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LPOs see opportunity in US crisis
The Financial Chronicle
October 2008
As everyone looks towards the West to ascertain the impact of the Wall Street crisis, there is one sector in India that is very positive about its outcome – Legal Process Outsourcing industry.
The LPO industry in India has been offering cost advantage along with expertise to developed countries like the US and the UK and cheaper services will now be a bigger concern for banks, investors, shareholders and others involved in the turmoil.
“Developments in the US financial market have created additional legal work for firms in India,” said Bhaskar Bagchi, country head of CPA-India.
“The developments in the US will have as much legal consequences and as they continue unfolding and we anticipate more work from the country – more in terms of volume as well as value,” said Rohan Dalal, Managing Director of Mindcrest.
“We are definitely positive about the outcome,” added Bhavin Patel, vice president (Training) of Rainmaker. “For our clients in the US hit by the Wall Street crisis, cutting costs will be an imperative, especially in terms of payroll. India, being a leader in the LPO industry, naturally has a big opportunity to tap,” he said.
Alternative fee arrangements, advanced technology, off-shoring and outsourcing are all methods some companies are utilising to reduce expenses or get additional value for the same money spent, added Bagchi.
The industry has reasons to smile too. During the past six to eight months, when the sub-prime crisis has been hitting the US economy, the LPO industry in India has been witnessing a steady growth.
According to Dalal, the crisis has been helping the industry grow 40 to 50 percent, in terms of revenue, during the past few months.
Bhaskar Bagchi, country head of CPA-India, said that the $150 million India LPO industry is further poised to grow to $650 million by 2010.
The companies expect litigation support services and document management-related services to be outsourced to India as fallout of the financial turmoil. These include corporate governance, corporate complaints, contracts and legal document review, legal analytics, litigation support, due-diligence work, risk assessments and research document drafting, said Bagchi.
The companies are also waking up to meet the increased demand for professionals. According to industry statistics, in two years’ time, the companies will require 60,000 to 80,000 more lawyers and other professionals to handle the increased number of work coming to the country.
Almost all companies are increasing their headcount and ramping up operations in different geographies. Mindcrest plans to add 700 to 800 people to the existing 450 employees by the end of 2009. CPA-India which has over 400 employees, will have 2,500 professionals in 12 months. In the next five years, the total head count will be around 10,000 and CPA will have offices in cities like Chennai, Bangalore, Pune and Hyderabad.
