Monday, October 10, 2005

Move over SENSEX, LPO is here!

Let's begin by asking a simple question: Which Asset Management Company (AMC) in India (heck, anywhere in the world) can give you 500% returns? None? What about 1000%? None? Now, what about 2000%? Well, not an AMC but LPO business can yield that kind of profits!

Don't take my word for it, quoting from this article, titled "Legal outsourcing: the next big thing", that appeared in The Economic Times:

The legal outsourcing opportunity, never mind its size, is one that could be extremely profitable. Consider this — even if one pays a good lawyer up to Rs 40,000-50,000 per month, which would translate to a mere $5 per hour cost; at a billing rate of $100 per hour, that translates into 2000% profits.

And, we are also talking about volumes:

Mr Natarajan agrees that for some jobs, the billing rate could be as high as $100 per hour. Presuming 100,000 legal jobs coming to India by 2015, this translates into a potential $20bn opportunity for India by 2015.

Mr Natarjan doubts that figure, giving his own estimate of $5bn. Sunil Mehta, VP —research, Nasscom, admits cautiously that huge opportunity could potentially exist but, he adds, that India needs to open up its legal services and amend its Partnership Act.

Well, both $5bn or $20bn, or anywhere in between, is a large opportunity! The article further talks about legislative changes for which the NASSCOM needs the government's help:

Nasscom, on its part, is lobbying with government to argue for reciprocal opening up of the services sector at the WTO. Mr Mehta says there are opportunities not only in the legal sector, but other services areas, such as accounting.

I hope and wish this were to be true. Are you also wondering if there are any LPO company stocks that you could buy? I am!