Thursday, December 18, 2008

LPOs in India march ahead

Richard Susskind, author of “The End of Lawyers?”, in his article “Turning to India at break-neck speed” talks about the research conducted by RSG Consulting and the reasons behind increasing business diverted to LPOs.

The report makes the following points:
1. 10 of England’s top 30 law firms have outsourced back office functions or legal work to India.
2. Although the legal market is evolving at break-neck speed there is a dearth of experience and attrition rates are high.
3. Purchasing power of general counsel in India has increased.
4. Shift in the attitude of top English firms with respect to outsourcing – resistance weakening considerably.
5. Huge difference in salaries meted out to Indian legal graduates by Indian LPO companies and to qualified associates by Wall Street firms.
6. Not only law firms but also the clients that they used to serve are outsourcing legal work.

Richard in the write-up attributes the change in attitude to the clients who are pressurizing in-house legal departments and law firms to cut costs and internal head counts. This has led to devising ways of reducing expenditure on back office and administration such as IT, finance and document production. Outsourcing, thus, becomes the most likeable option for reducing expenses on the infrastructure. Even when outsourcing legal work such as legal research, document review in litigation or due diligence for corporate work, LPO companies have proved to be a viable option. These companies rely on well-developed standards and systems and have reduced labor costs in delivering routine and repetitive legal work – resulting in cheaper legal services.

The author perceives the scene of legal support services to be positive for Indian LPO markets and a continuous increase in their revenues.