Legal Process outsourcing in India

LPO outsourcing is not a new phenomenon, LPO started back in 1995 when US based Bickel and Brewer, law firm sent its legal work to its subsidiary in Hyderabad. Earlier many Lawyers in India, USA and UK were unaware of LPO. People came to know about LPO when an LPO’s in India got success and media gave highlights and projections on that. Now many are into LPO sector with the hope of finding better prospect and creating new history in the LPO industry. It’s a common question which comes up in the mind employer, employees and investors that whether LPO has any future in India?. Can South Africa, Srilanka and Philiphines Challenge India as the LPO Destination of Choice?. Will the Obama’s tax reform affect the LPO industry in India?. Why many lpos have failed to achieve success as expected? How can we take LPO into great success?. Here I Have made small effort to find solutions to all these questions.

India has good growth in LPO sector:

Today’s outsourcing is the result of WTO, fair treatment and the non discrimination is the main principals of WTO. And everyone will look for liberalization in the legal industry. In the beginning, American legal industry had many questions as to the ethical implications of outsourcing legal work to India, whether sending legal work to India amounts to unethical practice of law and there were questions about the fee sharing as the many State bar rules does not allow the fee sharing with a non lawyer of US. Now American bar Association and many state bar associations have come out with some positive answers which can clear the doubts created in the LPO sector. ABA has issued an opinion in August 2008, stating American lawyers are free to outsource legal work, including to lawyers or non-lawyers outside the country, if they adhere to ethics rules requiring competence, supervision, protection of confidential information, reasonable fees and not assisting unauthorized practice of law. Many International law firms, US and UK medium and small law firms and the in house legal corporations have started to outsource work to India.

Even the Law society of England is into outsourcing and it had signed £9m outsourcing deal with LogicaCMG in 2005. This was got renewed in 2009 for a £12 million outsourcing deal[1].

USA has a total work force of about 138 million and in that more than 1 million are Lawyers. According to the statistics of the U.S. Bureau of Labor Lawyers held about 761,000 jobs and paralegals and Legal Assistants held about 238,000 jobs in 2006[2]. And an employment of lawyers is expected to grow 11% during the 2006-16. As the business activities are growing and legal transactions and new legislations, rules and regulations taking place lawyers and paralegals are required to assist on various fields including health care, intellectual property, venture capital, energy, elder, antitrust, and environmental law. Even though the US has world’s highest number of lawyers i.e. more than 1million[3], American legal talent is not sufficient to answer for all that needs. American legal industry will be having no choice but to look elsewhere for a talent pool like in India.

LPO and Job Loss in USA and UK:

In USA and UK job is created in the space of IT and outsourced to India. The fear of off-shoring is the belief that it could affect anybody’s job. There are about only 20% Legal and IT related Jobs in USA. Only the workers whose jobs do not require an in person interface with customers is challenged. If a person works at construction, mining, health care services, retailing, teacher, food service, retailing, field sales, law enforcement, security, maintenance, repair work, install equipments and systems, arts and crafts, their earning potential will remain strong.

As the LPO industry is growing, it may be difficult to find job for new lawyer or paralegal to find a job in the corporation or the Law firm. But the government bodies still they are in need of Lawyers and paralegals and judiciaries. Lawyers who have lost the job or finding for new job surely they can work in the LPO sector or join some government bodies.

Obama’s tax reform and LPO industry:

Under existing laws, companies with operations overseas pay U.S. taxes only if they bring the profits back to the United States. If they keep the profits offshore, they can defer paying taxes indefinitely. Obama's plan, which would take effect in 2011, would change that[4]. But it needs to be passed in the congress for approval.

If Obama’s new tax proposal goes into law then captive units of US multinationals like GE, Target, American Express, etc, that has captive units in offshore locations to provide services to their own customers and Subsidiaries of US companies like IBM, Oracle, Microsoft, Caterpillar, etc, have fully-owned subsidiaries that provide services to their own customers and to other customers may be affected[5]. And captive LPO’s in India may be affected. There will be no effect to Indian MNC’S and third party LPO’s.

Moreover, no company, law firm wants to become bankrupt or lose profits. Out sourcing is the only ways to increase the profits. America can still create a job in the manufacturing field etc. Obama’s statement seems just to make feel happy of people of USA. Many MNC’s surely would pressurize Mr. Obama and other senators not to pass such legislation in the congress.

Since US Law firms and corporations are saving up to 50% to 70% of costs, the passing of Legislation may result in saving of cost from 30% to 50%. So still they can outsource the work to India and increase their profits.

Can South Africa, Sri Lanka, and Philippines challenge the India as the legal outsourcing destinations?

