The Commoditization of Legal Services

Every now and then an idea or meme seems to catch fire and become ubiquitous in a very short time. In the past couple weeks, discussions and examples of the growing commoditization of legal services has come from a number of fronts.

Marketing pushes from consumer-targeted, off-the-shelf legal forms companies like LegalZoom, LawDepot, and USLegalForms are examples of legal products replacing services. Similarly, companies targeting the small business market, like Direct Incorporation and Business in a Box, are attempting to carve out their own niches.

One interesting element of the trend is the actual language being used to describe it. Language that Robert J. Ambrogi nails in a recent post at Legal Blog Watch.

"Legal services are evolving from a highly bespoke, highly customized product toward becoming a commodity. As part of this evolution, legal work will be unbundled into its constituent tasks and many of those tasks will be standardized and systematized."

From the perspective of an LPO (which provides actual services, rather than off-the-shelf products), the key word in that passage is "unbundled". Because the value in legal process outsourcing is identifying which legal tasks can be efficiently unbundled and outsourced for significantly lower costs.

This idea of unbundling is also prominent in Richard Suskinds new book, "The End of Lawyers? Rethinking the Nature of Legal Services". This description from Oxford University Press cuts right to the chase:

"It is argued that the market is increasingly unlikely to tolerate expensive lawyers for tasks (guiding, advising, drafting, researching, problem-solving, and more) that can equally or better be discharged, directly or indirectly, by smart systems and processes. It follows, the book claims, that the jobs of many traditional lawyers will be substantially eroded and often eliminated. This is where the legal profession will be taken, it is argued, by two forces: by a market pull towards commoditisation and by pervasive development and uptake of information technology. At the same time, the book foresees new law jobs emerging which may be highly rewarding, even if very different from those of today. "

For another of the many voices discussing the commoditization of legal work, the Chicago Lawyer has an excellent overview.

Evaluating What Not To Outsource

Any conversation about which legal processes are prime candidates for outsourcing must also include evaluating work that is less suitable for outsourcing.

Obviously, LegalEase Solutions believes wholeheartedly in the value of targeted legal process outsourcing, but by the same token it would be disingenuous not to acknowledge that some legal work is not efficiently outsourced.

A quick review of work that is successfully and efficiently outsourced provides some broad-stroke common traits: the work is typically less complex, more repetitive, and provides time and cost efficiencies.

Conversely, it follows to reason that the first area of work that is best kept solely in-house are cases dealing with complex, uniquely fact-driven subject matter. A prime example would be IP litigation.

Work that has a very high level of complexity and case-specific data can practically become its own field of study, which means that the amount of time required to bring outside attorneys up to speed would outweigh the potential reduction in costs.

If you are an attorney who has identified additional legal work that is not appropriate for outsourcing, feel free to contribute to the discussion in the comments area.

India Business Law Journal

There was a very comprehensive overview on the state of the Legal Process Outsourcing market in the March issue of the India Business Law Journal. Industry leaders from top LPO's were interviewed, including LegalEase Solution's CEO Tariq Akbar. Here are some of the highlights of the subjects addressed, as well as observations about the industry quoted from the article:

• The cost factor. "Corporations are no longer willing to pay the high fees that are traditionally associated with the review process,which accounts for around 60% of litigation costs."

• Process efficiencies. "Once a project is underway, clients see other benefits like process efficiencies, quality improvements."

• Climbing up the value chain. "Once clients are comfortable that the quality of outsourced work is not compromised, it allows them to transition significantly more work both in terms of value and quantity."

• Crisis-driven demand. "The events occurring in the global economy are unprecedented … they are forcing companies of all sizes in all industries to ensure that they are spending every penny wisely."

• Outsourcing decision makers. "The major decision makers are the end clients of the law firms – the corporate legal departments who now want a lesser burden on their resources."

Trend Spotting

There is an interesting trend developing lately in terms of how large law firms are adapting their business models to incorporate LPO. Interesting, because it's evolving in a way few had predicted.

If you sort legal offices into three general categories, they shake out like this: In-house corporate counsel, large corporate law firms, and small/medium sized private practices. In many peoples' minds, the most likely LPO early adopters would be the in-house corporate counsels, because the culture of big business has already embraced outsourcing an array of other back office functions. That is, for corporations there is less of a mental shift required to see the value in LPO. Additionally, corporate attorneys already outsource significant amounts of work to outside counsel. Again, no change in worldview required.

Many industry watchers then site the small and midsize firms as the next enthusiastic users of LPO, thanks to the ability of an LPO to provide flexibility, e.g. overnight turnaround, ultra affordable pricing, and scalability to support peek demands on a smaller firm.

The sector that many thought would be the slowest to embrace LPO was the well established, conservative larger firms. The conventional wisdom was that these firms, with their seasonal hiring patterns, established hierarchies, and entrenched billable hours model would be the slowest to evolve based simply on inertia.

So much for conventional wisdom.

The trend that we're seeing take root is that of large firms actively aligning with an LPO to then present their services to corporate counsel in a convergence that benefits each party. The large firm gains an advantage over their competitors with the significant savings the LPO provides; the LPO benefits by the association with well established domestic firms; and the in-house counsel enjoys the dual benefit of cost savings managed by a firm with whom they already have a business relationship.

And it doesn't seem unreasonable to conclude that the driving force behind the trend is the recent financial crunch, which has forced corporate counsel to demand changes from the firms they traditionally hire.

Protecting Client Confidentialy through Personnel Management

We've discussed the tangible, hard-wired aspects of protecting client confidentiality through data security -- the systems an LPO needs to have in place to control data collection, as well as access and utilization.

The other aspect of protecting client confidentiality is a bit, well, squishier. It's not the binary, flow-chart dictated, password protected black and white of data systems. Instead, it is the softer science of personnel management and all that it entails -- personalities, histories, and motivations.

Softer, yes, but no less demanding and integral to the ethical obligation of ensuring confidentiality. So, to fully realize the duty of confidentiality, an LPO needs to compliment data integrity with a multi-faceted approach to personnel management.

Employee Vetting - The first step, clearly, is the completion of a thorough background and reference checks, as well as confirmation of professional standing.

Contractual Provisions - Each employee - onshore and offshore - must be subject to Confidentiality and Non-Disclosure Agreements.

Education and Training - Admission to the Bar in most jurisdictions is contingent on passing the Multistate Professional Responsibility Examination, so it reasons to follow that offshore attorneys should be proficient in the same model rules.

Business to Business - An additional mechanism that can be employed is an individual confidentiality agreement between the LPO and counsel.The ABA strongly advises these agreements, and the Association of the Bar of the City of New York (Ethics Opinion 2006-3) recommends “contractual provisions addressing confidentiality and remedies in the event of breach, and periodic reminders regarding confidentiality.”

Corporate Culture - Another consideration for an LPO is cultivating a corporate culture that puts a premium on low attrition. A stable work force to some degree reflects company loyalty, and it can mitigate confidentiality risks by minimizing the number of former employees in circulation


Just like data systems need ongoing QA efforts, personnel protocols also need periodic reinforcement to be maximized. Personnel management within an LPO -- in the service of protecting client confidentiality -- must be understood to be an continual process.

The Paperless Office and Data Security

There are a number of components to ensuring data security within an LPO. We’ve discussed the importance of onshore servers for housing all data.

