Wednesday, July 19, 2006

Legal Process Outsourcing: Gold Rusher Speak!

ANLUS - The Nepalese Lawyers in US Association ran a very interesting article recently. Titled "Is Legal Outsourcing the New Gold Rush?", the piece quotes the head honchos of most LPO firms (that matter) in India and some of the comments and "facts" are very, for the lack of a better expression, refreshing and entertaining! Take a look at these:

“Every week, at least one person from a Fortune 500 company is visiting our office,” Kamlani said. “They’re calling us; we’re not calling them.” [Sanjay Kamlani of Pangea3]

“Outsourcing is becoming the new gold rush,” said Abhay Dhir, president of Atlas Legal Research, a legal process outsourcing firm with offices in Dallas and Bangalore. “Every [Indian] lawyer who has a cousin in the U.S. thinks they can start outsourcing.” [This is very similar to what Sanjay said in a private conversation: “Every brown lawyer in the US wants to start a Legal Process Outsourcing venture!”]

Intellevate is an American firm with 160 lawyers in India that provides so-called low-end services like transcription, document coding and docketing. Intellevate Chief Executive Officer Leon Steinberg said a number of intellectual property law firms are clients. [The company also has a patent research offering and this practice employs scientists, some with PhD in technology field.]

“It is still a taboo topic,” said Raj Mahale, co-chair of the international business practice group at Murtha Cullina in Stamford, Conn. “Lawyers don’t understand the LPO space. Many lawyers fear that they are going to be losing jobs.” [To those “lawyers”, Hey Joe, Psst, you wouldn't even want to do much of what is being outsourced, so go buy a Heinekken and relax... for a while before you really need to worry]

“The problem with all the offshoring businesses is that people hype it too much,” he said. [Quoting Alok Aggarwal of Evalueserve. Very well said Sir, except for the fact that this category of “people” who “hype it too much” includes researchers such as Evalueserve. Take a look at EVS' own research: if you predict a market to grow to $17b in the next 4 years, don't you expect it to create “hype”. Does anyone remember the excitement at seeing a home grown company, Infosys, reach $1b mark, not too long ago? We are talking dollars, billions of them, this is enough of a “hype fuel”. Isn't it?]

Steinberg said Pangea3 “does a great job of recruiting people.” “We have a few of their employees now working for us,” he said.

Dhir predicted that, “in 10 years, it will be a much more stabilized industry.” [... in 10 years this blog will be 11 years old. That is all I know for sure. Who has seen 10 years hence? Did anyone wonder that one company in a similar outsourced space, IT, will become 20 times its size in 10 years? IMHO, when the tipping point is reached, things happen fast. So will the case be with LPO]

Kamlani said, “Almost nobody is doing real legal work. We are. There are only a handful of us.” [This is correct. What most people pass off as LPO ain't so. It is just BPO that does work which relates to lawyers]

Most outsourced high-end legal work comprises prior art searches, patent shopping and patent drafting. [What? “Patent Shopping”? What the F does that mean? Is it something like this for patents? It is sometimes so amusing dealing with staff writers and recruitment consultants who can't tell a patent from a pattern!]

“To think that you can train a [practicing] Indian lawyer to write U.S. patents in a couple of years is foolhardy,” Steinberg said. “I know because I tried it.” [True. Some Indian LPO vendors are doing it nonetheless]

When Intellevate was approached by a corporation that had a backlog of 1,000 patents that needed to be proofread, the firm was able to provide the bulk low-end services needed. But Intellevate subcontracts high-end patent drafting work out to Evalueserve, which Steinberg describes as “head and shoulders above the competition.”

“I think in the next few years the American Bar Association will develop some requirements for disclosure of outsourced work.” [Yes, that may happen. It will be good to see word documents containing patent drafts with a footnote on each page saying: Drafted in India, sent via Atlantic]

“A lot of people think that, by ignoring us, outsourcing will go away,” Dhir said [The cat won't go away by closing your eyes!]

“We are not competing with them. It is just a question of big firms feeling comfortable incorporating us into their business model.” [... yes precedents exist in innumerable other industries, so it is only a matter of time before each American lawyers knows a brown kid in India who is good at it!]