This story is under development, but the following alliances do point towards verndors coming together to offer a "one-stop-shop" solution for all Document Review needs:
1. CPA Global and Applied Discovery (LexisNexis)
2. LawScribe and IQWEST
3. Integreon and Datum Legal
With some of the alliances offering a fixed price per document, interesting pricing models and consequent savings to customers are bound to emerge. If you aren't getting a discount, ask your Document Review vendor for it!
Is this an indication of the direction of evolution in the LPO space i.e. large law technology companies partnering or merging with, or even acquiring LPO services vendors? This blog is keenly watching.
Friday, September 26, 2008
Legal Process Outsourcing: Heard from the Grapevine
First, excerpt from an email from a reader of the blog who has some "source" based information on Williams Lea LPO (Centric):
"I find your blog very interesting always try and dip in when I can.
I remember last year or earlier this year it was reported and mentioned on your blog too that Williams Lea bought Centric LPO to get into the LPO space. Which was great, not just a BPO pretending it was easy to move up the value chain into KPO/LPO but putting their money where there mouth is. Hurray we all cried.
However, my sources tell me that Centric LPO is being sold off from Williams Lea after only a year. The reason: - Williams Lea have realised that they have to layout proper investment in the space to gain any further credibility. The Centric LPO team had a great proposition - they just needed a vehicle and possibly still do need a vehicle that supports this growing market.
I am sure Williams Lee will blame the credit crunch and obviously the majority of their clients are in the Investment Banking space etc, but it is remiss of them and seems a shame that they get into a space through acquisition and then bail out of a market that with a bit of focus and resource could have been very successful for them.
How many other BPO firms will either pull out of the LPO space or not get into it, leaving the niche players to carve up the market between them?"
And then, the grapevine is abuzz with the news about a large legal outsourcing firm in talks to get acquired by R R Donnelley, who also acquired OfficeTiger in 2006.
With one large company set to exit the space and another one set to enter, it has become interesting for punters to predict what the LPO company of 2010 will look like. Will it be a large general business services company with pockets deep enough to acquire small companies, not the mom-and-pop shops which have opened across India, and build a cluster of capabilities and clientele under one roof? Or, will large law firms try their hand at opening offshore centers which allow them to service their corporate clients? Will niche LPO companies be able to survive given the undue scepticism about benefits of Legal Offshoring among large law firms?
The financial crisis will defintely act as a driver for optimization of legal expenses and offshoring as a means should be an obvious choice. Who to outsource to will depend on the risk profile of the buyer of the outsourced service and thought behind their vision. A lot of choice also does not help!
"I find your blog very interesting always try and dip in when I can.
I remember last year or earlier this year it was reported and mentioned on your blog too that Williams Lea bought Centric LPO to get into the LPO space. Which was great, not just a BPO pretending it was easy to move up the value chain into KPO/LPO but putting their money where there mouth is. Hurray we all cried.
However, my sources tell me that Centric LPO is being sold off from Williams Lea after only a year. The reason: - Williams Lea have realised that they have to layout proper investment in the space to gain any further credibility. The Centric LPO team had a great proposition - they just needed a vehicle and possibly still do need a vehicle that supports this growing market.
I am sure Williams Lee will blame the credit crunch and obviously the majority of their clients are in the Investment Banking space etc, but it is remiss of them and seems a shame that they get into a space through acquisition and then bail out of a market that with a bit of focus and resource could have been very successful for them.
How many other BPO firms will either pull out of the LPO space or not get into it, leaving the niche players to carve up the market between them?"
And then, the grapevine is abuzz with the news about a large legal outsourcing firm in talks to get acquired by R R Donnelley, who also acquired OfficeTiger in 2006.
With one large company set to exit the space and another one set to enter, it has become interesting for punters to predict what the LPO company of 2010 will look like. Will it be a large general business services company with pockets deep enough to acquire small companies, not the mom-and-pop shops which have opened across India, and build a cluster of capabilities and clientele under one roof? Or, will large law firms try their hand at opening offshore centers which allow them to service their corporate clients? Will niche LPO companies be able to survive given the undue scepticism about benefits of Legal Offshoring among large law firms?
The financial crisis will defintely act as a driver for optimization of legal expenses and offshoring as a means should be an obvious choice. Who to outsource to will depend on the risk profile of the buyer of the outsourced service and thought behind their vision. A lot of choice also does not help!
