CHICAGO | SAN FRANCISCO | WASHINGTON DC | NEW YORK | MUMBAI | PUNE
Sailing through the tide
Times Ascent
November 2008
As the saying goes – ‘You need lawyers in good times and bad’. India Inc is witnessing a high growth of the LPO sector even in the current slowdown. Already estimated to be worth US$ 146 million annually, the Indian LPO sector is expected to grow to over US$ 640 million by 2010, according to industry estimates. You might wonder how this is possible in the recessionary scenario! “A financial crisis such as this will no doubt mean an increase in legal services in the areas of litigation, M&A activity, bankruptcy proceedings,” answers Rohan Dalal, MD, Mindcrest, a Pune-based LPO.
Moreover, from an organisation’s stand-point, legal work is non-discretionary. “A firm has to comply with the standard legal processes,” says Sanjay Kamlani, co-founder and co-CEO, Pangea3.
Indian LPOs – Yahi hai right choice!
The recession in all major industries, especially the financial sector has led to an increased demand of efficient legal services like document review, due diligence, regulatory compliance and litigation support. “Indian LPOs are the best choice to have on cost, quality, competency and capacity front,” says Soumitro Chatterjee, CEO, FM Legal Circle Services, a Delhi-based LPO. This combination is in fact fuelling the sustainability and growth of Indian LPOs.
Over the next six to twelve months, the impact of the global crisis is expected to spread across businesses and corporations of all sizes and industries. This would further constrain the already tight resources and stretched legal budgets. “The Indian LPO industry is a natural choice to alleviate the pressures and maximise the value realised per dollar spent,” says Dalal.
For many Indian LPOs, this period has been that of high growth and increased revenues. “Our revenues for the last six months ending November 30 are 100 per cent higher than what it was six months ending prior to this,” Kamlani points out.
This is perhaps also because the best Indian LPOs are able to provide a variety of solutions, be it short term labour intensive assistance to address a critical time-sensitive need or a long term strategic partnership. “India-based outsourcing firms are also now emerging as ‘strategic consultants to US and UK-based companies that are going bankrupt,” informs Bhaskar Bagchi, country head, India, CPA Global.
Witnessing growth
Speaking of the areas where the Indian LPOs are likely to witness growth, Dalal says, “We expect to see a rise in the area of litigation support.” Reasoning this, he adds, “This will be a natural result of the shareholder lawsuits stemming from the activities affecting the markets.” Citing his firm’s example, Kamlani notes, “Litigation business volume for us has increased by 300 per cent from the last year.”
Other areas of work likely to witness growth are bankruptcy filings, and eventually, mergers and acquisitions. Moreover, there’s new legal work being created like litigation with respect to the sub-prime debts etc. “Lawyers are needed to review securities, assess risk associated to those securities,” Kamlani points out.
Surely, those in this sector have no reason to lose their sleep. Apart from the continual demand and the wide array of opportunities in the sector, the moolah is yet another positive. A fresh law graduate from a good law institute can earn up to Rs. five lakh per annum in an established LPO as a starting salary, excluding bonuses which come for review in six months time. Talking of the salary trend, Dalal says, “There has been an average of 12 per cent increase per year.”
What’s made LPOs an even more attractive option for many lawyers is the decrease in business that most law firms are facing currently. “Many law firms are letting go of their lawyers as there’s less M&A work, no new IPOs etc,” Kamlani informs.
Manpower supply is definitely not one of the woes for this industry which employed around 7,500 people as of end 2006. The manpower demand of this sector is expected to reach 32,000 by end of 2010.
Hiring for most of the strong players in the Indian LPO space has been aggressive. “We have doubled our strength in the past year and the projection for the next year is on similar lines,” informs Chatterjee.
Hiring in full swing
Firms like Mindcrest and CPA Global are going ahead in full swing with their hiring plans. While Mindcrest is planning to grow from 500 to 800 lawyers during the year 2009, CPA Global too is set to increase its employee strength from 450 to 2500 by 2010.
Even as the rest of India Inc is bracing itself for pink slips, lawyers are popping champagne bottles. And why not? They have a reason to celebrate!