One fundamental purpose of the onshore server is to allow offshore access to information without actually capturing that information. Furthering the safeguard against third-party personnel capturing any data is the implementation of the paperless offshore office.

Obviously, the paperless office has no, um, paper. In the event that any paper or writing instruments are occasionally necessary, it is an important requirement to shred the paper at the end of every shift and collect all writing instruments.

But the paperless office goes further than that, encompassing a complete defense against any method of capturing data, including:

• Restricted computer functionality for individual computers with limited user rights and disabled media drives and USB/printer ports
• Secure individual computers with PC firewall and antivirus protection
• External internet access restricted to certain sites/computers within office locations
• Network monitoring and tracking capable of producing audit trail records of all files accessed on the server and logs of all incoming and outgoing mail from the servers
• A secure internet network incorporating Proxy/Firewall NAT and Port filtering
• The prohibition of cell phones and cameras in any area where client work is processed

Onshore Servers and Data Security

During March we’ll be discussing part two of our series Ethical Imperatives For An LPO: Protecting Client Confidentiality. And a key component to protecting confidentiality is data security.

For U.S. attorneys considering the value of outsourcing legal work to an LPO, there is one question that must come first regarding data security: Are the LPO’s servers on U.S. soil?

All other security safeguards come second.

When all data is stored in onshore servers, offshore attorneys are only accessing the data to complete the work, and not holding or storing the data on offshore computers or servers.

Why is this so crucial? Because data stored on servers is subject to the state and federal laws applicable to the physical location of the data. That means for data housed on domestic servers, U.S. law applies. In the rare event of some sort of breach, the originating counsel needs to retain as much recourse as possible, and part of that includes U.S. jurisdiction over the server.

Data stored on offshore servers puts the data beyond the jurisdiction of established U.S. security laws. In this instance, the originating counsel would have uncertain control over investigating and/or enforcing security concerns.

Additionally, while the risk of third-party data security breaches (that’s a lot of syllables to say “hacker”) is the same regardless of the server’s physical location, the United States’ long-arm statutes allow plaintiffs to extend personal jurisdiction throughout the country. Just one more advantage to requiring onshore servers from your LPO.

Conflict Checking Software

We’ve discussed the ethical obligation an LPO has to protect counsel and counsel’s clients from conflicts of interest, as well as the need for a comprehensive conflict checking form to capture searchable data.

Once that data is collected, a mechanism must be in place to allow sufficient cross-referencing to detect potential conflicts. Companies have essentially three types of options in terms of conflict checking programs: Stand Alone conflict checking software, Custom-Developed databases, or integrated Case Management or Time Management programs that include a conflict checking functionality.

Stand Alone conflict checking software programs can range in complexity and, accordingly, price. One caveat to consider is the potential for redundancy if a Case Management or Time Management system is already capturing this information. A couple examples of Stand Alone programs are Conflict Checker and RTG Conflicts.

Custom-developed databases can be built in products like Access. Like any system, there are pros and cons. The upside here is that the system will be completely customized to your company’s specific needs. The cons are the cost of custom programming, the cost of future upgrades, and the potential for redundancies – if you are also utilizing a Case Management or Time Management system you may already be inputting much of this information in the existing system.

The other option is to utilize your organization’s existing Case Management or Time Management system if it incorporates a conflict checking feature. In this scenario, the management system that is already in place to track projects and hours can become a one-stop hub for all information, including conflict checking.

Case Management or Time Management software can be web based or locally hosted, and a couple examples are Bill 4 Time and AbacusLaw.

The products mentioned are obviously not exhaustive or even necessarily endorsed. If you have products you’d like to add to the discussion, feel free to note them in the comments section.

Conflict Checking Request Form

LPOs have a professional and ethical duty to the counsel they support to protect both counsel and the counsel’s clients from conflicts of interest. The ABA’s Model Rule of Professional Conduct 1.7 states: “A legal outsourcing company should have a conflicts checking procedure in place that… includes avoidance of a concurrent conflict of interest with a client already engaged, and avoidance of a significant risk that the representation of one client may be materially limited by responsibilities to another client.”

In order for an LPO to thoroughly vet potential or perceived conflicts, the LPO needs a comprehensive Conflict Checking Request Form to capture sufficient information to populate cross referencing. Conflict checking should comprise information about counsel’s firm and participants, the counsel’s client, a business’s history and participants, as well as an overview of the case at hand.

Counsel Information

• Firm name
• Firm’s counsel involved with the case
• Associates or paralegals involved (including maiden names if possible)
• Adverse Party’s Counsel’s Firm Name

Counsel’s Client Information

• Names of all involved parties (including maiden names if possible)
• Family members
• Names of adverse parties

For corporate or business entities, also include:

• Corporate and business names
• Any trade or alternative names under which the entity carries on business
• Names of the parent company or controlling shareholder of a corporate client
• Business names of any subsidiaries or other relevant affiliated companies
• Names of officers and directors of the corporate client, any subsidiaries, and the parent company

Matter

• Description of Matter that will include an overview of the case or complaint.

LPO’s obviously serve the counsel who partner with them, but they also, by extension, serve the counsel’s interest in their client. To act as a complete outsourcing partner, the LPO must take conflict avoidance as seriously as counsel does, and a thorough Conflict Checking Request Form is a crucial component of that obligation.

Protecting Attorneys' Ethical Obligations

Every business assesses the obstacles in its path – hurdles that can range from a crowded marketplace to shifting customer trends to a lack of eyeballs. From the perspective of a Legal Process Outsourcing firm, one of those hurdles is attorney reticence.

In-house counsel and firm-based attorneys both share a strong and altogether appropriate sense of loyalty to their clients. So when an attorney weighs the pros and cons of outsourcing legal work, the scale looks a little something like this: On one side is the efficiency and significant cost savings that every client is looking for, and on the other side is the nagging twinge of concern that outsourcing could expose their client to certain risks, like conflicts of interest.

Attorneys work hard to ensure that neither their firm nor their employees have any competing interests that would conflict with the best interests of their client. And attorneys have every right to expect an extension of that trust from an LPO.

That's why it's crucial for an LPO to step up and 1) acknowledge those concerns as legitimate, and 2) proactively take every step to protect both the original counsel and the counsel's client.

In-house and firm-based counsels’ conservative approach to LPOs makes sense when you consider the relatively young nature of legal outsourcing. Other business process outsourcing areas have decades of history and a track record that can be evaluated, whereas LPO is relatively new to the game. So, it makes sense that attorney trepidation stems from lack of familiarity.

That’s why one of the first orders of business for an LPO – and a mandate at LegalEase Solutions – must be protecting the ethical standards that counsel promises their clients.

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.

