Brief - Basics on legal process outsourcing India
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Brief - Basics on legal process outsourcing India

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Round up on LPO India - Kazim Ali Khan Ma Foi

Round up on LPO India - Kazim Ali Khan Ma Foi

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  • 1. Note on LPO Outsourcing legal work to India is no longer a novelty. It's a reality….. Introduction Legal process outsourcing refers to the off shoring of different elements in the legal process by law-firms, corporations, and in-house legal departments (mainly in US and UK) to offshore centers (mainly in India). Bickel & Brewer in 1995 with its office, I&A International, in Hyderabad is the first LPO Company in India. It dealt with digitalization of the legal documents and creating searchable databases. In 2001, GE was the first company to offshore its in-house legal work in India. Four basic models of LPO firms: 1. Captive centers 2. Basic Law firms 3. JVs 4. Third party delivery centers According to US Census Bureau, the legal services industry in the US generated approximately $184 bn in revenue in 2008. Growth in LPO domain Landscape is marked with: Spate of M&As – SPI India acquired Comat’s Tech, Integreon acquired Datum Legal etc Major strategic alliances – CPA global with Applied Discovery Inc., (LexisNexis), UnitedLex alliance with Huron consulting & Ocean Tomo Multinational Legal Firms interested in India - Clifford Chance etc. Private Equity and Venture funding - Pangea3, SDD Global etc. 1
  • 2. Service Offerings - Broad Spectrum 1. Manpower intensive functions – Such as legal transcription, document conversion, legal coding and indexing, document review etc 2. High-value services –patent and general legal research services like freedom-to-operate search, patent assessment, patent portfolio management, statutory and case law research, due diligence services such as technical, legal and financial analysis of companies for mergers and acquisitions, and contract drafting and review of contracts 2
  • 3. 3. Distinguishing aspects of LPO industry The LPO industry thrives on innovation, constant learning and development. Trained talent - skill and domain Technology/Platform base – For service delivery, data security etc. Education system: 500 law institutions. Autonomous Law School-15 No .of Universities: 111 and various other institutes offering correspondence courses in the country for careers in legal industry 200,000 pass outs every yr approx Trends LPO is big business generating US$ 61 million in revenues. This is expected to grow to US$ 605 million by 2010 Domain is likely to generate 79,000 jobs by 2015 and primarily develop to work on primarily in paralegal services - Forrester Research 08 Captive outfits have the lion’s share of high-end work on account of their confidential nature Rising legal costs in the U.S., and more recently in the EU, are amongst a variety of other factors that are driving a diverse portfolio of legal work to India. India Law firms to go in for a cylindrical makeover – Benefit from outsourcing Major Law firms in US, Canada and Australia have a pyramidal set-up. The top echelons are occupied by the partners who are supported by an army of supporting staff constituted by associates, counsel and non-equity partners placed at the bottom. The cylindrical structure will not only further enhance the productivity and quality of large law firms LPO salaries for Indian lawyers are generally well below $10,000 a year By comparison, a U.S. contract lawyer usually earns around $30 an hour while associate base salaries at major firms in New York start at $160,000 a year 3
  • 4. Developments Companies are attempting to provide onshore and offshore options together Leading LPOs do offer many attractions to Indian lawyers as they offer a technology startup- like environment The opening of the Indian legal market to foreign competition affects the ability of outsourcing firms to recruit top candidates Opening in a smaller market was the only way to meet U.S. and European clients' expectation on costs and service to start with Major competition in document review area Lack of refined industry standards in work process audits, compliances etc Firms increasingly hold professional liability insurance policies similar to those of law firms. Software advances that make sifting through discovery documents more like using an e-mail spam filter Long term opportunities are for those embracing technology, providing integrated service delivery, security, innovative solutions including non-linear review, multi-shore operations fixed pricing and high end service delivery Challenges in Outsourcing to India: 1. Risk of loss of maintaining an attorney – Client Confidentiality 2. Initial cost of training the respective Indian lawyers to maintain quality 3. Regulatory Scrutiny under varying privacy laws 4. Malpractice / Practice law without license 5. Conflicts of interests and ethical considerations – Very difficult to determine when the 6. LPO vendor has the liberty to accept work from any client 7. Unpredictability in regular flow of work 8. High attrition – Many firms switch at last minute due to minor changes in fees 9. Complete quality assurances from firms are difficult to get 10. Performance and quality issues while delegating work to somebody who is more than 4
  • 5. Companies in the LPO industry – India (A partial List) Staff Name of the Location Area of Work strength client S. No (approx) Litigation Support, IP, Contract Drafting 1 UnitedLex Delhi support 325 2 LPO Legal Adv Hyd Legal Research, Doc Review, patent 150 3 Bickel and Brewer Hyd Legal Transcription, Legal Research 50 Document Review, Contract Management, 4 CPA Global Delhi Legal Research 500 5 RR Donnelley Chennai Litigation support, Contract Management 125 Litigation, Contract Management, IP, Legal 6 Quattro Delhi Research. 125 7 Quislex Hyd Legal Research, Litigation 200 8 Clutch Group Blr Legal Research, Doc Review, patent 200 9 ITAG Business Sol Kolkata Domestic, Geographic patenting 80 Legal Research, Contract Management, 10 EVS Delhi Paralegal, Litigation Support 100 Our experience in LPO Industry: 1. Subject matter expertise in locations – Hyderabad, Pune, Chennai and Bangalore 2. Areas of expertise – Document Review, Contract Management, Legal Research, IPR & Trademark design, Litigation support 3. Clients (a partial list) – Bickel & Brewer (IA Intl), LPO legal Advantage, RR Donnelley, Depenning&Depenning, LexisNexis, Clutch Group, UnitedLex, Wipro, Quattro 5