Sunday, September 30, 2007

Rising rupee hurting LPO companies

A snippet from a Business Standard piece mentioning the hit in margins for LPO companies due to an appreciating rupee:

Tricom, however, has not been immune to the rupee appreciation thus far. Its operating profit margin, which was at over 51 per cent in FY07 and 48 per cent in the first quarter of FY07, shrunk to around 41 per cent in the first quarter of FY08 as the company made an exchange loss of nearly Rs 0.8 crore.

Sify Finance has a similar piece quoting Pangea3:
Sanjay Kamlani, co-CEO of legal outsourcing services firm Pangea3, said that his company was looking at incorporating clauses in new contracts, which would allow it to engage clients in future discussion on pricing in case the currency continued to rise.

Being a big enough business which gets affected by relative movements of currency may be a good problem to have, than not having the business at all!

LexisNexis: "LPO: Touching the Stratosphere"!

As mentioned in an earlier post the Honorable Mr. Justice K.G. Balakrishnan, Chief Justice of India, presided over the launch event for Halsbury’s Law Monthly this past week. It was heartening to see that the cover of the magzine with such patrician pedigree was on "this new new thing" - Legal Process Outsourcing (now also being referred to as Legal Services Offshoring) - the cover had a graphic of a rocket shooting into space!

Legallyours has a copy of the cover story (titled "“Beyond the Back Office: How Legal Outsourcing Companies in India Are Moving Up the Value Chain”) and will be happy to send the PDF to those interested. Please mail jindal [dot] rahul [at] gmail [dot] com for the same. Some snippets:

Lawyer jokes are as popular in India as they are in the West. “How many lawyers does it take to change a light bulb?” Answer: “How many can you afford?” Here’s a better one: “How many U.S. lawyers does it take to draft a successful legal brief in a complex case before the United States Supreme Court?” The answer is, “none!” Indian lawyers at legal services offshoring companies have already been there, done that.

Bradford W. Hildebrandt, chairman of the prominent legal consulting firm, Hildebrandt International Inc., has stated that "ultimately, there may be little limit to what can go offshore." And we are talking about services that now fetch a price tag of $250 billion per year and growing.

If it does not involve walking into court, holding a client’s hand, signing an opinion letter, or signing a court filing, most likely it can be done in India. Western legal services available in India include legal research, drafting of commercial contracts and litigation papers, applications for U.S. and U.K. immigration visas, patent applications and analytics, and a whole host of other high-value work.

The clients of such LPO companies are already reporting hundreds of thousands in savings:

SDD Global
Sony Pictures had to [obtain] an ‘opinion letter’ (outlining the activity and the risks involved) for insurance firms in order to secure cover for shooting a movie, and the movie’s fate hinged on the letter and the cover. Preparing the letter was a 400-man hour job which would have cost $250,000 to get done in the U.S. and Sony gave it a second thought. Eventually, the job was done in India for $43,000.

Atlas Legal Research
You may not be aware, but we had a small portion of that research complete when we hired Atlas. As a test, we had your team reproduce some of the same work done by our nationally recognized law firm. The legal research and opinions that your team produced were essentially identical, except for the price tag. Your group saved us 90%, and completed the work in less than half the time. For clarification, the research you did in less than one month saved us over $200,000


In a recent speech, Mark Chandler, the General Counsel of Cisco Systems, tackled these issues head on. Describing the traditional law firm model as “the last vestige of the medieval guild system,” Chandler mentioned offshoring to India as one of the solutions, and delivered the following shot across the bow, referring both to the young law associates and the large law firm system in general. [See the quote by Chandler in the actual piece]

Instead of embracing change, many Western law firms are continuing their old ways, some to even greater extremes. Hourly billing rates have increased over 30 per cent in the last few years. Starting salaries for untrained lawyers, straight out of law school, have climbed to $160,000 per year. In London, rates for big firm lawyers have reached the unprecedented level of £1000 (nearly $2000) per hour. At the same time, the mega law firm Jones Day recently admitted publicly that it is now offshoring legal work, in response to client demands. All of this bodes very well for the legal services offshoring industry in India.

The article also describes myths about offshoring legal work (for reasoning why these are myths, see the article):

MYTH NUMBER ONE: Indian Lawyers Lack the Skills and Aptitude to Handle High-End Legal Work for the West

MYTH NUMBER TWO: “You Get What You Pay For,” or in Other Words, Low Cost Equals Low Quality

MYTH NUMBER THREE: The Higher the Level of Work, the More Risk of Ethical Violations or Breaches of Confidentiality

The piece concludes with some predictions on "The Future of the Legal Services Offshoring Industry", in order not to hijack the article's audience, go buy the magazine (or mail me for the PDF of the covery story)!

On a lighter note, while I was coming out of the venue for the launch, one "commie type" stopped me and expressed concerns over whether India was becoming a dumping ground for grunt legal US work. Ah, these Reds, 123 to LPO, they struggle understanding any of it!

Overall, a very positive outlook for the industry. Way to go, LPO!

LPO: More Monies Pour In!

It may have seemed in recent times that the star of LPO is shining but only for a particular Legal Outsourcing company but I have some good news from the grounds. Even though there is a worrying increase in the number of "tiny to small" self styled LPO companies, credible companies in the space are working diligently and seeing impressive growth. One such company, SDD Global Solutions, with operations in the erstwhile princely state of Mysore, recently reported on new funding they have secured. Here's the press release:


"SDD Global Solutions Private Limited, the only legal services outsourcing company in India managed by a U.S. law firm, announced on Tuesday that it has entered into a comprehensive funding arrangement with SFP Priority Co., Ltd., a member of the SFP group, a leading Asia-based investor. The arrangement underscores the significant demand for, and growth potential of, SDD Global's high-end legal services offshoring business.

