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Legal outsourcing firms say business as usual
Financial Express
November 2008
The global economic downturn could give way to increased opportunities and push up volumes for the legal process outsourcing (LPO) industry, rather than affecting it negatively, according to some experts.
If these experts are to be believed, the breakdown of financial institutions in the US could open up a host of new opportunities for the industry. This, since the downturn will lead to a hike in cases related to bankruptcy, individual and corporate losses, and M&As, which will mean fresh litigations and legal compliance work. And corporates, in a bid to keep costs low, could outsource a lot of this work to India.
For now though, as Ganesh Natarajan, president and CEO of LPO firm Mindcrest puts it, “It’s business as usual”.
“There is some slowdown in transaction and security related jobs, but at the same time, there are a large number of litigation and legal compliance projects,” he said. Mindcrest currently has 500 lawyers and expects to add another 500 by next year.
Currently, the LPO industry in India is worth about $225 million. It is expected to cross the $640 million mark by 2010, employing 32,000 people, according to research form ValueNotes. Also, the firm notes that the India LPO industry could see several high-end jobs like patent and contract drafting coming to it in considerable volumes.
Neeraja Kandala, Outsourcing Practice, principal analyst-legal services, said, “Of the current market, patent services form about 20%; documentation and litigation another 35%. These figures indicate that more complex jobs are expected to be done in India.”
Despite LPOs expecting volume growth in the near future, pricing pressures need to be tackled.
“Service providers and third party vendors in this space are increasing, leading to pricing pressures in certain jobs. While pricing for the high-end complex jobs remain unaffected, pricing for basic low-end jobs have decreased,” said Vishal Aggarwal, senior manager – LPO.
On an average, LPOs charge $40 per hour for complex jobs, while pricing for low-end jobs have gone down to $1 per document from $3 per document in the last one year.
