Monday, November 14, 2005

High End is High on Talent

Economic Times carries an article titled, "Islands in the Stream", discussing the pedigree of people working at higher end of the outsourcing spectrum. LPO, of course, is counted among a space towards the higher end.

Pangea3, a small legal process outsourcing (LPO) based in Mumbai, has 23 lawyers from top law schools in its staff of 30. The IQ level in these companies would match the best of the Wall Street firms or even the consulting firms, such is the concentration of the talent.

With such intellectual bandwidth, the companies also have to work hard to keep them busy. The uber teams do complex work, which require an understanding of cutting edge technology and business. For example, the IP team in Evalueserve does patent drafts, patent analysis and technology analysis, work which requires sound understanding of technology. Similarly, the lawyers at Pangea3 could be working on a 300 page contract draft of a JV agreement, or some cutting edge patent research for Yahoo while the Inductis team could be tackling a complex analytics problem for a Fortune 500 financial services company. “We need the high bandwidth talent because they learn things very quickly, are able to identify the business problems very fast, and then also solve them. Plus they are able to move from project to project very quickly,” says Lalit Wangikar, VP-India Consulting Staff, Inductis.

As I can tell first hand, the thing about learning things very quickly, ability to identify business problems very fast, and the ability to solve them is very important for the success of projects. The commonly used word for this - Learnability!

Take lawyers for example. Pangea3’s Kamlani estimates that an lawyer in India costs around $12,000 whereas the same person will cost anywhere between $1,50,000 to 20,000 in US. Similarly, an engineer in US would cost the company anywhere between $55,000 to 75,000, whereas in India an average salary would be around $ 18,000.

(See the previous post on the compensation in LPO.)

Monday, November 07, 2005

High End is High Paying

Financial Express today carries an article titled, Indian BPOs fight US court battles. Among the usual numbers and names are some interesting and exciting findings, some that will make more investors and entrepreneurs to think about setting an LPO shop in India.

Just 700 people [in the LPO space in India presently], employed across 50-60 companies in the country command up to $125 per hour to generate business worth $70 million per annum. That's higher than the 2004 revenues of $60.5 million generated by EXLServices, one of the largest BPOs in India employing 5000 people.
In fact, for the sector, legal outsourcing is one of the most lucrative businesses. At an average billing rate of $75 per hour, just 700 LPO employees generate a business of $420,000 (Rs 1.8 crore) every day.
And of course the higher billing rate to the clients does translate into higher remuneration (may not be a directly propotionate number).

It's well paying too. Sanjay Kamlani, Co-CEO, Pangea3 told FE: "Lawyers can earn between Rs 1-10 lakh per annum. Engineers, medical practitioners and PhDs are in great demand as they are required for filing patents related to their fields. They earn between Rs 4-8 lakhs per annum depending upon experience." Outsourcing legal work to India helps US law firms operate 24x7. Not to forget the cost savings. Said Ashish Gupta, country manager, Evalueserve: "Drafting a patent in US costs around $8-10,000. In India, it can be done at less than half the cost. There is huge market potential as more than 300,000 patent applications are filed in the US every year."

More Numbers and Nature of Players

An article from The Outsourcing Forum, titled, "US legal services firms test offshore outsourcing" (dated, but relevant nonetheless).

The article ends on a gloomish note (below), but hey, LPO is expected to generate revenues to the tune of $300 million by 2010 and $1 billion by 2015. Keep it coming, baby! Oops, legal professionals are supposed to be more sophisticated ;-)

The LPO market is unlikely to experience the high rates of growth projected for the knowledge process outsourcing industry. Aggarwal points to the risk-averse nature of the legal profession and the need for client confidentiality as reasons why legal services may not be offshored in large volumes. Echoing these views, Parikh feels that captive centers have a better chance of surviving than third-party vendors because “there are liabilities that US lawyers may not want to take on.”

Saturday, November 05, 2005

LPO - The term catches on!

The Times of India carries an article, titled, Take this!: After BPO and KPO, it's LPO, and briefly mentions the relevant numbers. What's more important is that the term Legal Process Outsourcing - LPO - is catching on. And I used to wonder, how terms are coined and virally accepted. This is how!

Wednesday, November 02, 2005

We're not a Law Firm!

... is the disclaimer that every provider of outsourced legal services from India uses. The reason is not hard to find, Yahoo! News article, titled, "India rides outsourcing boom to capture legal work from abroad", quotes a few such firms:

"We are not a law firm though our team comprises of lawyers," the company says on its website. "We do not provide any legal advice or render any legal opinion. Our purpose is to aid and supplement your work."
The distinction is deemed important as clients may not be happy to know that the firm they retain does not do their work.
Also, there are laws in the United States that prohibit legal assistants or paralegals from giving legal advice or representing clients in court as attorneys.

... but we provide a working environment as any top law firm, says Sanjay Kamlani of Pangea3.

Pangea3's Kamlani said that unlike a call center operation, the employees in legal outsourcing firms do not work night shifts, which helps to attract talent.
"During job interviews, we tell candidates you don't do night shifts. But the hours are going to be what they are going to be in a top Indian law firm. And keep your cellphone on because your client may call you at two in the morning," Kamlani said.

In short, LPO firms are doing the work of top law firms, sans the excessive formality, shall we say!