This multi-faceted arrangement provides for a first round of US$2mn, to be followed by subsequent rounds on an as-needed basis. It is believed that this funding, combined with the investments that SDD Global raised previously, amount to the largest foreign direct investment made in any company in Mysore. SFP Priority will have two representatives join SDD Global's board of directors.

"We are very pleased with this tremendous vote of confidence in both our Company and Indian legal services outsourcing generally,” said Russell Smith, Chairman of SDD Global. “This will help us to more rapidly expand our business and to play an even larger role in the paradigm shift in the way legal services are delivered in the West," said Smith.

This arrangement is a key component of Mysore-based SDD Global's strategic plan to expand and consolidate its position as one of the industry’s leading players. The funding will be used primarily to (a) hire additional Western-licensed attorneys to augment both the Company’s extensive employee training program in India and its range of services offered, (b) expand its global marketing efforts, and (c) step up its ongoing recruitment drive for the best and brightest law graduates in India.

Established in April 2006, SDD Global has previously received equity funding from investors from organizations including Merrill Lynch, Cisco Systems, Goldman Sachs, and Barclays Capital, as well as a debt facility from State Bank of India. The Company’s roster of clients includes companies such as HBO, Calvin Klein, Sony Pictures, John Wiley & Sons, 20th Century Fox, Channel 4 Television, as well as multiple US-based law firms."

Sunday, September 23, 2007

Chief Justice of India to Unveil New Lexis/Nexis Legal Magazine With Optimistic Cover Story on LPO

The Honorable Mr. Justice K.G. Balakrishnan, Chief Justice of India, is scheduled to preside over the gala launch event for Halsbury’s Law Monthly, the new trade magazine for the Indian legal industry, published by LexisNexis and Cyber Media. The cover story for the debut issue, “Beyond the Back Office: How Legal Outsourcing Companies in India Are Moving Up the Value Chain,” was authored by Russell Smith, Chairman of SDD Global Solutions. SDD Global is the only LPO in India managed by a U.S. law firm, and it has fast become one of industry leaders. The cover story is a veritable manifesto for the industry, complete with success stories from various LPO companies and statistics from expert reports. “The fact that this article was chosen for the cover story reflects a recognition of the growing impact of the Indian legal outsourcing industry, which we believe will become one of India’s biggest economic sectors in the years to come,” said SDD Global’s Head of Operations, Sanjay Bhatia. The article, complete with footnotes, will be availble on the web, after the launch, at

Smith will expand upon the points in the article in a speech at “India LPO Summit 2008,” the first international conference on legal outsourcing, sponsored by SDD Global Solutions and NewGalexy, together with the leading business conference organization, the American Conference Institute. The event will be held on January 16-17, at the Grand Hyatt Hotel in Manhattan. SDD Global and NewGalexy will lead off the conference with a joint presentation on the current state of the legal outsourcing industry and future opportunities for both clients and providers. Other speakers at the conference will include leading representatives of Pangea 3, American Express, Accenture, Citigroup, Genpact, and major U.S. law firms Kilpatrick Stockton LLC, Kirkland & Ellis LLP, White & Case LLP, and Pillsbury, Winthrop, Shaw, Pittman, LLP. For further information, see

Watch this space for a first hand reporting from the event, thanks to the friends of this blog for arranging an invite.

Wednesday, September 19, 2007

Update: LPO Summit 2008

Here's the final agenda of the India LPO Summit Outsourcing Legal Services Offshore
Wednesday, January 16, 2008 to Friday, January 17, 2008 The Grand Hyatt, New York

Details at

Pre Conference Workshop : Getting to Grips with Outsourcing your Legal Services Offshore: The A-Z of Negotiating, Enacting and Managing Outsourcing Relationships

8.45 Capitalizing on the Growing Trend of Outsourcing Legal Services Offshore: Examining Current Indian LPO Market Growth to Highlight the Increasing Viability of Offshoring

9:45 Panel Discussion: First Hand Experiences on Making the Business Case for Outsourcing Offshore - Qualifying the Viability and Benefits to Overcome Stakeholder Resistance

11:30 Comparing and Contrasting Different Models for Offshoring Legal Services: Which makes Best Sense for your Business?

12:15 Initiating an Offshore Legal Services Operation: Understanding Early Considerations, Structuring the RFP and Pre-Contract Considerations

2:15 Structuring and Negotiating an Outsourcing Contract that Meets Your Needs for Risk Management, Client Confidentiality and Protection of Work Product

3:00 Managing Offshore Outsourced Relationships: Effective Practices for Maximizing your Overseas Contract and Minimizing Reputation Risk

4:00 Avoiding the Ethical and Liability Risks Associated with Outsourcing Legal Services

4:45 Best Practices for the Ongoing Management of the Outsourcing Arrangement

There's also a Pre Conference Workshop on Wednesday January 16, 2008. The topic is
Getting to Grips with Outsourcing your Legal Services Offshore: The A-Z of Negotiating, Enacting and Managing Outsourcing Relationships (9.00 a.m. - 12.00 p.m.)

Details at