Friday, September 12, 2008
Press Release: ‘Customer Trust & Confidence, Paramount for Business’ – announces CPA India
New Delhi, Sep 12, 2008 —CPA India - part of the CPA group, a leading provider of legal support services and world’s top intellectual property management specialist, has been awarded the AS/NZS ISO 9001:2000 quality management system (QMS) certification and ISO/IEC 27001:2005 Information Security Management (ISM) certification by the International Organization for Standardization (ISO) through the Australia based SAI Global.
ISO 9000 is the international standard that provides a framework for a quality management system that ensures consistency and improvement of working practices. It is based on standards, which specify a procedure for achieving effective quality management. This certification demonstrates the company’s focus on implementing a QMS system which ensures:
§ continuous improvements in quality
§ uniform quality control guidelines leading to increased customer satisfaction
§ dedicated, systematic approach to overall quality management
§ creating and maintaining a culture of quality throughout the organization
The ISO 9001:2000 Certification confirms that CPA’s Noida operations, managed in a state-of-the-art 85,000 sq. feet facility in the National Capital Region (Noida), conform to the Quality Management Standard in the off-shored and/or outsourced services domain, in this case specifically related to legal support services inclusive of intellectual property services and analytics operations.
Similarly ISO 27001, applicable to all industry sectors, is an internationally recognized structured management process to evaluate, implement and maintain an Information Security Management System (ISMS) and comprises of best practices in information security. This certification:
§ Identifies, manages and minimizes the range of threats to which information is regularly subjected
§ Ensures improved effectiveness of Information Security and enhanced security of client data confidentiality
Compliance with this class-leading certification demonstrates CPA’s commitment to making a company more secure and safeguarding the information of its customers.
“We are proud of this achievement as it is a testimony to our commitment of continuous quality improvement, foolproof risk management and customer delight. CPA will continue to break new ground, bringing greater value to customers and thereby building enduring relationships with our customers,” said Bhaskar Bagchi, Country Head, CPA India. “It is imperative that an organization in a leadership position such as ours provides a robust and class-leading quality and security environment that enhances the trust and confidence reposed in our services by our clients”, he added.
“Both certifications acknowledge our quality processes and the stringent measures we take to ensure that every solution delivered by CPA India measure up to the highest possible international standards of quality and information security. This has helped enhancing customer satisfaction on one side and achieving continual improvement in performance on the other, thereby ensuring maximum efficiency and effectiveness,” said Inder Duggal, Head of Operation, CPA India.
“I found CPA India to be a very focused team that is organized to deliver results for the overall benefit of its clients around the world. Their processes are pertinent to the tasks in hand and designed to deliver assured results. The company management is fully committed to the cause of quality and provides the right leadership for an effective organization.” said Maj. Gen. Vinod K. Khanna, Principal QMS Auditor for SAI Global. He added “Overall CPA India gives great confidence about its ability to deliver as per the customer expectations and achieve total satisfaction amongst them as also creates value addition. The company has now got the coveted ISO 9001 certificate. This certificate should provide the requisite impetus for attaining even higher levels of organizational excellence.”
About CPA
With clients in over 100 countries, CPA is a leading provider of outsourced legal support services and the world's top intellectual property (IP) management specialist. Founded in 1969, CPA provides lifecycle management services for intellectual property such as patent, design and trademark searching, watching, renewals, and portfolio strategy. CPA is also a leader in the growing market for outsourced contract management and litigation support services, helping law firms and corporations to realize value by managing risk, cost and capacity. CPA employs over 1,100 people in 16 offices in 8 countries.
CPA started operations in India in 2005, through its acquisition of Intellevate, which formed its India operation in 2003. CPA India has over 350 employees that include lawyers, engineers and other specialized domain experts and currently operates from a state-of-the-art office in the National Capital Region spread across 85,000 sq. feet (in Noida). The Black Book of Outsourcing, in their global LPO survey earlier this year, recognized CPA as ranking number 1 in categories of Contract and Legal Document Review, Innovation, Trust, Reliability and Brand Image. www.cpaglobal.com
About SAI Global
SAI Global Limited, one of the world’s leading business publishing, compliance, training and assurance organisations, is a public company traded on the Australian Stock Exchange with revenues of over $200M annually. With offices throughout North America, Mexico, Europe, Australia, New Zealand, India, Indonesia, the United Kingdom, Africa and Asia, SAI Global delivers an integrated range of standards and business improvement related products and services ranging from quality and occupational health and safety systems to information security, risk and environmental management
-Ends-
For more information, please contact:
CPA
Priyanka Sharma
Head – Corporate Communications
Mobile: 098102-96660
Saturday, September 06, 2008
Using Legal Offshoring to Reduce Costs in e-discovery
The following comments are excerpted from a Metropolitan Counsel piece titled, "General Counsel Take Note: The E-Discovery Process Continues To Evolve". The piece interviewed Brandon Daniels, Co-Head of Legal Process Consulting, CPA Legal Services, Rob Hellewell, Senior Director, LexisNexis Applied Discovery, and Edward H. Rippey, Partner and Co-Chair of EDiscovery Practice Group, Covington & Burling LLP.