Legal eagles soar as markets crash

24 Nov 2008, Manoj Mitta, TNN
While BPO companies are feeling the heat of the global meltdown and resorting to layoffs and other cost cutting measures, their LPO
(legal process outsourcing) counterparts are thriving like never before because of the legal activity that has been generated by the sub-prime crisis in US. What is more, the LPO segment reflects the prevailing boom in the legal services industry in India. Law firms dealing with foreign companies operating in India have also seen an increase in their turnover, even if their work is now more about post-meltdown issues like restructuring, downsizing, layoffs, closure of branches, winding up of subsidiaries and termination notices to collaborators and franchisees. Take the example of Delhi-based Titus & Co, whose clientele consists almost entirely of foreign companies and governments. Its managing partner Diljeet Titus said, "We have had at least a 50% rise in the volume of transactional work ever since Lehman Brothers imploded two months ago." Since these transactions are mostly related to cost-cutting measures, Titus did his bit for his clients by offering a 20% discount in his fee. "The reduction in our fee is made up for by the increase in the quantum of work as well as the dollar rate," he added. Fox Mandal Little, the largest law firm in the country, displays more signs of it being business-as-usual. In the last two months, it has recruited 27 more lawyers at various levels, opened its 13th office (which is in Kochi) and forged ahead with negotiations to acquire another law firm. It is poised to recruit more lawyers for its recently launched LPO subsidiary, Legal Circle. The firm's managing partner Som Mandal said, "We are most bullish about our LPO because of the sheer deluge of enquiries we have received from US to do litigation support from India." The timing of the meltdown could not have been better for LPO companies as the e-discovery law, governing the storage and management of electronic data that might be relevant to litigation, came into effect in US only two years ago. The meltdown has forced more American companies to turn to LPO set-ups in India for help because of the enormous cost differential. For performing document review, a key aspect of the e-discovery process, a senior associate in US is paid $200-300 per hour while an LPO based in India charges barely $25-30 per hour for the same work, according to Mandal's estimate. Not surprisingly, Pangea3, one of India's largest LPO companies, claims to have registered 100% increase in volumes in the last six months. "We are witnessing an extraordinary influx of work directly or indirectly related to the sub-prime crisis," said CEO Sanjay Kamlani. The surge in Pangea3's e-discovery work involves court disputes among investors, lenders, borrowers, homeowners and banks. Post-meltdown, it is also cashing in on the demand for greater scrutiny of financial transactions and corporate governance. As Pangea3 CEO Sanjay Kamlani put it, "cost cutting measures have spared budgets only for non-discretionary items like legal services related to litigations and regulatory compliance. While BPOs must deal with delayed decision making, uncertainty and wait for new government policies in US, LPOs grow business almost as a function of the slowdown." For all the surge in business for LPOs and law firms, there is one part of the legal services industry that seems to have remained relatively unaffected: the vast majority of individual lawyers involved in litigation within the country. P H Parekh, president of Supreme Court bar association, dismissed the suggestion that senior advocates like him were under pressure to accept a fee cut in view of the economic slump. "The demand for top lawyers is so high and the supply of them so little, the worst that may happen is that the number of briefs we return for want of time may come down," Parekh said.
“ The above article has been reprinted from ://timesofindia.indiatimes.com/Business/Legal_eagles_soar_as_markets_crash/articleshow/3748948.cms and LegalEase Solutions LLC does not hold any rights to the same”.

In downturn, litigation bonanza for Indian legal outsourcers

Posted: Wed, Nov 26 2008.
In downturn, litigation bonanza for Indian legal outsourcers
Aruna Viswanatha

New Delhi: Amid talk of job cuts and lower-than-expected results, legal offshorers based in India say they are bucking the trend.
If the first wave of work for legal process outsourcing companies earlier this year stemmed from the rise in US lawsuits related to the subprime mortgage meltdown, the latest wave builds on that, but is also tied even more directly to the crisis; Indian legal outsourcers are now processing American foreclosures, and valuing the toxic assets at the heart of the trouble.

New opportunities: Bangalore-based Clutch Group. Legal offshorers are now getting work valuing toxic assets and processing home foreclosures. Hemant Mishra / MintThe US treasury department’s $700 billion (Rs35 trillion now) plan to purchase troubled assets from the ailing financial institutions and directly take stakes in the banks is, as expected, a boon for attorneys. What wasn’t expected is just how much of it might move offshore.
“In the short to medium term, there is rising litigation, the valuation of assets in the bailout package, bankruptcy, and it’s coming from all sides,” says Anand Sharma, chief financial officer at the legal services provider, Computer Patent Annuities Ltd (CPA). “Forget about cost arbitrage, I don’t think the US is capable of handling this entire work.”
Indian firms are grabbing pieces of it.
One newer player in the industry, UnitedLex Corp., says it has grown by 400% this year in staffing, from 98 people at the end of last year to some 520 now, with plans to expand to 1,000 by March. Another firm, Pangea3 Llc., says its revenues doubled in size in the first quarter, and doubled again since then. CPA, too, says it grew revenues by 30% this quarter from the corresponding period last year, while Mumbai-based Mindcrest Inc. says it grew 45-50% since April. Revenues for the Bangalore-based Clutch Group Llc., the company says, have doubled this year.
The entire industry reported revenues of $225 million (or Rs902 crore then) in 2007, and is expected to generate revenues of around $640 million by end-2010, according to the research firm ValueNotes Database Pvt. Ltd.
Much of the work specifically tied to the bailout package is yet to come, and will likely start in early 2009. But firms have already started handling related reviews of bank assets. UnitedLex, for example, has seen this area of its business grow by 50% since late March, according to Ajay Agrawal, founder and chief solutions officer. “There are millions of assets shuffling hands, and a lot of work,” says Agrawal, who specialized in asset-backed securities as a lawyer in the US.
It’s not just the highly technical work of reviewing complex derivatives that offshorers are gunning for. Home foreclosures and individual bankruptcies have generally been processed by local lawyers. Bits of the work, on loans held by banks with captive centres in India, have previously moved offshore. But now, with almost 280,000 foreclosures in October alone according to RealtyTrac Inc., up 25% from the same month last year, and up 5% from the month before, even after several states mandated delays on foreclosures, the momentum for offshoring has clearly been building up.
“Volume is a huge driver over the past 18 months, and it still has not plateaued,” says Agrawal, who claims that the foreclosure and bankruptcy processing business at UnitedLex took off at the beginning of the year, and has doubled every quarter since.
Bangalore-based Clutch Group is aggressively pitching itself for a newer piece of this market on foreclosures, one that requires court intervention and typically hasn’t come offshore yet. Lenders spend around $1,000 on this type of foreclosure in the US, and the firm estimates that around 60% of the work done before the lawyers file the case is now segregated and can be brought to India.
The firm is in trial runs with a few clients, according to Clutch Group CEO Abhi Shah. “In the next three-six months, it will be substantial,” he says. “Based on the volume of foreclosures for the past five years, it’s a 45-degree arrow going to the right.”
Foreclosure processing aside, much of the anticipated legal business falls under the larger umbrella of “risk assessment”. Pangea3’s co-chief executive Sanjay Kamlani describes one long-standing technology client who tapped the firm to review all of its customer agreements to assess the likelihood of termination, and what might occur in a change of control. The firm did the same on 25,000 open contracts for another telecom client, he says.
And just over the horizon, once US President-elect Barack Obama takes office in late January, observers expect new regulations overhauling accounting and disclosure requirements for public companies; another legal bonanza that offshore providers are gearing up for.
But the bulk of legal outsourcing revenue is still from the labour-intensive document review projects that any large litigation requires, and interest in outsourcing that work is following a well-trodden route.
Shah describes one large law firm client that signed on with Clutch Group for an 80-attorney document review on a case related to the financial crisis, but kept it on shore. Three months into the project, as cost shot up, the firm tested Indian waters and moved five attorneys offshore. Three weeks later, the number doubled to 10, and two months later, it tripled to 30.
“Before, clients had the luxury of saying, ‘This is interesting, let’s think about it,’” says Shah. “But then they spent $500 million (on a legal budget), they can’t do that any more, and the stakes are higher.”
“ 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”.

