The West’s woes are translating into good times for the legal process outsourcing (LPO) industry in India as work is piling up for them.
The West’s woes are translating into good times for the legal process outsourcing (LPO) industry in India as work is piling up for them.
Sanjay Kamlani, co-chief executive officer of LPO major Pangea3, said, “The slowdown is bringing new and more work into India as bankruptcy litigations are increasing in the West. As a result, international law firms are looking to cut costs by outsourcing work.” Kamlani said the company’s revenues grew 100% year-on-year in April. He, however, did not provide figures. Pangea3 plans to add 150 employees in the next few months.
The five-year old LPO industry in India deals in three service lines — low-end work like record keeping; middle-level services like legal advice and HR mobility, and high-end legal advisory services.
BPOs and small-sized legal firms do both low- and to high-end work and big-ticket LPOs like Pangea3 and the captive legal units of multinationals do high-end jobs. The size of the industry is about $250 million, expected to grow to $4 billion by 2015. The sector currently employs around 10,000 lawyers, which is expected to grow to 79,000 by 2015. A majority of the work comes from the US, the UK and Canada.
LPOs employ fresh law graduates or those from legal firms with experience across sectors such as technology and finance. “India is one of the top destinations for outsourcing legal work because it churns out 80,000 English-speaking law graduates annually. Also, companies save 30-70% on cost per employee,” said Rohan Dalal, managing director of Mindcrest. The company will increase its lawyer base to 1,000 from 650 now by fiscal-end.
Some LPOs see the next wave of growth in the newly-enacted Limited Liability Partnership Act, which permits increased involvement by international law firms. “This will enable foreign law firms to lay the foundation for their future offices in India. They rely on us to understand the politics, business and ethics of India and we have already received numerous enquiries,” said Abhi Shah, CEO of Clutch Group.
LPOs say lawyers that work with them also gain as they become more marketable. “They get global exposure, which working in Indian legal firms doesn’t provide. Many of our employees have gone on to work as corporate legal counsels in some of the top law firms in the world,” said a senior LPO firm official, requesting anonymity.
However, HR consultants like E Balaji, CEO of Ma Foi Management Consultants, said that such firms struggle to find the right employees. “Most law graduates from top schools prefer to work as legal counsels in the corporate sector, which pays better,” he said.
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