"... An[other] option that companies employ to reduce e-discovery costs is the offshore option. There are great benefits available through offshoring, but there are risks as well. This is a very competitive arena, and there are a great many start-up companies in the business that simply lack the infrastructure to protect the intellectual property of their clients. While this risk exists in the U.S. as well, it is of particular concern offshore. It is important for a company to know with whom they are dealing and to have confidence in their data security systems.
Another issue that is of some concern when dealing with an offshore service provider in this area is, of course, the quality of the staff. Even in India or the Philippines, where the standard of English is very high, the attorneys hired to handle the discovery process may lack the requisite experience to properly assess the materials they are reviewing. It is important to know something about them – their educational qualifications and how they are recruited, what the workplace environment is like and howthey are managed – and whether there are cultural differences that might influence the review process.
A third issue that is important in the offshore context is financial stability. Very often that is an important indicator of whether the enterprise has done good work for its clients in the past and will be there for them in the future. You do not want to be in the middle of a review facing a production deadline and learn that the offshore provider has run out of money and cannot meet payroll."
Rippey added, "What Brandon has said about offshoring gaining legitimacy over the past three years or so is absolutely correct. And companies are becoming increasingly savvy when it comes to conducting a review. The firstline review might be offshore, and the second handled by associates at their U.S. outside counsel. And as this development proceeds, I believe that an increasing number of companies understand that the low bid provider is not automatically going to be the best one to retain. Cost is a factor that is central to this issue, but service is now recognized as equally important, if not more so."
"... An[other] option that companies employ to reduce e-discovery costs is the offshore option. There are great benefits available through offshoring, but there are risks as well. This is a very competitive arena, and there are a great many start-up companies in the business that simply lack the infrastructure to protect the intellectual property of their clients. While this risk exists in the U.S. as well, it is of particular concern offshore. It is important for a company to know with whom they are dealing and to have confidence in their data security systems.
Another issue that is of some concern when dealing with an offshore service provider in this area is, of course, the quality of the staff. Even in India or the Philippines, where the standard of English is very high, the attorneys hired to handle the discovery process may lack the requisite experience to properly assess the materials they are reviewing. It is important to know something about them – their educational qualifications and how they are recruited, what the workplace environment is like and howthey are managed – and whether there are cultural differences that might influence the review process.
A third issue that is important in the offshore context is financial stability. Very often that is an important indicator of whether the enterprise has done good work for its clients in the past and will be there for them in the future. You do not want to be in the middle of a review facing a production deadline and learn that the offshore provider has run out of money and cannot meet payroll."
Rippey added, "What Brandon has said about offshoring gaining legitimacy over the past three years or so is absolutely correct. And companies are becoming increasingly savvy when it comes to conducting a review. The firstline review might be offshore, and the second handled by associates at their U.S. outside counsel. And as this development proceeds, I believe that an increasing number of companies understand that the low bid provider is not automatically going to be the best one to retain. Cost is a factor that is central to this issue, but service is now recognized as equally important, if not more so."
Friday, September 05, 2008
ABA Ethics opinion on Legal Outsourcing: Vendor Speak
As previously mentioned, this blog conducted interviews of some of the major Legal Outsourcing providers, here are some of the responses:
1. How do you perceive the opinion?
Says Sanjay Kamlani, Co-CEO of Pangea3, "The recent ABA ethics opinion blesses and endorses the off-shoring of legal services. Following in the footsteps of four local bar associations, the ABA has officially issued an ethics opinion that not only approves but endorses the use of legal outsourcing providers as a method to extend in-house capacity and to reduce law-firm costs."
"...no one seriously expected the ABA to come out against legal outsourcing. After all, the ABA historically has been a finger-in-the wind organization, and today the wind blows against exorbitant legal fees and law firm inefficiencies that for too long have been a burden on the economies and even ordinary citizens of the West. It blows in the direction of globalization." "In short, the ABA panel, far from standing in the way of legal off-shoring, has embraced it, with mostly common sense caveats that are no impediment to this growing trend." says Russell Smith, Chairman of SDD Global.
Ram Vasudevan, CEO of Quislex opines "I do think this will help the industry grow."
