Sunday, September 25, 2005

Market Size and Growth Plans

Some snippets from here and there about companies operating in the LPO space...
Pangea3 Global co-CEO Sanjay Kamlani told PTI that the company will be raising up to $2 million to fund its expansion plans. "We will be raising the money by the end of this year to fund our expansion plans which include shifting the existing Mumbai office to a much larger facility, expanding our operations in the US and opening a new office in Bangalore or Delhi," he said.

Kamlani said the company would be recruiting an additional 120 people which would take the number of its employees to 150, a majority of them lawyers.

A recent National Association of Software and Service Companies-report pegged the market potential for legal outsourcing from the US at $3-4 billion.

"While the size of the Indian legal BPO segment is still very small, the success achieved by early movers has established the proof-of-concept, which is the key to unlocking the potential in new waves of offshore-outsourcing. "

Global spending on legal services is estimated to be at least over $250 billion, with the U.S. accounting for more than two-thirds of the market.

The report observes that increasing levels of interest in offshore-outsourcing of legal services to India have been aided by a steady growth in demand for legal services.

"The legal services outsourcing segment in India is still at a nascent stage, with no known large `one-stop' service provider. "

Currently, the market comprises a fair mix of captive centers established by large law multinational corporations as well as third-party providers," it says.

Hindustan Times says:

Legal outsourcing to India seems to be fast catching up in the US, with large number of attorneys in Grand Forks increasingly relying on lawyers, sitting thousands of miles away, in cities like Bangalore, Delhi and Chennai, drafting legal briefs and doing research for cases to be fought in American courts.

Given the advantage the Indian lawyers have, experts in Grand Forks believe it is unlikely that other Asian or African countries would compete in this sector as has been in case of call centres.

"There is no difference between Indian and American advocates. The quality of work is the same," said Attorney-at-Law, Jay Ethington, specialising in criminal defence.

A former Assistant United States Attorney, Ethington said he had tried Indian advocates to do research and complete the paper work for about half-a-dozen cases. "Results have been very good all the time," he told

Indian advocates do not fight the case directly in US courts. Sitting thousands of miles away, they do the research work, analyse the case and draft the legal brief for advocates, who fight the case in US courts. This saves lot of time and energy, besides money, for American attorneys.

Now a strong advocate of legal outsourcing, because the advantages India have, Ethington said: "I am very much impressed by the work done by Indian lawyers to help fight cases in US courts." Initially, like other US advocates, he too was reluctant in hiring Indian lawyers to do research work for his court cases.

Highly impressed by the quality of work executed by Indian lawyers, Larry Newman, who specialises in corporate transaction, said: "They have been instrumental in getting favourable results even in complex cases." Author of Texas Corporation Law, Newman said he favoured legal outsourcing to India because of cost efficiency, fast response and good quality of work done by the advocates. This is the reason, why it is fast catching up, he argued.

One of the greatest advantage, he said, was the time difference between India and the US. "While our legal research associate are busy preparing the case, our rivals - US lawyers, sleep. As such our company works 24 hours," Dhir said.

A CNN article comments:

A number of U.S. companies, including members of the Fortune 500 and some of the country's largest law firms, are now embracing the idea of outsourcing routine legal work to India, South Korea, Australia and other locales with far lower labor costs.

General Electric, the country's fifth-largest corporation, has taken the idea the farthest of any company and set up a subsidiary in India that employs about 30 lawyers.

This year 12,000 legal jobs moved offshore -- less than one percent of the total -- according to Forrester Research, a Cambridge, Mass.-based market research firm.

It didn't take much for University of Pennsylvania law school friends David Perla and Sanjay Kamlani to become entrepreneurs. After working as corporate counsels for years in the US, they wanted to make an impact on the legal market.

Last May, they set up legal services firm -- Pangea 3 -- with five US lawyers and two clients. Today, they have a dozen clients, and 15 professionals. And in the next three years, they hope to have about 200 lawyers and 100 clients.

Their clients -- US law firms and legal departments of corporates -- may be American and British, but they are serviced from Mumbai, thousands of miles away.

Or take Evalueserve, the BPO which has hired three lawyers and plans to hire seven more immediately. “Fortunately, the area is still nascent,” says Alok Agarwal, chairman, Evalueserve.

$5 bn is what US firms alone will outsource in litigation support by 2006

$17 bn is what the KPO revenue (of which LPO is a part) will grow to by 2010

$300 mn is the revenue para-legal services will generate by 2010