LegalEase Solutions LLC among the Top 50 Emerging Companies in the United States-FundingPost

Michigan based LegalEase Solutions LLC, was adjudged as one among the Top 50 Emerging companies at the 5th Annual Pitch Across America Competition held by FundingPost."We are proud to have LegalEase as a winner of this year's competition," said Joe Rubin, Director FundingPost. "Their blended model efficiently provides needed services to an expansive market. We expect to hear a lot of good news from them in the coming months." LegalEase provides superior legal support services onshore and offshore enabling corporate legal departments and law firms to become more cost efficient and effective. The Company with five offices world over works virtually 24hrs and is driven by its huge emphasis on quality confidentiality and information security.

The winners are adjudged by FundingPost's 130+ judges' panel consisting of angel and venture investors. The Largest Venture competition ever hosted evaluates the companies on a 1 to 10 scale (10 being the best) and takes important parameters like professionalism development (customers and Revenue), competitive advantage, etc.., into account. FundingPost, the largest Venture Exchange acts as the connecting point between venture capitalists and Entrepreneurs for over seven and half years. FundingPost has had the opportunities to work with thousands of Angel and Venture Capital Investors over the past representing over $102.96 Billion.

Commenting on the win LegalEase Solution's CEO,Mr. Tariq M. Akbar said "I am glad that our focus on quality, processes and delivery has made us a clear leader with our growing client base and now the investment community with this recognition from Funding Post."

An interesting post

I thought this person had their perspective and apprehensions right on
Just reproducing from their blog. LegalEase has no right over the below material.

Life in a LPO
http://bangalorebrouhaha.wordpress.com/2008/09/23/life-in-a-lpo/
When I arrived in Bangalore two years ago I thought that the legal outsourcing craze was going to offer the perfect fit for me professionally. Before arriving I had contacted a small LPO based in the US and in Bangalore. I was offered a job and I eagerly looked forward to jumping in. On my first day of work I was told their manager was retiring and I was offered a position running the whole show. I was flattered, excited and very, very naive! I really had no idea what running such a project would entail.
Let me give you a little summary of what an LPO is. Basically, legal outsourcing is supposed to be a way for American and UK firms to cut costs for their clients by utilizing the English speaking, common-law based Indian attorneys who are willing to work for pennies on the dollar. Theoretically, it should be fine. It has worked in so many other fields. Outsourcing has basically built Bangalore and the spectacular successes of outsourcing firms are legendary. Unfortunately, the concept does not actually translate that well into legal work. Some firms are content with low level document processing and review. That kind of work is probably perfect for the LPO model. However other firms are trying to break into research and drafting of documents and that is where the entire LPO model looks very shaky. The very basic reason is that a person graduating from and Indian law school (except for one or two) really does not have the qualifications, the background, the knowledge or the ability to produce work that looks like it was produced by an American attorney. There is no emphasis on writing in Indian law schools.
What LPOs tend to do is to hire a few people who graduated from US law schools or who have practical experience working abroad. Those people are put in charge of a few more people who graduated from Indian law schools. These “teams” are supposed to work on projects from the US and return a document that meets US standards. In reality, the people in charge of the team end up either doing most of the work themselves or spending inordinate amounts of time correcting and editing the work of the teammates.
There are companies that are now training Indian lawyers for the LPO industry. This is a great idea. The problem is most LPOs feel they can do the training in-house. I just am not sure if you can impart an American legal education in a series of one-hour lectures over a few months!
There was great hope for the LPO industry. Some of the big outsourcing companies were talking about jumping in. I was told by one company that they hoped to hire 2000 attorneys over the next two years. That was a year ago and from what I hear, they don’t have more than a skeleton staff still. It is very hard to find qualified people and more difficult to keep qualified people.

Sun Microsystems Legal Outsourcing Approach

Introduction

Connie Brenton, Assistant General Counsel for Sun Microsystems recently presented at the IAOP Legal Outsourcing Chapter's second session. She presented Sun's approach to legal outsourcing and how they actualized real benefits through their foray

Findings

Some key points from her presentation were:

• They started in 2005. From then to now, there has been a marked difference in how the market and talent pool has matured
• They did not just assign a project and wait for results. They provided a project manager, training, templates, assessed the cost of completing the assignment completely onshore and set a target for their savings margin they needed to achieve to make this effort worthwhile
• They used an innovative methods to evaluate the offshore bidders for the project and did not base it solely on price. They did not pick the lowest bid
• They use multiple offshore vendors so as to minimize their dependence on just one provider
• To quote Connie, their cost savings and benefit from using an offshore vendor to complete their project was wildly successful.

Recommendations

Some of our own recommendations to add to the above are:

• look for sufficient onshore support while rolling projects out. A blended model of onshore/ offshore resources works best
• run pilots to asses the complexity and scope of projects before assigning any expectations
• not all types of legal work can or should be offshored
• look for the cost savings as a percentage of the onshore spend
  

Conclusion

In conclusion, legal outsourcing is a tried and tested method to manage some of corporate counsel's spend on outside counsel. It's time corporate counsel start to leverage its advantages

REDEFINING BOUNDARIES; REDEFINING LEGAL SERVICES

Legal Outsourcing is a nascent industry, which optimizes the modern day technology advantage by converging talents worldwide for providing globalized legal solutions. For many, legal outsourcing still means transcription, updating legal databases and quasi-legal functions like litigation support for multinationals. But many companies offer premium legal support solutions including drafting of trial and appellate briefs, pleadings and research memoranda at a fraction of the cost that typical US law firms would charge. Legal Process Outsourcing throws open endless possibilities by optimizing technology and talents.
In an industry where time is money, what would be an easy solution for a bizarre legal issue regarding recognition of a foreign court’s judgment in another sovereign state? You may either want to reinvent the wheel doing all the research yourself, surfing through an endless list of precedents which, at times may only remotely agree to your point and you have only four days at your disposal. All other assignments demanding your immediate attention may have to be kicked to the backburner and obviously, this means loss of productive hours and in turn loss of time, money and energy. Or, in the alternative, simply outsource your problem to an LPO! This is exactly what a Canadian client did and we, at LegalEase got an amazing opportunity to be part of an assignment of global ramifications.
The issue involved the determination rights of an estranged couple, entangled in the laws of two independent sovereign states, UK and Canada. It was an uneasy terrain since international law and treaties applicable to the case turned out to be an amorphous baggage of provisions with less binding effect, even on concurring states. In fact, finding the right statute and case laws was something like searching for a needle in the haystack. Yet, we managed to finish the research in a flash turn around time of four working days, drafting a perfect case for the client with adequate statutory and legal backing for the recognition of UK bankruptcy judgments in Canada. The opposite party, on reading the memo prepared by LegalEase Solutions abandoned his plans to proceed against our client and opted for an out-of-the court settlement entirely on our client’s terms!
LPOs like LegalEase employ talent from the cream of the crop for providing legal support services to clients worldwide. The company employs world class technology and makes use of encrypted secure network for data transmission to allay the apprehensions of offshore clients regarding confidentiality. Legal Outsourcing is poised for a steady growth as burgeoning market provides ample scope for diversification. LegalEase is providing a bunch of value–added services ranging from high-end research and drafting to support services like document review, contract drafting, lease abstraction, summarization of pre-trial documents, legal coding and analyzing and has much more are in the offing. Of course, the global legal landscape has changed as never before and remedy for complex legal issues are just a mouse click away.
Author: Seema Sarathkumar
Associate, LegalEase Solutions, Kochi. India.