Mark Ross, Vice President of LawScribe is a bit more cautionary about the apparent carnival among those who are pro-outsourcing: "Facially, the Opinion offers little that we have not read before in the earlier Opinions by the NYC, LA County, San Diego and Florida Bar Associations." "While it is certainly welcome, make no mistake about it, this Opinion has been viewed through ever-so-slightly rose-tinted spectacles. Yes, the tone is welcome, however substantively the ABA are simply re-affirming the position as it has been for the last few years. There is a danger that the plethora of articles, blogs commenting on the Opinion may come across to the trained eye as something of an overkill."
2. The opinion is being touted as the tipping point that the LPO space has been waiting for - your comments?
Mark continues his cautionary note: "I don't necessarily agree that this Opinion is the tipping point the industry has been waiting for. As I mentioned previously, substantively, there is nothing new. The Opinion is simply another newsworthy item relating to the LPO industry, nothing more and nothing less." "My personal belief is that the tipping point is client driven and that clients' perception and attitude to LPO will be influenced by numerous factors, including the current state of the economy, the rising costs of junior US qualified junior associates and litigation generally, the commoditization of certain elements of the legal function, and yes admittedly, increased press exposure to the concept of LPO."
Says Ram, "[The ABA opinion is] one of several factors. The quality and reputation, which take time to build, of the legal work done in India are essential to grow the industry and are the true tipping points. Those firms that have established processes for and a culture of quality, will see the tipping point sooner i.e., the tide is not going to turn for all the companies at the same time."
According to Smith "... the Opinion's favorable take on what we do, combined with the publicity this is generating, could help bring about a positive sea change in terms of awareness among in-house counsel and law firms."
Sanjay Kamlani sees the work not only increasing in volume but also complexity "The nature of the legal services [Pangea3's existing Fortune 500 and Am Law 200] clients are outsourcing to us continues to mature in terms of scope and sophistication. For example, in-house counsel departments have outsourced real time transaction sensitive M&A due diligence work over the past year; quite a step forward from legacy contract review and abstraction. And in electronic discovery, our senior litigation attorneys have increasingly played the role of document review strategists, guiding counsel on everything from responsive codes, to search methodology and case specific strategy related platform functionality and suitability. "
"To the extent that there were any Doubting Thomases in those organizations, the recent ABA opinion certainly vindicates the GCs and partners who chose to outsource legal work to India despite those skeptics. This ABA opinion gives them the additional support they may have needed to exponentially expand the strategy and the effort. For organizations that succumbed to the doubts of conservatives who warned against legal outsourcing because of legal ethics concerns, the ABA opinion should certainly serve as a catalyst for the GCs and partners in those companies and law firms to begin their effort to catch up with their counter parts who have been outsourcing legal work now for years. So for both these reasons, the ABA opinion could very well trigger a tipping point for the LPO industry."
3. Have you received more than usual number of queries from prospects since the opinion? Any highlights?
"We have seen a significant increase in inquiries in the last several months precipitated by the US recession both from the standpoint of the cost pressures and related head count reductions associated with the recession as well as from the standpoint of increased legal work directly related to the subprime debacle that triggered the recession. The ABA opinion is likely to accelerate the momentum by eliminating any legal ethics related barrier that may have been holding up some decision makers who are faced with one or both of these problems." says Kamlani.
According to Smith, the spike in inquiries came not from anything new in the Opinion itself, but rather from the favorable publicity it is generating. Quislex received several congratulatory messages and notes that the opinion is good for the industry as a whole. And Mark, rightfully, points that we need to allow a little more time before being in a position to effectively assess any impact the Opinion may or many not have.
4. Is your company prepared to take on the wave of work expected from clients of offshored legal services in the next 6-12 months? Can you cite examples of such preparation?
"We will be working closely with leading Indian Universities and technical colleges to ensure that as a market leader we always have access to the best possible talent. We will also be opening up a second India facility either later this year or early 2009." says Mark.
Says Ram Vasudevan of Quislex, "Our preparation for work is based on executed contractual commitments, existing work, repeat work from existing clients and a strong pipeline of new work."
Similar to Mark's comments on training to enable Indian lawyers to support legal outscouring work, Russell Smith says, "For one thing, for over a year we've put a big emphasis on advanced legal training, especially in the areas of U.S. legal research and drafting, so most of our people are already functioning at the level of a U.S. law firm associate or higher." He continues, "... taking advantage of the fact that we get hundreds of job applications a day, we have been very carefully preparing a large database of qualified candidates who can join our ranks on short notice. Lastly, we have floor space and infrastructure all set for an additional 200 or more employees, so we're ready to ramp up, if and when the time comes."
