More Commoditization -- Putting A Price On Experience

Still ruminating on our recent post regarding the commoditization of some legal services.

The commoditization is coming hand in hand with the unbundling of legal services. Some legal tasks, which historically have been conducted en masse in one office, are being fragmented and driven down the workflow pyramid to their most cost efficient layer -- even if that layer is in another zip code.

This natural process (aligning the work with the most cost-efficient execution of the work), which has always occurred within the confines of a single firm, is slowly taking place across the country and the planet. Essentially, the walls of the single firm are coming down. And, with the removal of some office walls, the consumer, end-user, and attorneys themselves have increased access to legal process efficiencies.

To put it another way, the unbundling of legal work is a natural byproduct of increased access.

As for the increased access, well, there's that darned internet again. Okay, it is both obvious and a monumental understatement to say that the internet has and is changing the landscape of many professions (ask any travel agent if his/her job evovled in the mid 1990's). But there is no denying that, in terms of evolution, we are knee deep in primordial soup watching a surge of business models bubble to the top, each with the goal of leveraging the end-user's increased access to legal efficiencies.

One of these new strands of business models that is especially noteworthy is unbundling and commoditizing not just legal tasks, but another entity entirely -- legal experience.

Tologix offers software to attorney's who conduct research in specialty areas of law. A firm's (or even a single attorney's) years of work can be collected, captured, and organized so that the aggregate can be searched and monetized on a subscription basis to end-users.

Websites like justanswer.com allow consumers to name their price and receive one-off legal information directly from a network of experienced attorneys online.

Both are prime examples of the wave of creative business models surging right now to leverage the unbundling of legal offerings resulting from increased accessibility via the internet.

Again, it's way too early to say which models will thrive and which will flame out in short order. But it sure is fascinating to watch.

The Face of LPO: Sacha Baren Cohen?

And then there are developments that no one saw coming.

A few years worth of both professional and academic studies, articles, and books weighing in on the efficiencies and cost-effectiveness of Legal Process Outsourcing, and the LPO sector received its most high-profile, mainstream splash of exposure this week thanks to...?

Sacha Baron Cohen. That's right. Borat. Ali G. Bruno.

This past week, Los Angeles Superior Court threw out a defamation suit against actor/comedian Sascha Baron Cohen. What is noteworthy about the coverage of the suit's dismissal is the very public recognition and credit being given to the Indian attorneys who contributed to the victory via Legal Process Outsourcing.

One of the most widely read websites covering Hollywood and the entertainment industry, the L.A. Weekly's Deadline Hollywood Daily, quoted one of the defense attorneys saying, "...combining the skills and expertise of U.S. attorneys with U.S. law-trained Indian attorneys has proved to be an innovative and cost-effective way to fight and win the suit.”

To have both the quality of the work and the contribution to success praised so publicly is impressive.

The Wallstreet Journal's website references the case, "Sacha Baron Cohen Uses Outsourcing for the Win," and provide links to other articles discussing the story.

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.