LEGAL SOLUTIONS AT 'EASE'

LEGAL SOLUTIONS AT ‘EASE’
The legal industry has seen a sea of change with Legal Process Outsourcing emerging as a necessity for legal departments and law firms to cut costs and stay competitive. After the laudatory BPO success, India, with its huge pool of English speaking and common law system trained lawyers, is treading fast toward becoming the global leader in the LPO sector, and by 2015, the LPO sector is expected to be worth $3 billion with India stealing 60% of the market.
Legal services continue to be less affordable with law firms increasing their billable rates every year in the Western nations. Especially in the US, global corporations are realizing that in order to survive heavy competition, the need of the hour is to keep their legal costs tight, while continuing to combat the increasing amount of litigation they face. In order to face this challenge, Legal profession as such is undergoing a transition, depending heavily on LPOs for support. At this juncture, LegalEase has gained timely market recognition as the leading LPO provider.
LegalEase Solutions is a Michigan based legal outsourcing company with significant experience and expertise in the legal and business fields. The company began its operation in India with 5 employees at Cochin in November, 2005. At present, LegalEase has three offices world-wide, in Michigan, Chennai and Cochin, and has clients in 38 States in US, in Canada and the U.K. The company’s clientele includes experienced solo practitioners, reputed law firms, major automobile manufacturing companies, insurance companies, Fortune 500 and Global 2000 legal departments, large legal auditing and analysis firms etc.
To quote Tariq Hafeez, the Founder cum President of and General Counsel for LegalEase Solutions LLC, “our mission is to help lawyers and departments become more competitive, efficient and cost effective by providing high quality, accurate and affordable legal products and services. Further, the company aims at making a difference in the global communities it operates by providing opportunity and leveraging our expertise in the legal field to make a social impact.”
LegalEase offers various legal technology products and support via its strategic partnerships which include:
· Legal research and writing
· Transactional work
· Document review
· Litigation support
According to Tariq Akbar, CEO of LegalEase, “there are enough reasons why the clients can expect top notch quality from the company. LegalEase uses a blended model to provide its services. Experienced US attorneys control all projects through their lifecycles while Indian offices provide them with all support they might need. Attorneys in India are given intensive training on US law and use of online tools such as Lexis Nexis before any work is allotted to them. Once the work is done by the Indian attorneys, the finished product is reviewed by the US attorneys. All products citing case law will be accompanied by a list of shepardized cases so that one can always be certain that the cases are good law. Further, all information from clients is collected using standardized templates and exchanged via secure encrypted mail, avoiding any concern over security issues.”
A recent research memo prepared by LegalEase on the recognition of UK bankruptcy judgment in Canada speaks volumes on how big a role LPOs like LegalEase can play in the global legal scenario. The Legal Memorandum prepared by LegalEase facilitated a speedy out-of-court settlement between a divorced UK citizen, declared as bankrupt by the UK bankruptcy court, and a Canadian lady, in a suit filed by the lady before the Canadian court. The Canadian law firm representing the husband contacted LegalEase US, which in turn, sent the matter to its office in India. Though the case presented uneasy factual conundrum where the subject matter was intertwined by the laws of two independent sovereign nations, LegalEase managed to prepare the research memo in a quick turnaround time of 4 working days. The research finding by LegalEase practically sealed the opposite party’s case since statutes and precedents provided ample authority for recognition of UK bankruptcy judgment in Canada. Interestingly, reading the memo prepared by LegalEase Solutions, the opposite party opted for an out-of-court settlement. In an industry where time is money, it is amazing that a Legal Outsourcing Company could provide premium legal support solutions like this to busy lawyers in record time. Obviously, LPO’s like LegalEase can afford the top notch technology and make use of talents worldwide.
LegalEase’s progress has been the result of a concerted effort of the company’s employees, management, Board of Advisors, and especially clients, for their continuing faith in the quality of the legal support provided by the company. According to Seema Sarathkumar, Associate, LegalEase, Cochin, “At LegalEase, training is not just provided at the beginning, but is an ever-going process.” “At LegalEase, we work together as a family, upholding our motto, “Think Forward; Think One” which helps us stay focused on what we do, and interestingly, the company probably has the lowest rate of employee attrition among Indian LPOs” says Pooja Mohan, Manager of Operations, LegalEase, Cochin.
In this era, where legal profession is set for a major change, LPOs like LegalEase have a promising future. The clients started realizing that they can get better legal service from LPOs at a much lower cost than that of traditional law firms. LPO is emerging as an attractive proposition not only for outside corporations, but also for domestic entrepreneurs. Commoditization and standardization of legal services being the modern ‘mantra’, LPOs can play a much bigger role in the coming years.
The time is not far when LPOs like LegalEase, with its judicious blending of legal cost with time, productivity and quality, come to the forefront of the mind of clients when they seek quality legal service. The client testimonials underscore the progress that LegalEase has made so far in the industry. Clients have begun to perceive LPOs as future legal support providers, and indeed, we look forward to the future and move ahead, with elan.

MANOJ.P.M.
(The author holds Masters Degree in Commercial Law and is presently working as Junior Associate at Legalease Solutions India Pvt. Ltd. Cochin.)

Legal Process Outsourcing (LPO): 2007 And Beyond

Legal Process Outsourcing (LPO): 2007 And Beyond
Rajashree on -->20 Feb 2008
Over the course of the last couple of years leading law firms have begun to wake up to the reality that we live and operate in a global marketplace. Technology enables an increasing array of legal support services and higher value legal work to be outsourced offshore. The legal profession is now starting to take advantage of the labor arbitrage that has been exploited by other industries for well over a decade. Throughout 2006 and 2007 the offshore legal outsourcing market also witnessed the entry of some of the world’s largest Business Process Outsourcing (BPOs) companies together with a significant level of venture capital and private equity funding.

This article will examine the driving forces behind the emergence of the LPO industry and how it has developed over the last few years. I will also be offering some insight into the direction the industry will take in 2008 and beyond. Finally, I intend to take a more detailed look at the impact that the recently passed UK Legal Services Bill will have on the offshore legal outsourcing market. I am both delighted and fortunate to have contributions to this article from Ron Friedman, Senior Vice President, Marketing at Integreon (http://integreon.com/) and Neeraja Kandala, Senior Research Analyst with ValueNotes (http://www.valuenotes.biz/).

