Sunday, September 30, 2007

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!