Legal Process Outsourcing in India Continues Upward Trend

By: Andrews Mark

Global Outsourcing Association of Lawyers (GOAL)A February 2013 Daily News article reported that India is emerging as one of world's best Legal Process Outsourcing (LPO) centers. The article cites the Economic Survey 2012-13 that Finance Minister P. Chidambaram presented in parliament, which showed legal services has grown at 8.2 percent annually from 2005-06 to 2011-12.The report went on to say that legal services in India have steadily grown in the last five years and the country has become one of the best LPO destinations in the world....

In the early days of LPO, less than a decade ago, reports showed that offshoring legal work to India had relatively low acceptance among US law firms. Fast forward to 2009 - 2012, and the LPO sector has grown exponentially, in part due to an overhaul of the legal service delivery model and industry globalization. US and UK firms have begun to appreciate the unique benefits of the Indian LPO model. First off, India offers lower-cost legal professionals, advanced technologies, an advantageous time differential for western clients, and English-language proficiency. Today, the US alone sends more than 65% of its outsourced legal work to India.

In 2011, an Altman Weil Law Firms in Transition Survey found that 8% of large US firms used LPO in 2010 and 11% expected to do so in 2011. Similarly, that same year, UK-based Legal Week published a survey on the UK LPO market, which found that LPO penetration in law firms was on the rise, with 15% of UK firms using LPO, many of them magic circle firms. Also, in that survey, over half of respondents believed that law firm use of LPO services would grow over 2012. Legal Week data also revealed surprisingly that 75% of both in-house and law firm counsel believed that LPO usage did not "diminish their brand."

Clearly, law firms are more readily embracing the LPO model, and more frequently partnering with Legal Process Outsourcing providers. Since 2009, Simmons & Simmons, Allen & Overy, Pillsbury Winthrop Shaw & Pittman, Nixon Peabody, Pinsent Masons, Linklaters, King & Wood Mallesons, Corrs Chambers and Blake Dawson have all publicly acknowledged relationships with LPO providers.

Corporate legal departments are following suit. In 2012, Deloitte's Corporate Counsel Report showed that 96% of GCssurveyed outsource some of their routine legal work and 58% outsource some of their more complex tasks, involving litigation, mergers and acquisitions, and contract management. Generally, in-house counsel seems satisfied with the results, with 63% stating they were "moderately satisfied" and 30% "highly satisfied".

The next few years should prove to be an exciting ride for Indian LPOs. The market for LPO services has taken off in a big way, led by process maturity and access to world-class legal expertise at affordable rates. The market potential in the US is expected to reach about $3 billion by 2015, and Indian LPOs are poised to capture over 60% of that market.

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The Global Outsourcing Association of Lawyers (GOAL) is the world’s first membership-based, non-political international organization for the legal outsourcing industry.

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