CHALLENGES BEFORE LPOS IN INDIA
STARTING an LPO in India is challenging. Despite the BPO boom, the outsourcing of legal
work has been slower to catch on in the country for various reasons. The most important
challenge to the newly-born sector is the need for Indian lawyers to pass US Bar exams, conflict
of interest rules and data security. Legal outsourcing is different from any other knowledge
process outsourcing in a fundamental sense. In most jurisdictions lawyers have to be qualified
and enrolled in order to advise their clients. Lawyers have to be licensed to practice law (within a
certain jurisdiction). Hence legally, one cannot advise, as a lawyer, on laws one is not licensed
to practice. Similarly, one cannot wholly sub-contract one's legal work to non-lawyers in other
jurisdictions Still the work is of a secretarial nature and includes patent drafting, legal research,
contract review and monitoring. However, experts are hoping to receive high-end sophisticated
contracts, which require a strong legal base of international standards.
LPOs in the country today face two major challenges. First is globalization of legal services.
Most LPOs only have a single geography delivery center. However, the trend in the market is for
multiple location options to match the service and client requirements, hedging wage inflation,
and time zones. The second challenge is raising capital for growth. Building teams, infrastructure
and processes capable of serving the most demanding professionals is costly and many LPOs
are not able to access the capital required to compete at the highest level.
Initially, the recession caused a slowdown in new LPO projects as customers focused on crisis
management and put outsourcing initiatives on hold. However, the landscape has now changed
and LPO is benefiting significantly as cost pressures bite and businesses evaluate new strategies
(including outsourcing) to deal with the new economic reality.
With the legal industry growing rapidly, legal process outsourcing has been identified as
a compelling strategy to achieve business objectives. The recent financial crisis is a trigger that
has increased expectations in this area and most predictions point to the growth of offshore
outsourcing in the coming years. LPOs in India thus have a challenge and an opportunity at
hand.
Wednesday, September 15, 2010
LEGAL PROCESS OUTSOURCING IN INDIA
LEGAL PROCESS OUTSOURCING IN INDIA
LPO refers to the companies that work for overseas Law Firms and Lawyers that outsource
legal work from off-shore areas where cost of providing Legal Services is high (i.e.: United
States of America, Europe, UK, Germany, Australia) to countries where the cost of services is
comparatively cheaper - India, Philippines. etc.
Though legal outsourcing began with low-end work like transcription, but within a short time it has
grown to include diverse legal support services like research, review, legal writing, patent search,
patent drafting, contract drafting and other support services like litigation support, corporate
due diligence support, mortgage processing and intellectual property researching, drafting and
applications of patents.
Legal services are the next destination for the BPO companies. The LPOs have recorded a 50%
growth last year, LPOs are coming up in a big way in many cities and towns in India. Since the
year 2003, in India alone, the number of companies offering legal process outsourcing services to
U.S. and U.K. law firms has grown to over 120%.
The growth in the sector is primarily due to the increase in demand, vendor maturity and the
capability of vendors to offer higher value services. This sector has potential to grow further and
large number of foreign firms are outsourcing work to India, as these LPOs offer quality work at a
considerably lower rates.
Traditionally, there are two popular modules of outsourcing the legal processes: first through
Third Party Service Providers/Vendors (TPSP’s) and/or second by owning one’s Captive Unit in
offshore locations. Though both are popular but one cannot rule out the risks and impediments
associated with either.
Not only big corporations but also law firms such as Clifford Chance have now realized the
benefits of outsourcing the routine legal work to destinations like India, Philippines and now
Israel. Law firms in India to attract Western clients are hiring experienced lawyers from US & UK
so that adherence to quality and understanding of the client requirements can be done in a better
way.
The LPOs in India are a hot cakes for fresh law graduates and legal professionals who have a
good working knowledge of English. Currently there are about 100 LPO firms in India. In the
last a year or so the LPOs have started hiring in a larger scale for their projects in process or for
proposed ones. Fresh law graduates prefer to join LPOs instead of jostling for clients in crowded
city courts where the opportunities for freshers are somewhat limited. Moreover, LPOs offer
lucrative salaries; even lawyers from traditional legal firms are quitting their jobs to join LPOs.
Work in an LPO is diverse involving quantitative/low-skilled tasks, qualitative/skill-intensive tasks,
legal transcription, drafting contracts, research memoranda, pleadings, and summarization. The
growth is pushed up by high-volume services like document review, eDiscovery, legal publishing,
document review, etc.
The larger share of work comes from American and UK law firms, it is essential to be familiar with
their law, as it gives the company an edge over its competitors. Various law schools have started
to come up with various courses for the freshers to get trained professionally before applying for
LPO jobs. The nature of job could be contractual or an hourly-wage basis. However, most LPOs
prefer working on a contract basis, as this is more suitable.
LPO refers to the companies that work for overseas Law Firms and Lawyers that outsource
legal work from off-shore areas where cost of providing Legal Services is high (i.e.: United
States of America, Europe, UK, Germany, Australia) to countries where the cost of services is
comparatively cheaper - India, Philippines. etc.
Though legal outsourcing began with low-end work like transcription, but within a short time it has
grown to include diverse legal support services like research, review, legal writing, patent search,
patent drafting, contract drafting and other support services like litigation support, corporate
due diligence support, mortgage processing and intellectual property researching, drafting and
applications of patents.
Legal services are the next destination for the BPO companies. The LPOs have recorded a 50%
growth last year, LPOs are coming up in a big way in many cities and towns in India. Since the
year 2003, in India alone, the number of companies offering legal process outsourcing services to
U.S. and U.K. law firms has grown to over 120%.
The growth in the sector is primarily due to the increase in demand, vendor maturity and the
capability of vendors to offer higher value services. This sector has potential to grow further and
large number of foreign firms are outsourcing work to India, as these LPOs offer quality work at a
considerably lower rates.
Traditionally, there are two popular modules of outsourcing the legal processes: first through
Third Party Service Providers/Vendors (TPSP’s) and/or second by owning one’s Captive Unit in
offshore locations. Though both are popular but one cannot rule out the risks and impediments
associated with either.
Not only big corporations but also law firms such as Clifford Chance have now realized the
benefits of outsourcing the routine legal work to destinations like India, Philippines and now
Israel. Law firms in India to attract Western clients are hiring experienced lawyers from US & UK
so that adherence to quality and understanding of the client requirements can be done in a better
way.
The LPOs in India are a hot cakes for fresh law graduates and legal professionals who have a
good working knowledge of English. Currently there are about 100 LPO firms in India. In the
last a year or so the LPOs have started hiring in a larger scale for their projects in process or for
proposed ones. Fresh law graduates prefer to join LPOs instead of jostling for clients in crowded
city courts where the opportunities for freshers are somewhat limited. Moreover, LPOs offer
lucrative salaries; even lawyers from traditional legal firms are quitting their jobs to join LPOs.
Work in an LPO is diverse involving quantitative/low-skilled tasks, qualitative/skill-intensive tasks,
legal transcription, drafting contracts, research memoranda, pleadings, and summarization. The
growth is pushed up by high-volume services like document review, eDiscovery, legal publishing,
document review, etc.
The larger share of work comes from American and UK law firms, it is essential to be familiar with
their law, as it gives the company an edge over its competitors. Various law schools have started
to come up with various courses for the freshers to get trained professionally before applying for
LPO jobs. The nature of job could be contractual or an hourly-wage basis. However, most LPOs
prefer working on a contract basis, as this is more suitable.
Tuesday, September 14, 2010
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