequately protected.
“If the ‘low perceived benefit’ of outsourcing legal services amongst law firms is not addressed, it could stunt the growth of the Indian LPO industry,” says one expert, which could be one reason why in the final analysis, only 3% of law firms in the UK and the US have begun to offshore their back-end work to India. This is a significant opportunity lost as according to one estimate; the market for legal process outsourcing is expected to reach anything between $640 million and $1.5 billion.
“India needs to invest in people, technology and process to offer a complete set of services across the full value chain,” said Matthew Banks, Senior Vice-President, Legal Services, Integreon, while speaking at session on ‘India as a destination for legal services’ during a BPO Strategy Summit held in India last year. Another expert addressing the same gathering, Shuva Mandal, Managing Partner, South India, FoxMandal Little, said, “Lack of marketing and data protection laws” are major roadblocks for Indian LPO vendors.
Finally, as Jayanth K. Krishnan suggested in Outsourcing and the Globalizing Legal Profession (William and Mary Law Review, Vol. 48, 2007) “irrespective of how the good governance fee is framed, for the interests of American businesses to be protected, there must be changes made in India’s legal process functions.”
Only then will we be able to tap the full potential of this sunrise sector.
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Thanks for the info about the “The long and winding road before Indian LPOs”..
We Adodis also in this outsourcing business for the past 10 years and in these years, I saw loads of ups and downs in this outsourcing – mainly in website outsourcing..
Due to this recession period, now most of the clients likes to do offshore where they are pretending to do onsite projects…
We have done more than 300 projects from last 3 quarters and we are expecting this to be high in peak this quarter…
And we are ready to take any number of more projects
With regards
Thanks for the info about the “The long and winding road before Indian LPOs”..
We Adodis also in this outsourcing business for the past 10 years and in these years, I saw loads of ups and downs in this outsourcing – mainly in website outsourcing..
Due to this recession period, now most of the clients likes to do offshore where they are pretending to do onsite projects…
We have done more than 300 projects from last 3 quarters and we are expecting this to be high in peak this quarter…
And we are ready to take any number of more projects
It is really important for a certain service provider to secure the data of their clients. Especially in the legal process outsourcing industry, if India’s LPO industry would fail to comply or their data security system is weak, i think legal firms would no longer trust their service.