Legal Offshoring: India’s Pie

In this highly competitive global market every corporation requires to work on minimal margins and they required adopting cost cutting measures and that is where outsourcing became imperative.

Legal Process Outsourcing (LPO) is the third big Leap of outsourcing industry in India, after Business Process Outsourcing (BPO) & Knowledge Process Outsourcing (KPO). LPO is an activity or practice to get legal support services from legal services’ firms or corporations.

In the beginning, LPO covered mostly low-end transcription work (Data management, Word Processing, Litigation support, Book-keeping and reconciliations etc.) but now LPO also includes a huge range of high end legal processes such as patent application drafting, legal research, pre-litigation documentation, advising clients, writing software licensing agreements and drafting distribution agreements.

The total market size of Global LPO business is around USD 250 billion. And out of this US alone captures two third of LPO business. The growing cost of Legal services in USA leads it to outsource or offshore the legal activity. It was very necessary for US law firms to obtain the Legal support services from outside to either save their business by cost cutting or for profit making.

There are a lot of examples of US law firms that were running their business successfully & were well known in their field but due to increasing cost in legal services they could not survive. And these failure firms proved to be a good learning example for rest of the firms or corporations and it became imperative for US law firms to outsource the legal support services.

India had already proved its reliability with its IT BPO & KPO services, so it emerged as a favorable destination for LPO business. The first legal outsourcing to India started back in 1995, when Bickel & Brewer the Dallas based litigation firm, with 34 lawyers opened an office in Hyderabad.

The next thing that gave an impetus to the industry was when General Electric, in 2001, added a legal division to their currently existing base of operations in India. This legal cell was specifically started to handle legal compliance and research for GE plastics and GE consumer finance (Divisions of GE capital). Thereafter, the industry witnessed a steady upswing in demand for outsourced legal services from India. And then the foreign players started coming in India.

This gave an opportunity to the Indian lawyers & students wanting to go abroad or want to earn hefty amount get good opportunity to work with legal outsourcing firms.

In India most of the Legal Process Outsourcing business revolves around three major activities.

Legal transcription and drafting services: Law firms have extensive documentation requirements, which normally get outsourced to India. This involves data entry or activities like sending correspondence, document management and indexing, drafting memos etc. This is the entry level, low value high volume task. Owing to low risks, this sometimes tops the priority lists for firms starting outsourcing.

Patent prosecution assistance: This is the hottest area in Legal Processes Outsourcing. It involves assistance in filing patent applications, infringement studies, IP asset management services, prior art searches etc.

Legal research: It involves performing legislative history research, jurisdiction studies and other typical case study researches that are common with the legal profession. When dea ing with corporate activities, like mergers and acquisitions legal due diligence of the potential targets or acquirers and their accompanying legal issues becomes imperative. This involves extensive data research etc and hence a lucrative outsourcing task.