There are about 22,000 Attorneys in South Africa[6], about 7,000 Lawyers in Sri Lanka[7] and about 40,000 lawyers in Philiphines[8]. Out of these numbers of lawyers only few are into the legal outsourcing sector. They are mainly offering Legal Transcription services as part of BPO services or as part of their Law Firm Services in that country. According to Forrester Research, Legal outsourcing has created as many as 12,000 legal jobs world-wide and most of the jobs have come to India. Most of the study on LPO sector predicts that LPO sector may create as many as 79,000 jobs by 2015. Since India has a large number of talented lawyers, India would capture more than 80% of the Legal outsourcing work worldwide.

LPO success in India:

Presently, there are over 200 LPO’s in India and the number is expected to rise in next few years. The Industry has grown at over 60 percent year on year. The market stood at Rs 630 crore in 2007[9].

Only few LPO’S in India have succeeded in the LPO industry. As we study on their success, their success came in the following ways

Reasons for their success:

1. Management- the management includes head or partners of many international law firms, experienced lawyers of USA, UK and India.

2. Infrastructure and security: Has secured infrastructure includes owned office place, secured FTP servers for uploading and downloading data, high speed broadband internet connectivity round the clock. Telephonic calls including conference calls, online meeting, Encrypted emails, secured VPN technology, Citrix web access, Web accessible secure online databases, Extranets, FTP sites, Access via Firms collaborative document sharing and database applications, Uninterrupted power supply and backup.

Many Lpo’s have got physical security including video surveillance, security guards at all important locations, armed guards during night shifts, adequate fire protection.

In most of the Lpo’s an employee is required to swipe his identity card issued by the company to gain entry into the office. In some Lpo’s organization, employee need to press his or her thumb impression on the small machine fixed on the wall and show an access card to gain entry into the office. Lpo’s can also be adopted to new technology like Facial recognition Access control[10] a special software which identifies the employee and allows him to gain an entry by opening the door automatically and also keeps records of arrival and departure.

3. Data security, and Confidentiality : In many LPO’S employees need to sign non disclosure agreement and the employees are provided with unique user accounts and password, and passwords are changed periodically. Every computer and folder is password protected.

Surveillance cameras or closed-circuit security cameras are fixed to track the employee’s movements.

Personal communications or data recording devices, such as mobile phones, handbags are not permitted anywhere in the working premises.
It is not possible to access the work of team by the other team. All incoming and outgoing mails are monitored on exchange server, and all attachments are filtered.

4. Certifications: To ensure data security many LPO’s in India are obtaining certifications from ISO (International Organization for Standardization). Quislex was the first LPO provider to obtain ISO/IEC 27001:2005 certification[11]. QuisLex also a ISO 9001:2008[12] Quality Management System (QMS) Certified. ISO/IEC 27001:2005 is the information security management system (ISMS) standard published by the International Organization for Standardization (ISO) and specifies the stringent requirements for establishing and monitoring security within the context of organizations overall business risk. Compliance to ISO 27001:2005 ensures business continuity and reduces business damage by preventing and minimizing the impact of security incidents. Some of the LPO’s are EU safe harbor certified[13] e.g. QuisLex and United Lex. Pangea3’s legal outsourcing services were awarded ISO 27001 certification from TÜV SÜD South Asia, one of the world’s leading testing and assessment companies[14]. Integreon has received a received the 2009 Frost & Sullivan Award for “Excellence in Knowledge Process Outsourcing (KPO)”[15].

5. Black book of outsourcing:

Brown- Wilson group is a Tampa/St. Petersburg, Florida based Globally-recognized and esteemed research organization on outsourcing, founded in 2000 by Scott Wilson and Doug Brown. The Brown-Wilson Group and Black Book of outsourcing (Wiley Publishers) annually surveys an organization’s satisfaction with their outsourcing service providers and consultants. Each service provider is evaluated on a scale of 1-10 on 20 key performance indicators (with a scoring basis of 0 to 10 (0 = deal breaking dissatisfaction and 10 = overwhelming, exceeded expectations)).
Over 400,000 individuals are invited to participate annually (including C officers of the Fortune 2000, Inc 500, institutional members and officers of various professional organizations, subscribers of our media partners and previously validated survey participants) in the Black Book Ranking Process.
Non-invited participants are included after their profile verification and valid corporate email address.

Brown Wilson Group is often quoted in the WSJ, Business Week, AP,US News, Time, Newsweek, NBC, CNN, ABC, CNBC, CBS, NPR and other major media outlets.

Black book of outsourcing yearly publishes the topmost outsourcing vendors related to Business process outsourcing (BPO), Finance & Accounting Outsourcing (FAO), Knowledge process outsourcing (Kpo), Information Technology Outsourcing (ITO), Human Resources Outsourcing (HRO), Legal process outsourcing (LPO), Document Process Outsourcing (DPO), and Educational Services Outsourcing (ESO) sector.