As with Mark and Russell, Sanjay shares his plans of getting the infrastructure ready, "We have more than doubled our work force since the same period last year and we increased our seat capacity to over 400. From a talent capacity standpoint, we have evolved several strategies to handle bursty growth spurts and demand for service. So, in all respects, including physical infrastructure, technology, and talent, we are well poised to handle anywhere from twice to three times our current volume at any given point in time."
5. How do you see the demand for offshored legal services evolving over the next 2-3 years?
Sanjay is quite upbeat about the evolution of the industry from this point, "With this likely tipping point, we should see the demand for legal services growing exponentially over the next twelve months. Over the next 2 to 3 years, we would expect every large in-house counsel department and a much larger number of law firms to view offshore outsourcing strategies as essential to their legal practice. In many respects, outsourced legal services from India’s LPO industry represents the best legal work for the best price--the best value for money. To go back to the example of an M&A transaction with a budget on the due diligence, an attorney operating within a US or European cost structure, be it a law firm or an in-house counsel, realizes how much more of a thorough due diligence review they can accomplish with highly qualified attorneys and at an India based LPO with a substantially lower cost structure. As a result, attorney’s in the US and Europe are coming to realize that the LPO value proposition enables the greatest fulfillment of their professional responsibility to their clients. To state it the other way, without legal outsourcing, these attorneys realize that the level of service they can otherwise provide to their clients is less."
Russell Smith of SDD offers some predictions,
"1. Corporations, not Western law firms, will drive the market. Law firms currently provide 45% of the business for the industry, and more and more of them will hire offshore providers, but this will be driven mainly by the dictates of corporate clients. Another way that corporations will drive the market, indirectly, is by obtaining flat (or fixed) rate billing from their outside counsel, instead of hourly billing. This kind of billing can radically alter the dynamics of Western law practice, as law firms working for flat rates will have a compelling incentive to reduce hours and costs, instead of increasing them as before. Flat rate billing will cause many law firms to realize that offshore providers can be important allies in improving their bottom line, rather than competitive enemies.
2. Every sector of the legal offshoring industry will grow dramatically, including so-called "lower end" services, such as document coding, form filling, transcript digesting, and legal transcription. Ultimately, however, the biggest impact, the long-term mother lode, will be higher-value services such as legal research and drafting – services that constitute the bulk of the legal work now done in the West.
3. The continued boom in the industry will lead to continued and increased competition among offshoring providers for legal talent in India. At the same time, as the public profile of the industry grows and improves, an increasing number of law graduates and young lawyers will gravitate to the industry, and more of the best and brightest among 12th-graders will decide on law as a career. However, during the lag between the current pool of talent and the increase in that pool in the future, the competition for the best law graduates and lawyers will be won mostly by high-end providers. This is because higher-value work tends to be more interesting and challenging, and because the higher profit margins allow for higher salaries.
4. Training will be central to the industry’s success. Training will be especially critical as providers move up the value chain in relation to their services, and as they recruit more deeply into the pool of available talent, most of whom will be fresh law graduates with no experience in working for Western clients. "
Ram predicts "More acceptance in the US legal market and perhaps consolidation on the Indian front. We will also likely see several players exiting, voluntarily or involuntarily from the space due to execution issues."
Mark comments on the evolution including countries like UK to follow the US adoption of legal offshpring. Interestingly, he also predicts a dip in partner profitability (growth in percentage terms):
"... forward thinking law firms, wishing to stay ahead of the curve during difficult economic times, will start exploring with a much greater intensity, partnerships with the leading LPOs in the marketplace. 2008 and 2009, by all accounts will witness profits per equity partner dipping for the first time in my living memory. Perhaps this will be the wake up call, that pushes LPO into the mainstream for law firms, as a viable strategic offering to their clients.
I also believe the UK will follow the US lead and explore the specific areas of the UK legal profession that are most suitable to the LPO model. At present we are yet to witness large scale outsourcing of pre-issue of court proceedings, personal injury work for example. Pre-issue cases account for well over 95% of the entire UK personal injury work flow, and this is an area ripe for outsourcing. "
Legal Outsourcing as an industry seems to have arrived at a juncture where the serious players have evolved in their thinking, strategy and execution. The ground is set for some serious growth. Watch this space for further interviews with other large providers.
1. How do you perceive the opinion?
Says Sanjay Kamlani, Co-CEO of Pangea3, "The recent ABA ethics opinion blesses and endorses the off-shoring of legal services. Following in the footsteps of four local bar associations, the ABA has officially issued an ethics opinion that not only approves but endorses the use of legal outsourcing providers as a method to extend in-house capacity and to reduce law-firm costs."
