LPO: And the Moolah flows along

Pangea3, the Legal Process Outsourcing company based out of Bombay has done a consistent job of being in the news in the past one year. But this one is the biggest!

Businesswire reports about the second round of funding for the company. The report with a very encouraging title, "Pangea3 Closes $4 Million Series B Round Led by The GlenRock Group, LLC; Financing Reflects Growing Demand for Outsourced Legal Support Services", quotes the lead investor, "Pangea3 is uniquely positioned to capitalize on the explosive growth in the knowledge process outsourcing market".

This is a very impressive performance for a company that completed one year of operations in India in February 2006.

The report goes further , "The financing round underscores the growing demand for outsourced legal services as a solution to the spiraling costs of outside legal counsel and related support work".

It is interesting to note that US attorneys with an impeccable track record of their own are taking keen interest in funding LPO companies. Pangea3's lead investor in this round is an example.

"As a founder of the firm formerly known as O'Sullivan Graev & Karabell, previously one of New York's most preeminent and top-quality law firms, Larry Graev brings to Pangea3 over 30 years of legal experience, expertise and industry relationships," said David Perla, co-founder and co-CEO of Pangea3.

Sanjay Kamlani, who in my view is the face of Legal Process Outsourcing is quoted as saying, "We are proud to have pioneered an industry that can serve as a high-quality, reduced-cost support solution to the skyrocketing costs of external law firms, litigation and intellectual property protection."

Well with numbers like these, it seems that LPO is the "disruptive technology" of the legal world. Way to go, LPO!

LPO Quality: Taking Stock

IPBiz has a recent post having some Heard In The Boardroom notes about the quality of LPO work being rolled out of India. Well, the comments are not all sugar and honey, and this is a well-timed signal for all the players in the space to stregthen quality control measures and stop focussing on hiring alone!

To quote the spiciest of the comments:

*I haven't used Shwegman, but I do know that EvalueServe charges roughly $5000 per application. Not much of a cost savings over a U.S. filing all things considered, and everyone I've known who has used them has been dissatified with the quality (we've taken over several applications they drafted and I can attest to that).

Am I thinking too much or was the EVS report labelling LPO as a hype meticulously timed?

*The oversea work costs about $2500 per application, but quality is poor. It takes about 10-15 additional hours of work to put the application in condition for filing.

I think I know who this (or these?) $2500 per application vendors is/are. All I have to say is caveat emptor! 5 years ago, who would have thought that one could get a patent application drafted in $2500 (that is about 10 or so hours of work by a US attorney, 10 hours!)? And those who now think that this is possible complain of bad quality. The rule is simple IMHO, if you offer only peanuts, you get only monkeys!

Finally, the comments are reminiscent of a US attorney comment on the quality of patent drafts from a particular vendor, "...even my cat can write a better patent!". It may be the right time for LPO company HR managers to explore the possibility of new feline recruits. Hey, don't take me seriously on this! Meow!

Marlabs, another LPO wannabe?

Seems like a low end provider...

Quoting from Offshore Experts:
We are currently working with Legal & Insurance companies specifically in the area of Legal Services to:
-Speed up the settlement process of litigated cases
- Reduce cost of the discovery process
- Manage digitized documents
- Process & index key legal documents and records

Marlabs Solutions for Legal Services
- Litigation management portals
- Document management systems
- Legal Front Office systems
- Data Conversion & Mining
- Claims Management systems
- Infrastructure Support Solutions
Specific areas of expertise include:
- Legal Bill Review systems
- Cross-enterprise collaboration for settlement processes with electronic document tracking and sharing
- Document Abstraction, Indexing and Hyperlinking
- Electronic forms and submissions

Indiatimes and Outsourcing Weblog also have reports.

ValueNotes, reports:

Fulfilling our earlier prognosis (in the report Offshoring Legal Services to India, December 2005), new entrants seeking to provide legal services to India are proliferating. The latest is Marlabs (a US$ 50 million technology services and solutions provider), which announced ambitious plans this week.

Marlabs currently provides a full suite of services and solutions to the healthcare, insurance, real estate, media and entertainment verticals and plans to leverage its client base and build on its initial efforts in the legal services area.

The company's delivery center in Bangalore is already functional and aims to provide "high-end decision support to law firms and professionals in the US on litigated cases". The company plans to hire about 400 professionals by the end of 2007, to add to the 100 employees already on the payroll.

In December last year, ValueNotes published a report and identified an overall addressable market of US $4-5 billion in the legal outsourcing segment by 2010. Indian offshore revenues from legal services were $61 million in 2005 and are expected to increase ten times by 2010. This is the market that Marlabs hopes to tap. In recent weeks, Kolkata-based legal firm Khaitan & Co. entered the segment by starting a new company Neoworth, which will carry out high-end legal outsourcing, while another firm, Pangea3, announced plans to expand its operations in India by hiring 600-700 employees over the next four years.

Source: ValueNotes India Outsourcing Weekly, March 17, 2006 : Vol III No. 11