The Driving Forces
The demand for lower cost legal services resulted directly from increasingly cost-conscious U.S. and U.K. corporate clients. The difference between the law and other industries is that outsourcing in the legal market has been client rather than industry driven. In the legal profession, it was not law firms, but corporate legal departments that were the early proponents of the benefits of legal outsourcing. These major corporate clients are now increasing the pressure on their law firms to offer an alternative solution. Historically major law firms on both sides of the Atlantic achieved huge levels of profitability through leveraging their junior associates. The Los Angeles Daily Journal announced earlier this year that pay scales for first-year attorneys rose yet again with a number of firms hitting a staggering $160,000 annual starting salary. Law firm leaders insist that these increases have resulted from U.S. domestic economic forces, necessitating a policy of “Keeping up with the Joneses” in order to retain the top law school talent. The fully loaded cost to the firm of a junior associate at these salary levels will be in excess of $250,000 per annum. Partners look to bill these associates out at hourly rates of $300- $400 plus per hour. These rates simply do not wash any more with major corporate clients when it comes to routine level legal support work such as basic document drafting, litigation support or document review. Over the course of the last 12 months I have spoken to senior executives and managing partners at major law firms who have been advised in no uncertain terms that to retain their corporate client business they must cut their legal fees and offer an offshore alternative. KPMG has estimated that document review can account for between 58% and 90% of the total cost of litigation, and corporate clients view this type of legal work as routine. Law firms are being compelled by their clients to consider offshore outsourcing as a viable strategic solution. 2007 was the year that corporate clients confirmed they were no longer prepared simply to sign a blank check when it comes to paying their attorney’s bills.
Consolidation and Maturation of the industry
Since 2003, in India alone the number of companies offering legal process outsourcing services to both corporations and U.S. and U.K. law firms has grown to well over 100. For further information on the growing number of companies offering offshore legal services check out Ron Friedman and Joy London’s updated list at http://www.prismlegal.com/index.php?option=content&task=viewid=88&Itemid=70#List and the July 2007 ValueNotes report Offshoring Legal Services to India: an Update http://www.sourcingnotes.com/content/view/71/54/.
If 2007 can be categorized as the year when the number of LPO players across India exploded and major law firms began to explore the labor arbitrage benefits available through outsourcing offshore, then the picture will start to change again in 2008. Even while a large number of “mom and pop shops” were clinging on to the major players’ coat tails and jumping on the LPO bandwagon there was evidence of consolidation. This will only increase throughout 2008 and beyond. The dynamic movement within the LPO industry has not gone unnoticed in the private equity and venture capital sectors. The confidence that investors have demonstrated in the industry throughout 2007 illustrates the bright prospects for the coming year. In November this year Infosys, India’s second largest IT company, signaled their intent on entering the legal outsourcing market with the launch of their own legal process outsourcing operation. Established LPOs including Pangea3, Jurimatrix and SDD Global have attracted a significant level of private equity and venture capital funding. 2007 also witnessed the first acquisition of an onshore provider of outsourced legal services, CBF Group Inc, by a company traditionally viewed as being a leading offshore financial and legal services outsourcing company, Integreon. This type of activity has placed legal outsourcing companies in the position to scale up dramatically.According to the independent research company ValueNotes in their July 2007 report, “Offshoring Legal Services to India - An Update”, the revenues from legal services offshoring are forecast to grow from $146 million in 2006 to $640 million by the end of 2010. The legal outsourcing industry in India currently employs around 7,500 people and this number is expected to rise to 32,000 by 2010. Neeraja Kandala, the analyst behind the ValueNotes updated report, believes that consolidation is inevitable:
“Most Indian legal service vendors are self-funded, and may not have the capability to develop adequate marketing infrastructure without VC funding. For a large number of the smaller vendors, growth beyond a point will be difficult. While a few will manage to grow given their strong onshore presence, several smaller players will be vulnerable. On the other hand, the interest of large BPOs such as Infosys and HCL in this space is growing. As these BPOs look to build presence and scale rapidly, the acquisition of smaller vendors is an option. Though there is not much activity yet, over time we will see consolidation, with large BPOs and LPOs acquiring capacity and capability.”
Ron Friedman, Senior Vice-President of Marketing for Integreon and one of the world’s leading authorities on knowledge support strategies and the legal outsourcing industry generally provides his view on the consolidation of the LPO marketplace.
“As a general rule, industries consolidate as they mature. In the legal market, we see evidence of that now with electronic discovery vendors and large law firms. Even the traditionally fragmented legal software market is consolidating as LexisNexis and Thomson-West acquire smaller software players.
So I expect that the LPO market will not be an exception. Of course, guessing the time frame is always hard, but I suspect it will consolidate in the next two to three years. Whether that is a result of organic growth of some plus attrition of others or by acquisition is too early to say.
For LPOs, scale will drive consolidation. Scale is important for three reasons. First, it supports operating efficiencies. While lower offshore labor costs continue to offer significant savings today, in the future law firms will expect further savings from process improvements. Achieving these requires a large enough volume of work to gain the requisite experience and resources to re-engineer work flows. Second, scale means being able to offer a range of services which law firms will find valuable as they grow comfortable with offshoring and seek to outsource additional functions to a single supplier. And third, scale allows an LPO to recruit the best talent. Though talent is still readily available, the supply is limited, even in India. Larger operations will be able to invest in recruiting and, more importantly, to offer desirable career paths for the best workers.
Size will also help address whatever reservations law firms may have about offshoring. Law firms are always concerned about supplier stability and frequently have reservations about small ones. Larger LPOs will address this general concern and, as important, have both the reputation and references to allay other fears.”
Public Acknowledgement
Given that the majority of the leading LPOs can testify in 2007 to having received projects from AM law 200 ranked law firms, where are the testimonials, quotes, and press releases from the law firms’ managing partners? I am perfectly aware from my own experiences and numerous discussions with both the press and my peers at other LPOs that although major law firms have begun to explore the benefits associated through offshore legal process outsourcing they are also clearly still operating from a standpoint of reluctance to discuss their outsourcing relationships. There is a feeling within the industry that the major firms still view their own offshore legal outsourcing arrangements as a dirty little secret. Attempts by LPOs to include provisions within their contracts that allow publicizing of the deals have generally been met with rejection to date. Over the last 12 months I and many of my peers at leading LPOs have written articles for or been interviewed by journalists for publications as varied as Time magazine, the American Bar Association, Wall Street Journal, the Los Angeles Daily Journal, and the Association of Legal Administrators, to name but a few. The vast majority of these articles are still missing out on the “major firm” perspective. There is an unwillingness to go on record and confirm that the firm is outsourcing elements of their legal functions, whether back-office support or higher value legal work, to India. This is clearly frustrating for the LPOs who want to shout from the rooftops about every major client they have on their books.
I anticipate that this will change over the next couple of years. Don’t expect a tidal wave of confessions; however in the same way that the major firms’ initial interest in exploring legal offshoring was client driven, so will their eagerness to publicize the fact of their involvement. During the last year many of the law firm partners who have contacted both LawScribe and some of the other leading LPOs have been perfectly content to acknowledge that the reason they are approaching an LPO in the very first place is because their corporate clients are starting to demand that they offer an offshore element in their responses to RFPs or they will simply lose their business altogether.
As it was with the first uptake of offshore legal outsourcing, the public acknowledgement of the actual utilization of these services will of course be client driven. In 2007 we viewed the very first signs that an inherently risk-averse legal profession was publicly embracing the harsh reality that no industry was immune to the forces of globalization. Although the majority of the world’s leading law firms are still reluctant to go “on the record” and acknowledge their interest in offshore legal outsourcing, throughout 2007 AM Law 200 firms have been consistently approaching the world’s leading legal process outsourcing companies, submitting RFPs and inquiring about the various services on offer.
The picture has started to change. On occasions representatives from leading firms have joined their LPO providers on panel discussions at a variety of legal conferences that have begun to address the subject in 2007. I believe that in 2008 we will reach the point where having the law firm’s name out in the public domain as one that embraces offshore legal process outsourcing will actually be an attractive bonus for potential corporate clients, hence helping generate new business rather than turning people off.