"...no one seriously expected the ABA to come out against legal outsourcing. After all, the ABA historically has been a finger-in-the wind organization, and today the wind blows against exorbitant legal fees and law firm inefficiencies that for too long have been a burden on the economies and even ordinary citizens of the West. It blows in the direction of globalization." "In short, the ABA panel, far from standing in the way of legal off-shoring, has embraced it, with mostly common sense caveats that are no impediment to this growing trend." says Russell Smith, Chairman of SDD Global.
Ram Vasudevan, CEO of Quislex opines "I do think this will help the industry grow."
Mark Ross, Vice President of LawScribe is a bit more cautionary about the apparent carnival among those who are pro-outsourcing: "Facially, the Opinion offers little that we have not read before in the earlier Opinions by the NYC, LA County, San Diego and Florida Bar Associations." "While it is certainly welcome, make no mistake about it, this Opinion has been viewed through ever-so-slightly rose-tinted spectacles. Yes, the tone is welcome, however substantively the ABA are simply re-affirming the position as it has been for the last few years. There is a danger that the plethora of articles, blogs commenting on the Opinion may come across to the trained eye as something of an overkill."
2. The opinion is being touted as the tipping point that the LPO space has been waiting for - your comments?
Mark continues his cautionary note: "I don't necessarily agree that this Opinion is the tipping point the industry has been waiting for. As I mentioned previously, substantively, there is nothing new. The Opinion is simply another newsworthy item relating to the LPO industry, nothing more and nothing less." "My personal belief is that the tipping point is client driven and that clients' perception and attitude to LPO will be influenced by numerous factors, including the current state of the economy, the rising costs of junior US qualified junior associates and litigation generally, the commoditization of certain elements of the legal function, and yes admittedly, increased press exposure to the concept of LPO."
Says Ram, "[The ABA opinion is] one of several factors. The quality and reputation, which take time to build, of the legal work done in India are essential to grow the industry and are the true tipping points. Those firms that have established processes for and a culture of quality, will see the tipping point sooner i.e., the tide is not going to turn for all the companies at the same time."
According to Smith "... the Opinion's favorable take on what we do, combined with the publicity this is generating, could help bring about a positive sea change in terms of awareness among in-house counsel and law firms."
Sanjay Kamlani sees the work not only increasing in volume but also complexity "The nature of the legal services [Pangea3's existing Fortune 500 and Am Law 200] clients are outsourcing to us continues to mature in terms of scope and sophistication. For example, in-house counsel departments have outsourced real time transaction sensitive M&A due diligence work over the past year; quite a step forward from legacy contract review and abstraction. And in electronic discovery, our senior litigation attorneys have increasingly played the role of document review strategists, guiding counsel on everything from responsive codes, to search methodology and case specific strategy related platform functionality and suitability. "
"To the extent that there were any Doubting Thomases in those organizations, the recent ABA opinion certainly vindicates the GCs and partners who chose to outsource legal work to India despite those skeptics. This ABA opinion gives them the additional support they may have needed to exponentially expand the strategy and the effort. For organizations that succumbed to the doubts of conservatives who warned against legal outsourcing because of legal ethics concerns, the ABA opinion should certainly serve as a catalyst for the GCs and partners in those companies and law firms to begin their effort to catch up with their counter parts who have been outsourcing legal work now for years. So for both these reasons, the ABA opinion could very well trigger a tipping point for the LPO industry."
3. Have you received more than usual number of queries from prospects since the opinion? Any highlights?
"We have seen a significant increase in inquiries in the last several months precipitated by the US recession both from the standpoint of the cost pressures and related head count reductions associated with the recession as well as from the standpoint of increased legal work directly related to the subprime debacle that triggered the recession. The ABA opinion is likely to accelerate the momentum by eliminating any legal ethics related barrier that may have been holding up some decision makers who are faced with one or both of these problems." says Kamlani.
According to Smith, the spike in inquiries came not from anything new in the Opinion itself, but rather from the favorable publicity it is generating. Quislex received several congratulatory messages and notes that the opinion is good for the industry as a whole. And Mark, rightfully, points that we need to allow a little more time before being in a position to effectively assess any impact the Opinion may or many not have.
4. Is your company prepared to take on the wave of work expected from clients of offshored legal services in the next 6-12 months? Can you cite examples of such preparation?
"We will be working closely with leading Indian Universities and technical colleges to ensure that as a market leader we always have access to the best possible talent. We will also be opening up a second India facility either later this year or early 2009." says Mark.
