Meltdown boosts legal outsourcing

21 Nov 2008, 0406 hrs IST, Nikhila Henry, TNN

HYDERABAD: The global meltdown has turned a boon for legal services industry in the costs, they are searching for cheap and good quality legal aid through legal process outsourcing companies (LPOs). Around 100 LPOs have come up in the city in the last one year, a CEO of an LPO told TOI. Interestingly, around 70 per cent of them mushroomed in the past five months of the global crisis. Further, the growth of the industry under the prevailing circumstances is expected to be between 50 and 100 per cent. "There is tremendous growth in the market because the industry is more stable with clients from the US and UK thinking that LPOs are a good option to reduce costs and get good quality legal services," Quislex (LPO), CEO, Ram Vasudevan told TOI. Companies save 50 to 75 per cent of their costs on legal services once their work is outsourced. "Some companies have saved as much as $9,00,000 per deal just because they outsourced the work. There is no loss for clients if the LPO is reliable," Vasudevan said. LPOs, including Mind Quest, Pangea and Lawscribe and Quislex are cashing in on the boom. Most of these companies have a work force of 200 to 300 lawyers. Many big LPOs offer a variety of services, including legal help in mergers and acquisitions, contract analysis, contract procurement and litigation analysis. The companies which seek legal aid are mainly software companies and MNCs. Law students find the sector lucrative with pay packages in the range of Rs 10.5 lakh to Rs 17 lakh per annum. "While the meltdown is affecting many law firms, the students find LPOs a good avenue to work. Many such companies have come forward to recruit students from the university," HRD, IP, chair professor and head, Center for IP Law Studies, Nalsar University of Law, Dr V C Vivekanandan said. And the icing on the cake is that many LPOs are planning to induct fresh recruits in the summer of 2009.

“ The above article has been reprinted from http://www.livemint.com/2008/11/26010816/In-downturn-litigation-bonanz.html and LegalEase Solutions LLC does not hold any rights to the same”.

Posted By: Lakshmi S. Junior Associate, LegalEase Solutions.

US meltdown prompts LPOs to step up hiring

By outsourcing to Indian vendors, companies can save about 70 per cent in costs vis-À-vis law firms in America.

Adith Charlie; Posted Sep 29, 2008.

Mumbai, Sept 28 : At a time when the off-shoring industry is plagued with instances of employee lay-offs, companies providing legal process outsourcing (LPO) services are on a hiring spree as demand for litigation services from the US rises.
In the next six months to a year, several LPOs have plans to at least double headcount in order to cater to the increased work flow resulting from the recent turmoil in the US that has seen several financial institutions collapse.
The Wall Street crisis has resulted in increased litigation related to bankruptcy, mergers & acquisitions and other related aspects.
Rise in revenue
“In the last six months alone, our revenues have risen by over 100 per cent as US companies and law firms seek to outsource work related to electronic discovery and bankruptcy litigations. In order to cater to the incremental volumes, we need to make substantial additions to our workforce,” said Mr Sanjay Kamlani, Co-Founder & Co-CEO of LPO firm Pangea3, told Business Line.
The city-based company hopes to double its overall headcount from over 300 now in the next one year, he added.
For US companies and law firms, the pressure to put a throttle on costs is immense. By outsourcing to Indian vendors, companies can save about 70 per cent in costs vis-À-vis law firms in America.
UnitedLex plans
Another legal outsourcing firm, UnitedLex Corporation, has plans to more than treble its headcount to 1000 by the end of the current fiscal, according to the company’s Chief Solutions Officer, Mr Ajay Agrawal.
“These additions are essential owing to the quantum of work that we have just been awarded. About 75 per cent of our overall employee base will consist of legal and para-legal professionals,” said Mr Agrawal
Demand side constraints are few as India produces around 80,000 law graduates every year. The Chicago headquartered Mindrest plans to have about 700 lawyers on board by this year-end from 450 currently, according to Mr Rohan Dalal, Managing Director. “You may have demand for your services but if you do not have enough people on board, it does not really translate into anything. We are convinced of the long-term sustainability of our business model and hence are bullish on hiring,” Mr Dalal added.
Vendor consolidation
Many LPO officials believe the catastrophic repercussions of the sub-prime crisis are far from being over. Another side effect is vendor consolidation; in order to further reduce costs, US companies are looking at outsourcing legal processing as well as other business processes to the same vendor, said Dr Navtej Saluja, Vice President- Intellectual Property & Legal Services of KPO firm Evalueserve.
“Hence, only those back office firms that can offer services related to law, company restructuring and financial accounting under one roof will benefit going forward,” said Dr Saluja.
“ The above article has been reprinted from http://www.livemint.com/2008/11/26010816/In-downturn-litigation-bonanz.html
and LegalEase Solutions LLC does not hold any rights to the same”.

