Indian law firms can earn up to $4.7 billion by 2011 by tapping into the massive $25 billion United States legal off-shoring business, a study conducted by Crisil Research and Information Services Ltd said.
NEW DELHI: Indian law firms can earn up to $4.7 billion by 2011 by tapping into the massive $25 billion United States legal off-shoring business, a study conducted by Crisil Research and Information Services Ltd said.
The Indian Legal Process Outsourcing industry can target two big segments of the US legal sector, the mid-sized private law firms and US corporations, Crisil said.
The combined revenues from the private law firms and corporations could go up to around $4.7 billion by 2011-12, it said, while citing a NASSCOM estimate that put the legal off-shoring content of the Indian BPO industry at $60-80 million at present.
Crisil Research suggested that Indian firms must tap US mid-sized or large law firms in the first phase and corporates in the second stage.
There could be a substantial increase in Indian LPOs targeting US corporations as the industry matures, the report said.
If Indian LPOs capture this segment, their revenues could range from $1.5-2.0 billion, it added.
However, law firms in India would need to add 33,000 lawyers to achieve the revenue, it said, adding that as per NASSCOM estimates the industry has 50-60 firms that employ 700 lawyers.
"Availability of a large number of law graduates in India and significant cost differential in manpower and infrastructure between the US and India will help the Indian IT industry capture a share of this large addressable market in the US," the report said.
Some LPOs in India include international law firms like Lexadigm, Intellevate and New Galaxy and in-house legal departments of companies like GE, Cisco, Oracle, Dupont and Citibank, the report said.
Indian LPOs can compete directly with private law firms in the US to garner a share in corporate legal services spend as they have a cost advantage.
However, Crisil said Indian LPOs would require huge marketing investments to scale up operations in the US.
To compete with US firms, Indian LPOs would have to provide a value chain of services ranging from support level to senior associate level activities.
Crisil pointed toward negative factors, which may act as barriers to growth despite huge potential. These bottlenecks include concerns over data security and service quality and shortage of trained manpower in legal writing.
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