Says Ram Vasudevan of Quislex, "Our preparation for work is based on executed contractual commitments, existing work, repeat work from existing clients and a strong pipeline of new work."
Similar to Mark's comments on training to enable Indian lawyers to support legal outscouring work, Russell Smith says, "For one thing, for over a year we've put a big emphasis on advanced legal training, especially in the areas of U.S. legal research and drafting, so most of our people are already functioning at the level of a U.S. law firm associate or higher." He continues, "... taking advantage of the fact that we get hundreds of job applications a day, we have been very carefully preparing a large database of qualified candidates who can join our ranks on short notice. Lastly, we have floor space and infrastructure all set for an additional 200 or more employees, so we're ready to ramp up, if and when the time comes."
As with Mark and Russell, Sanjay shares his plans of getting the infrastructure ready, "We have more than doubled our work force since the same period last year and we increased our seat capacity to over 400. From a talent capacity standpoint, we have evolved several strategies to handle bursty growth spurts and demand for service. So, in all respects, including physical infrastructure, technology, and talent, we are well poised to handle anywhere from twice to three times our current volume at any given point in time."
5. How do you see the demand for offshored legal services evolving over the next 2-3 years?
Sanjay is quite upbeat about the evolution of the industry from this point, "With this likely tipping point, we should see the demand for legal services growing exponentially over the next twelve months. Over the next 2 to 3 years, we would expect every large in-house counsel department and a much larger number of law firms to view offshore outsourcing strategies as essential to their legal practice. In many respects, outsourced legal services from India’s LPO industry represents the best legal work for the best price--the best value for money. To go back to the example of an M&A transaction with a budget on the due diligence, an attorney operating within a US or European cost structure, be it a law firm or an in-house counsel, realizes how much more of a thorough due diligence review they can accomplish with highly qualified attorneys and at an India based LPO with a substantially lower cost structure. As a result, attorney’s in the US and Europe are coming to realize that the LPO value proposition enables the greatest fulfillment of their professional responsibility to their clients. To state it the other way, without legal outsourcing, these attorneys realize that the level of service they can otherwise provide to their clients is less."
Russell Smith of SDD offers some predictions,
"1. Corporations, not Western law firms, will drive the market. Law firms currently provide 45% of the business for the industry, and more and more of them will hire offshore providers, but this will be driven mainly by the dictates of corporate clients. Another way that corporations will drive the market, indirectly, is by obtaining flat (or fixed) rate billing from their outside counsel, instead of hourly billing. This kind of billing can radically alter the dynamics of Western law practice, as law firms working for flat rates will have a compelling incentive to reduce hours and costs, instead of increasing them as before. Flat rate billing will cause many law firms to realize that offshore providers can be important allies in improving their bottom line, rather than competitive enemies.
2. Every sector of the legal offshoring industry will grow dramatically, including so-called "lower end" services, such as document coding, form filling, transcript digesting, and legal transcription. Ultimately, however, the biggest impact, the long-term mother lode, will be higher-value services such as legal research and drafting – services that constitute the bulk of the legal work now done in the West.
3. The continued boom in the industry will lead to continued and increased competition among offshoring providers for legal talent in India. At the same time, as the public profile of the industry grows and improves, an increasing number of law graduates and young lawyers will gravitate to the industry, and more of the best and brightest among 12th-graders will decide on law as a career. However, during the lag between the current pool of talent and the increase in that pool in the future, the competition for the best law graduates and lawyers will be won mostly by high-end providers. This is because higher-value work tends to be more interesting and challenging, and because the higher profit margins allow for higher salaries.
4. Training will be central to the industry’s success. Training will be especially critical as providers move up the value chain in relation to their services, and as they recruit more deeply into the pool of available talent, most of whom will be fresh law graduates with no experience in working for Western clients. "
Ram predicts "More acceptance in the US legal market and perhaps consolidation on the Indian front. We will also likely see several players exiting, voluntarily or involuntarily from the space due to execution issues."
Mark comments on the evolution including countries like UK to follow the US adoption of legal offshpring. Interestingly, he also predicts a dip in partner profitability (growth in percentage terms):
"... forward thinking law firms, wishing to stay ahead of the curve during difficult economic times, will start exploring with a much greater intensity, partnerships with the leading LPOs in the marketplace. 2008 and 2009, by all accounts will witness profits per equity partner dipping for the first time in my living memory. Perhaps this will be the wake up call, that pushes LPO into the mainstream for law firms, as a viable strategic offering to their clients.