Ron Friedman provides his own unique insight on whether 2008 will be the year that the major law firms come clean and publicly acknowledge that offshore legal outsourcing is firmly on their agendas:
“There is a common “tipping phenomenon” among large firms where no one wants to be first. Of course, a firm does go first and eventually a couple follow. Once a half-dozen or so have moved, the market tips – then, no one wants to be left behind not doing the new thing. Looking at adoption of e-mail and creation of marketing departments as examples, it seems to take at least five years for a cycle to play out. Today, firms are reluctant to acknowledge publicly that they offshore. Once a few go public, it will likely take little time for the rest to follow. And because of perceptions, more are likely to go public soon…
Law firms have many constituencies but clients come first. Large firm clients are, by and large, cost-sensitive in-house counsel. Firms can gain both a perception and actual advantage with clients by making clear they understand and are responding to the cost pressures facing their clients. Cutting associate or partner rates (whether directly or by discounting) is not attractive. And, talk notwithstanding, fixed and alternative fees have yet to gain significant share. So the number of ways to reduce costs is limited. As firms gain comfort with offshoring quality, they will understand that it is a good way to offer savings without affecting the firm’s core business. It therefore seems likely that market pressures will cause the early law firm adopters of outsourcing to also be the early “announcers.”Neeraja Kandala, of ValueNotes agrees that public acknowledgement is just around the corner:
“Early adopters among US and UK law firms are gaining comfort with the idea of offshoring. There are several law firms that are inhibited by various concerns. Those who have held back are now seeing the success stories of some of their competitors. I’m quite optimistic that once the law firms and corporates get more comfortable with the idea of offshoring, they will openly acknowledge their participation.”
Regulation, Accreditation and Certification
New companies without any real U.S. or U.K. physical presence or without the requisite legal background and qualifications are springing up all the time. The original ValueNotes report in December 2005 estimated in the region of 40 LPOs. 18 months later the numbers had swelled to well over 100. Many are simply jumping on the legal outsourcing bandwagon, seeing it as the latest “get rich quick” scheme. Last October LawScribe were forced to threaten legal action against a new LPO called LexGenius whose website was a virtual word for word plagiarism of the LawScribe site. It went as far as completely to copy the LawScribe CEO President, Kunoor Chopra’s, profile but simply to substitute in the name of the LexGenius founder!
There have been numerous calls from some of the major players within the industry relating to the formation of trade associations, independent training programs, regulatory bodies and best practice procedures. To date there has been no specific general consensus in these areas. It is likely that 2008 will witness the development of at a very minimum best practice rules for the industry.
2007 saw the first moves from within the industry towards accreditation and self-regulation. Russell Smith from SDD Global Solutions led one initiative with the formation of the first LPO trade association with the inaugural meeting held in Delhi in the summer of 2007. In November, through the forum of the International Association of Outsourcing Professionals, LawScribe led the first Legal Outsourcing Topic Chapter meeting attended by senior representatives from leading LPOs, BPOs, Law firms, academics and other interested stakeholders. 2007 also witnessed LPOs Jurimatrix and QuisLex, in association with one of India’s leading training organizations, develop the Global Legal Professional Certification Test.
Throughout 2008 I anticipate that both at legal conferences and on their own initiative senior representatives from the world’s leading LPOs will continue to meet and discuss these issues. While it is clear that many within the industry are committed to achieving higher standards to inspire confidence among their clients, to date there has been no general consensus as to how best to achieve this.
Deregulation of U.K. Legal Sector and its Impact on the Legal Process Outsourcing Industry.
In the U.K. the Legal Services Bill finally received Royal Assent on October 30, 2007. The true impact of this piece of legislation will only start to be felt in 2008 and beyond. The particular section of the Bill that will have the most far reaching consequences on the legal profession and provide a colossal boost to the growth of offshore legal outsourcing, is the provision allowing the formation of Alternative Business Structures. The summary to the Bill at paragraph 15 states as follows:
“Alternative Business Structures (ABS) will enable lawyers and non-lawyers to work together on an equal footing to deliver legal and other services. External investment will be possible”.
Put simply, non-lawyers can own and invest in law firms. To all intents and purposes this opens the doors to banks, insurance companies, supermarkets and other corporate entities both owning and investing in existing law firms or alternatively setting up their own firms and marketing legal services to the general public.Tony Williams, a former Clifford Chance Managing Partner, recently penned an article for the Times Online, http://business.timesonline.co.uk/tol/business/law/article2718339.ece referencing ten trends that will shape the legal market over the coming years. At trend number 4 the author commented that:“Technology will enable projects to be ‘unbundled’. This may mean that parts of the project are outsourced to India and that they are done in a systemized manner. This could have a significant impact on the need for junior lawyers, particularly if they start to price themselves out of the market.”Trend number 6 stated:“High Street legal services will be fundamentally transformed by the Legal Services Act. A number of major brands will dominate the provision of retail legal services. Will that be law firms, or outsiders such as supermarkets or banks? It is too soon to tell whether existing law firms will be able to develop strong enough retail brands.”Finally, at trend number 7, the author went on to say:“If the Clementi reforms (the forerunner to the Legal Services Bill) are broadly successful, one can expect firms higher up the chain to take in outside capital and float on the market.”
Over the coming years there will be an influx into the legal market of major corporate entities that previously were prohibited from providing legal services. I do not anticipate that in the near future banks and supermarkets will necessarily be providing high end, premium legal advice, however I do believe that these corporations will come to dominate the provision of routine, retail legal services. None of these corporations will be bound by the traditional and antiquated existing methods of legal services delivery. They will simply look for the most cost-effective method of providing legal services to the general public. These companies either already have offshore locations or have the capability to scale up significantly quicker than even the world’s largest law firms to provide legal support from offshore destinations. This in turn will have a domino effect and will inspire the world’s leading law firms to look at new operational models for delivering routine legal support, with offshore legal outsourcing being the logical choice.
In addition, the potential floatation of some firms “higher up the chain” only reinforces my belief that this will give the offshore legal outsourcing industry a huge boost. When major firms also have responsibility to their shareholders, as well as their clients, then the salaries that they pay their junior associates to perform relatively routine, offshoreable level legal work, will raise more than a few eyebrows. When corporate clients increasingly demand that law firms provide an offshore solution in responses to Requests for Proposals, shareholders will not be happy if the firm is incapable of responding to these requests.
The face of the legal profession in the U.K. is changing dramatically. These changes will have far reaching, cross-Atlantic repercussions. The U.K. and U.S. legal markets are inextricably linked, with many of the world’s leading law firms having offices on both sides of the pond. Together the U.S. and U.K. account for over 90% of the world’s $250 billion legal services market. What happens in the U.K. does not stay in the U.K. but will soon be felt all around the Western legal world.
The Future – What can’t be done?
I firmly believe that within 5 years, in a much consolidated industry, offshoring routine level legal work will have become the norm for the world’s leading law firms and corporations. Of the current 100 plus LPO providers, many will have ceased to exist and have been swallowed up by BPOs or will simply have gone out of business. We will have witnessed the development of clear and unequivocal ethical standards of practice and procedure relating specifically to the industry. New destinations and talent pools in Africa and South America which are currently virtually untapped will be in the process of being developed as the rupee continues its rise against an ever-decreasing dollar. I believe that as advances in technology continue to grow exponentially and the quality of the offshore attorneys improves that the question will move beyond what can offshore employees do to what can’t they do?
About the Author :
Mark Ross is a professional member of the IAOP, and Chapter Chair of the IAOP Legal Outsourcing Topic Chapter. He was formerly a partner at the UK law firm Underwoods Solicitors Underwoods is referred to as “a highly influential flagship firm and model for other firms…It has pioneered offshoring of legal work.”
Mark also developed a case management system for the offshoring of personal injury cases to South Africa. He immigrated to Los Angeles and joined LawScribe in 2006. He has been a regular speaker at legal conferences on outsourcing and offshoring and have had numerous articles published in legal journals on subjects as varied as: death of the hourly rate, liberalization of the Indian legal sector and the ongoing salary hikes by the US and UK’s top law firms. Mark can be contacted at mross@law-scribe.com or (818) 442-4615.
Views expressed here belong to the author and do not represent those of the ThinkingStreet or the author’s employer.