The 2009 black book on outsourcing has listed the Clutch Group, Integreon, RRD OfficeTiger, Aphelion Legal Solutions, InfoCache, LawDocsXpress, Lumen Legal, Intrust Global eServices, Lex Outsourcing, and Acumen Legal Services as the top ten in Overall Legal (Administrative) Support Services Outsourcing. Mindcrest, CPA Global, Integreon/Datum,Pangea3, American Discovery, QuisLex, SDD Global, Quattro BPO,Clutch Group, and Evalueserve as the top ten in Overall Core Legal Services Outsourcing.

6. Employee’s recruitment, training and salary: In many LPO’s one need to complete 3-5 rounds of interviews(written, oral and technical) to gain entry into the LPO. After the recruitment, a candidate needs to undergo project specific and other training for 3 months by LPO industry leaders, attorneys, solicitors and clients. Sometimes there will be an on job training.

Most of the successful LPO’s in India employs more than 100 employees consisting of Attorneys, solicitors and paralegals. For example Integreon has got 2000[16]employees, Clutch group 300[17] employees, and Mindcrest has about 650[18] employees.

The salaries in the most of leading LPO’s will be 20k to 25k for freshers and 25k to 35 one or 2 year experienced. Besides these, health insurance facility, free club memberships, cab facility are provided to an employee. Many LPO’s will be having its own canteen where the employees can have breakfast, lunch or dinner free of cost. Most of the employees in LPO sector work for 8 hours per day, they work in shifts as the many LPO’s in India work on 24X7 basis. Employees will be having two days weekly off and other leave benefits.

7. Marketing: Marketing is the Backbone of Every Business. An important aspect of the LPO job involves finding new clients, developing and managing relationship with the clients. LPO’s in India cannot survive without clients or without any projects. Many leading LPO’s in India has got marketing professionals by the designation of marketing executive, senior marketing executive, assistant manager, manager, project manager, assistant business development officer, and business development officer. Most of the marketing professionals are from LLB and MBA education background having experience in International marketing and have got good communication and presentation skills. Even some attorneys act as the marketing professionals and get new clients to the firm. Marketing professional in the LPO will be having a clear understanding of legal procedures and working of LPO. Their main role includes looking for foreign law firms, in-house corporations who are willing to outsource their legal process to India. A marketing professional needs to introduce the company and its capabilities, needs to understand the company he is contacting, its history, partners, and directors. Then he shall discuss LPO services to such law firm or the company and discuss their pain areas or areas where we as company/LPO could work together and suggest Legal Outsourcing as a solution. Besides these roles and responsibilities a marketing professional needs to conduct extensive market research, shall be willing to travel, make cold calls, make presentation to the clients, conduct videoconferencing, teleconferencing, handle the client visits, requires to prepare a detailed business plan to sight goals and objectives, target markets to bring account to the LPO. He shall also be ready to spearhead the business development activities for the given region, willing to work as per regional timing and always look for expansion of the LPO business and lead to earn more profits.

8. social media internet

Social Media is the Latest Networking Tool for LPO’s and Attorneys. It is the great tool for capturing new clients. Many Lpo’s in India have got their own blog page about LPO and they are in touch with many of leading news papers of the USA and UK to give an insight on LPO sector.

Attorney of a law firm, and lawyers of in-house corporations, are increasingly reading blogs and participating in social media these days. They will be interested to find latest information on the industry within less time

According to Technorati's State of the Blogosphere 2008 report, the number of American blog readers grew to 60.3 million in 2008[19].

Many leading LPO’s in India have got their company profile in Linkedin.. Many companies and attorneys use LInkedin, twitter and facebook. Social media can help LPO’s to understand individual client personalities. LinkedIn is a powerful professional network, with members from each of the fortune 500 companies. LPO’s in India can effectively use social media for its growth.

9. Back office operations: many of the LPO’s In India acts as back office for many departments of corporations and Law Firms abroad.

10. LPO website: Having well balanced web presence is the best tool for developing the online marketing which attracts the clients. The website shall have proper design to attract clients; it shall capture the attention of clients in seconds. Website content can increase LPO’s search engine ranking, educate and qualify prospects, and enhance LPO’s credibility. Once potential client arrive at LPO’s Web site, the content must win him over and move him to make a call to an LPO. Most of the successful LPO has the features like search within the website, news on LPO, sitemap, work samples, management and LPO team member’s profile. A well crafted online video made available on LPO website or you tube also can help LPO’s to connect with more clients and promote an LPO.