I also believe the UK will follow the US lead and explore the specific areas of the UK legal profession that are most suitable to the LPO model. At present we are yet to witness large scale outsourcing of pre-issue of court proceedings, personal injury work for example. Pre-issue cases account for well over 95% of the entire UK personal injury work flow, and this is an area ripe for outsourcing. "
Legal Outsourcing as an industry seems to have arrived at a juncture where the serious players have evolved in their thinking, strategy and execution. The ground is set for some serious growth. Watch this space for further interviews with other large providers.
Hennessey, yet again!
Below is a public statement being posted in various places by Joseph Hennessey. He's the lead lawyer in the lawsuit against legal outsourcing in Washington D.C. federal court, Newman McIntosh & Hennessey vs. Bush, which was withdrawn only a few days after the filing of a motion to dismiss. Hennessey now says he's busy hunting for "those who have been victimized by the use of foreign legal process outsourcers," so he can file "an action for damages on a class wide basis." But judging from the first "example" he's found, where Indian doctors allegedly were used to assist in a surgery that "went horribly wrong," it looks like he still has more plaintiff-searching to do. If anybody can see a connection between this allegedly botched surgery and legal outsourcing, please let me know.
Meanwhile, it is reported that Hennessey also is threatening (by email to file an ethics complaint, due to the fact that four Indian legal professionals are credited by name in the motion to dismiss Hennessey's first lawsuit. The motion was signed and filed not by Indian lawyers, but by an attorney admitted to the bar of the D.C. federal court. Yet Hennessey claims that the legal research and drafting done by the Indian team amounts to "the unauthorized practice of law." This is an odd position to take, given that summer associates, paralegals, new-hires, and others not admitted to the bar perform legal research and drafting at every major law firm in the U.S., and often are credited at the end of legal papers in an "on the brief" section. Also, the work done in India in this case was carefully supervised by U.S.-admitted attorneys at every stage, both on-site in Mysore and in Washington D.C., where the final product was carefully reviewed and signed by duly admitted counsel of record in the case.
Here is Hennessey's statement about the new lawsuit he says he's preparing:
"Joseph Hennessey has joined John J. Beins and Seth D. Goldberg who have significant expertise in litigating consumer class action lawsuits -- as well as other business litigation. John Beins, Seth Goldman, Anthony Newman, Ernie McIntosh and I will be combining our various areas of expertise to identify those who have been victimized by the use of foreign legal process outsourcers. Collectively, we decided that rather than litigate an academic declaratory judgment action, we would bring an action for damages on a class wide basis. We have, for example, already heard a person who believes their HIPAA rights were violated when Indian doctors were video-conferenced to consult and make recommendations about a surgical procedure -- a procedure that went horribly wrong. Not only did this person not consent to consultation, but all of this persons private medical records were transferred to these Indian-based doctors -- a transfer that violated her HIPAA rights. So, stay tuned -- we are not at the end of this issue, we are at the beginning."
Meanwhile, it is reported that Hennessey also is threatening (by email to file an ethics complaint, due to the fact that four Indian legal professionals are credited by name in the motion to dismiss Hennessey's first lawsuit. The motion was signed and filed not by Indian lawyers, but by an attorney admitted to the bar of the D.C. federal court. Yet Hennessey claims that the legal research and drafting done by the Indian team amounts to "the unauthorized practice of law." This is an odd position to take, given that summer associates, paralegals, new-hires, and others not admitted to the bar perform legal research and drafting at every major law firm in the U.S., and often are credited at the end of legal papers in an "on the brief" section. Also, the work done in India in this case was carefully supervised by U.S.-admitted attorneys at every stage, both on-site in Mysore and in Washington D.C., where the final product was carefully reviewed and signed by duly admitted counsel of record in the case.
Here is Hennessey's statement about the new lawsuit he says he's preparing:
"Joseph Hennessey has joined John J. Beins and Seth D. Goldberg who have significant expertise in litigating consumer class action lawsuits -- as well as other business litigation. John Beins, Seth Goldman, Anthony Newman, Ernie McIntosh and I will be combining our various areas of expertise to identify those who have been victimized by the use of foreign legal process outsourcers. Collectively, we decided that rather than litigate an academic declaratory judgment action, we would bring an action for damages on a class wide basis. We have, for example, already heard a person who believes their HIPAA rights were violated when Indian doctors were video-conferenced to consult and make recommendations about a surgical procedure -- a procedure that went horribly wrong. Not only did this person not consent to consultation, but all of this persons private medical records were transferred to these Indian-based doctors -- a transfer that violated her HIPAA rights. So, stay tuned -- we are not at the end of this issue, we are at the beginning."
Subscribe to:
Posts (Atom)