Posted By: Lakshmi S. Junior Associate, LegalEase Solutions

LPOs bloom as other sectors wilt
By: Chandran Iyer
Date: 2008-12-29

Pune:
To cut costs and tackle recession, US companies look at Legal Process Outsourcing units in India; Sector expects a growth of 60 to 70 per cent in 2009BLOODBATH on the Wall Street, particularly with the collapse of Lehman Brothers and the takeovers of Merrill Lynch and AIG, has made most business sectors, including IT and IT-enabled services, cringe with fear spreading a pall of gloom. These very factors are making the Legal Process Outsourcing (LPO) bloom in India as the spate of litigations in the United States are opening new business opportunities.In fact, NASSCOM expects a growth of 60 to 70 per cent in 2009 in the LPO business. "This is one sector which is going to have a tremendous growth during the times of recession. LPOs will witness a phenomenal growth because US companies will look towards this sector to cut cost," NASSCOM president Ganesh Natarajan told MiD DAY."This is one sector which will witness an upturn, while other sectors are witnessing a downturn," he added.Rajendra Vaidya, Chairman and Managing Director of EXL-Source, a city-based LPO said, "I know it is politically incorrect, but it is a fact that recession is proving to be a blessing in disguise for the nascent LPO industry which is expecting a good deal of business from the US in the form of litigation support activities, e-discovery, contract management and lot of other opportunities in the legal fraternity."According to Vaidya, who is also the director of Delivery of Loxodrome Solutions (India), US is scrambling for new markets like India which will cut cost by more than 50 per cent.US companies are facing severe cash crunch and the availability of credit is also going down. With litigation cases mounting because of the collapse and termination of contracts, US companies are eyeing India very seriously where availability of talent is high and the cost is low, making good business sense. "Recession has triggered a lot of property disputes and insurance companies have a hard time getting clear titles of the property. Litigation surrounding the companies is bound to increase. Besides, recession will force the companies to terminate many contracts which in turn will trigger many more litigations and thereby offering more scope for Indian LPOs," Vaidya added.The IT industry took 13 years to come to maturity, BPOs took half a decade and now LPOs are emerging in a big way. Most of LPOs are located in Pune, Noida, Delhi, Hyderabad, Bangalore and Chennai.
“ The above article has been reprinted from http://www.mid-day.com/news/2008/dec/291208-Rajendra-Vaidya-Lehman-Brothers-Merrill-Lynch-AIG-Legal-Process-Outsourcing-Wall-Street-NASSC.htm and LegalEase Solutions LLC does not hold any rights to the same”.
Posted By: Lakshmi S., Junior Associate, LegalEase Solutions.

Recession in US is good news for LPOs in India

6 Nov 2008, 0440 hrs IST, Ravi Teja Sharma , ET Bureau

NEW DELHI: At least one section of industry isn’t unhappy about the meltdown. The recession in the US is good news for the $200-250 million legal

process outsourcing (LPO) industry in India. While outsourcing of litigation work from the US and Europe has increased considerably, what is interesting is new forms of businesses like risk management, corporate compliance and know-your-customer (KYC) guidance work from a number of global corporates that have come up. Companies like Pangea3, UnitedLex and CPA Global consider risk management

and compliance a high growth area. UnitedLex’ risk team in India has seen a five-fold growth in the last six months. This is prompting them to hire at a time when other sectors are either freezing recruitments or are firing. “Regardless of the extent of recession, the regulatory environment will only become more strict so companies will need to comply,” says the co-CEO of Pangea3, Sanjay Kamlani. The LPO setup a new risk management and assurance group recently and this work is already 15% of Pangea3’s overall business. In today’s scenario, companies want to know their risk profile so that they can disclose and be transparent in order to comply with regulations. “We are working with a large heavy-machinery manufacturer in the US to understand the risk associated with the thousands of contracts they have with their vendors and suppliers,” says UnitedLex chief solution provider Ajay Agrawal. With more of this kind of work coming in, they have scaled up their operations and have gone from 98 to 330 employees in India. CPA Global’s India country head Bhaskar Bagchi says that the industry has been growing at a very fast pace and the current economic situation is a catalyst for even faster growth as corporates start to put pressure on the billing rates of international law firms. “Huge amount of work related to the recession is in the dialogue stage for us,” he adds. The company is in the process of taking its headcount up from the current 450 to 1,200 by July. Mr Kamlani feels that as work on the $700-billion troubled asset relief programme (TARP) with which the US treasury department plans to purchase distressed assets, especially mortgage-backed securities from the country’s banks starts, Indian LPOs could see a could see a lot more business. Mr Agrawal says, “This is a Y2K kind of an opportunity for us.”

“ The above article has been reprinted from http://economictimes.indiatimes.com/Infotech/Recession_in_US_is_good_news_for_LPOs_in_India/articleshow/3679496.cms and LegalEase Solutions LLC does not hold any rights to the same”.

Posted By: Lakshmi S. , Junior Associate Legalease Solutions.