“ The above article has been reprinted from http://thinkingstreet.com/business/2008/02/20/legal-process-outsourcing-lpo-2007-and-beyond-2/and LegalEase Solutions LLC does not hold any rights to the same”.

U.S. Legal Work Booms in India

U.S. Legal Work Booms in India
New Outsourcing Industry Is Growing 60 Percent Annually
By Rama Lakshmi

Washington Post Foreign Service Sunday, May 11, 2008; Page A20
GURGAON, India -- When Aashish Sharma graduated from law school two years ago, his father had visions of seeing him argue in an Indian court and eventually become an honorable judge.
Instead, Sharma, 25, now sits all day in front of a computer in a plush, air-conditioned suburban office doing litigation research and drafting legal contracts for U.S. companies and law firms. He is part of a booming new outsourcing industry in India that employs thousands of English-speaking lawyers such as him to do legal work at a small fraction of the cost of hiring American lawyers.
"It is much better than going to court in India and dealing with all kinds of rough people. Working in legal outsourcing is a happy career move for me, although my father does not fully understand what I am doing here after my education in Indian law," said Sharma, who began working in February for an outsourcing company called Quatrro. "I am getting valuable exposure to the American judicial system, corporate law and their way of working."
Legal process outsourcing is being called the next big thing in Indian business. It marks India's climb up the chain of outsourcing jobs -- from low-end, back-office service functions in call centers to high-value, skilled legal work.
In the past three years, the legal outsourcing industry here has grown about 60 percent annually. According to a report by research firm ValueNotes, the industry will employ about 24,000 people and earn revenue of $640 million by 2010.
Indian workers who once helped with legal transcription now offer services that include research, litigation support, document discovery and review, drafting of contracts and patent writing. The industry offers an attractive career path for many of the 300,000 Indians who enroll in law schools every year. India and the United States share a common-law legal system rooted in Britain's, and both conduct proceedings in English.
The explosion of opportunity here was triggered by what are known as "e-discovery laws," a set of U.S. regulations established in 2006 to govern the storage and management of electronic data for federal court actions. Overnight, the volume of information to be stored, archived, filtered and reviewed for litigation swelled. But there were not enough affordable lawyers or paralegals to do the work in the United States.
"The new e-discovery rules sent American companies scurrying all over the place. Neither the corporates nor the law firms in America are geared to do this kind of work at short notice. And that is where the Indian players come in. We can bring together a large number of skilled lawyers in no time at all and at one-fifth the cost," said Srinivas Pingali, executive vice president at Quatrro, which also offers technical support, credit card fraud management, consumer research and architectural services for American clients, among other work.
Pingali said that the economic slowdown in the United States has not hurt his company's business. In fact, legal work related to bankruptcies has increased.
Because of the sensitive nature of legal work, Indian outsourcing companies have tried to allay the concerns about confidentiality. They have installed closed-circuit televisions, network safeguards and hack-proof servers.
Many outsourcing companies in India already have those security measures in place because they have been handling the credit card and banking operations of global companies for more than a decade. Industry members say that outsourcing of legal work to India is a natural next step.
"Ninety percent of a lawyer's work is legal research and drafting, and all this can now be offshored to India," said Russell Smith, who worked in a Manhattan law firm called SmithDehn before moving to India to set up an outsourcing company in 2006. "A large portion of our fees in the U.S. is because of office rent. It is often a big decision to hire one attorney in the U.S. In India, we can hire 10 at a time and train them all at once."
Smith's Indian company, SDD Global Solutions, handled much of the legal work for the film "Borat." Other clients include the Washington-based firm Appleton & Associates and U.S. movie studios and television networks.
"My people in India can do everything from here, except sign the opinion letter and appear in an American court," he said.
Smith's Indian office recently researched and drafted the motion papers for the dismissal of a libel case against the producers of HBO's "Da Ali G Show." Smith said that if it had not been for the cheaper option of outsourcing, the producers would have settled.
For many law graduates, the contrast between the Indian and American judicial systems comes as a surprise. India's overburdened courts, with 13 judges for every 1 million people, are characterized by backlogs and delays.
Sharma, the Quatrro employee, said he was fascinated by the speed of proceedings and judgments in the American system.
Indian employees have to undergo rigorous training in U.S. legal and judicial practices before they can take on projects. But lawyers with experience in the United States say there are challenges in training Indians.
"They write in flowery, British-style English," said Kunoor Chopra, who came to India to set up the offshore legal support firm LawScribe in 2004 after working for Fulbright & Jaworski in Los Angeles. "It is almost like an unlearning process. They have to be retrained to write in crisp, short sentences. A licensed attorney from California comes to train all my new employees in contract writing, review and research."
Meanwhile, Sharma said he learns something new every day doing legal work for Americans.
"I have learned so many new words," he said. "I keep Dictionary.com on standby. Recently, I had to look up the word 'esquire.' I always thought it meant a respectable gentleman. But in America, it means an attorney."

The significance of court rules

While exploring the sources of law in American legal system it is interesting to find that the court rules, one of the elements in enacted law, function as the backbone of the judicial system. The court rules which prescribe the procedures to be adopted by the courts give extensive and clear cut directions. On a comparative note with the Indian context, the federal system and the states have their own court rules enacted by their respective appropriate bodies. In the states, the court rules are placed in a higher status above the statute passed by the legislature and the court rules always prevail over the statutes. Unlike the state court rules, the federal court rules have the same force as federal statutes. The Advisory committee appointed by the Judicial Conference of the United States drafts the federal court rules. The procedural rules have always been the curator of the common man against the callousness of the judiciary and the executive.

Author:Chandini Nair
Junior Associate
LegalEase Solutions Pvt Ltd
Kochi.

America too respects!

Shockingly even in the largest democracy of the world *“ the judge has contempt power to punish summarily any disruption in the court room or other display of disrespect to the court.” In India ,the topic, ‘Contempt of Court ’ has always been one which is discussed and debated over.
Though both the nations have derived its set of laws from the English common law system, the revolutionary evolution which shaped the American legal system is much appreciable. The liberal view of the country is enviable. Whereas, in India , the legal system has not freed itself from the hangover of the colonial days.
The theory of Contempt of Court can be related to that of ‘Divine Rule Theory’, which was dethroned a couple of centuries back by the civilized world. The fact that even the liberal Americans who uphold the individual freedom than any other country in the world does not condemn the ‘contempt of court’ is something worth probing into.


(‘Introduction to the Law and Legal System of the United States ’-William Burnham
Ch.V,The Judicial System,pg.168)

Author:AnnieJeen
Junior Associate
LegalEase Solutions Pvt Ltd
Kochi