Archive for March, 2008
Legal Process Outsourcing: Addressing Security Concerns
Filed under: India, Legal Process Outsourcing, Security | Tags: India, Legal Process Outsourcing, offshoring concerns, security concerns, service provider relationship
Comments(2) By Stefan Belinfanti
A major concern for law firms that are considering whether or not to take the legal process outsourcing (LPO) plunge is that of data protection. Client confidentiality is so rooted in the legal culture, and is such a fundamental aspect of professional legal ethics, that the mere notion of a pair of eyes glimpsing data from across the Atlantic and Pacific oceans sends shivers up the spines of many lawyers. Yet the ironic part is that there is a group of entities whose obsession with security issues may make that of attorneys seem a trivial thing – the outsourcing companies themselves. The building and maintaining of relationships with current and future clients is the lifeblood for service providers.
As outsourcing becomes more widespread and competition in the marketplace grows, the ability to illustrate the existence (and continued use) of powerful safeguards will increasingly become one of the significant factors for companies that are deciding which provider to link up with. Consequently, the leading outsourcing companies take security concerns extremely seriously, which may explain why many domestic studies have shown that the outsourcing process is no less secure, and may in fact be even more secure, than having the same services performed in-house.
Process fidelity is definitely necessary in the legal arena, but this needs to be placed in perspective. While legal documentation does sometimes consist of sensitive information, the sensitivity often stems from the defining characteristics of litigation and practice procedures. Law firms are no different from other companies in that they do not like to have their business practices broadcasted to the general public. However, concerning the type of damage that can be caused by leaking of information, legal data is in general substantially less sensitive than other types of data that have been outsourced for years on a massive scale. When the fact that large banks, financial institutions, and even the IRS are outsourcing on an extended basis, the entire issue of data protection insofar as LPO is concerned is put into clearer perspective. Suddenly, summons and complaints and discovery materials take on a whole new light when attorneys digest the fact that extensive credit histories, records of financial transactions and tax forms are being processed by the millions overseas.
Copal Partners to buy LPO firms
Filed under: Legal Process Outsourcing, PR | Tags: acquisitions, copal partners, Legal Process Outsourcing, lpo firms, PR
Comments(0) Knowledge Outsourcing firm Copal Partners is planning to enter the legal process outsourcing space through acquisition of existing LPOs in India. Joel Perlman, Copal Partners president said,
“We are in discussions with 10 LPO firms in India whose revenues are in the range $5-75 million. We hope to close one or two acquisitions this year.”
The Knowledge Process Outsourcing firm currently employs 500 people in Gurgaon, North India. It plans to nearly double its strength to 900-1000 people by the end of this year. The firm posted revenue of $ 33 million last year and aims to close the current financial year with revenue of about $ 50 million. Deutsche Bank, Merill Lynch and Citigroup together hold 25% stake in the KPO firm.
The LPO circuit saw the entry of Infosys, India’s second largest IT-firm, a few months ago. However, most of the players in the market remain small and mid-size players catering to a limited number of clients in North America and Europe.
Recalibrating service provider relationships
Filed under: Legal Process Outsourcing | Tags: Legal Process Outsourcing, relationships, service providers
Comments(0) Calibration is the act of checking or adjusting (by comparison with a standard) the accuracy of a measuring instrument; “the thermometer needed calibration”. In other words, it simply means understanding your own needs.
Richard A. Hall, founder and President/CEO of Lex Tech, Inc., a legal information consultancy company, writes
“We calibrate or check to ensure that the instrument has retained absolute accuracy of performance. However, we also see an extension of this word as “recalibration” and its association with the business world, specifically with service provider relationships. Typically, recalibration involves starting with a failure of a particular model or relationship, identifying the problem, and fixing or strengthening it. Just as with calibration, recalibration in business can make or break a company.”
There is an increasing trend among the producers in the Western economies to outsource bulk and labor intensive work to countries where they enjoy substantial labor arbitrage. For small and start-up companies it means replacing the one-man office with a team of professionals working at a fraction of cost. For large companies, it is a way of increasing profits and fulfilling their moral obligation of keeping their shareholders happy. Additionally, business relationship with the service providers can be taken to the next level to tap and penetrate the local markets.
“In choosing to outsource, companies must fully evaluate their business needs, how outsourcing will contribute to the organization and the value of the service being outsourced. Many organizations outsource activities and functions which are not their core competencies.”
Contrary to popular understanding, outsourcing of legal activities has been commonplace in evolved economies like the United States. External counseling and opinion drafting are some of the frequent forms of services traded. In any area of business, the goal of outsourcing is to create greater operating efficiencies and ensure that internal teams are free to work on critical value tasks.
With the transition of businesses from “personnel management” philosophy to “human resources management”, outsourcing service providers are now being viewed as indispensable business partners.
“Outsourced law firms should be integrated into business activities and no longer viewed as a function that happens in a silo. In-house counsel gains specialized knowledge and a broader knowledge base from outsourcing. These relationships need to be effectively managed to ensure the continuing value and successful outcomes. The business aspect of outsourced relationships needs to be managed as well as the communication aspect.”
Your relationship with your business partners need to be constantly reviewed. Are the processes and methodologies being improved? Are you achieving the desired business results from the relationship? Are you achieving greater efficiencies by outsourcing? Work cannot simply be outsourced without a process of evaluation and measurement.
As for the service providers, they are no longer satiated with supplying services on a one-time basis. The outsourcing business has evolved and vendors have become highly-focused and sensitive to the needs of their clients. It is critical to build long-term relationships to sustain business.
Why outsource to India?
Filed under: India, Legal Process Outsourcing | Tags: Asia, India, Legal Process Outsourcing, lpo
Comments(0) Fresh American graduates are being paid increasingly high remuneration in the past four years. The costs of consulting senior legal professionals have spiral-headed and touched $ 1500 an hour. Clients are constantly pushing law firms in the United States to send basic legal tasks to India where they enjoy a conspicuous labor arbitrage benefit. English-speaking and skilled lawyers, comfortable with the common-law doctrines, are working round the clock in Legal Process Outsourcing Centers across the country at $ 20 an hour.
The firms are reacting to a phenomenon which will move about 50000 legal jobs overseas by 2015, according to Boston based Forrester Research Inc.
Says Robert Profusek, co-head of the mergers and acquisitions practice at Jones Day in New York:
“The objective is to have only the most valuable people in London or New York, and the others in India, China or Columbus, Ohio,”
Companies with in-house legal departments in India include Wilmington, Delaware-based DuPont Co., San Jose, California-based Cisco Systems Inc., and New York-based Morgan Stanley, according to ValueNotes Database Pvt. The Indian legal services industry will more than quadruple to $640 million by 2010 from $146 million in 2006, Maharashtra, India-based ValueNotes said.
“General Electric sends about $ 3 million a year in routine legal work to its Indian affiliate”
“India has very talented lawyers, but it’s a misconception that you can just send work there and it gets done. You need proper supervision and security.”
Says Janine Dascenzo, the Fairfield, Connecticut-based company’s managing counsel for legal operations.
It is often that clients are pushing firms like Kirkland and Ellis, the seventh-largest law firm in the United States to offshore labor-intensive tasks.
“I’m not an advocate of offshoring legal services, but having worked in this area for so long, I understand the value of the model”
“Typically, clients hire a provider and Chicago-based Kirkland helps manage the attorneys”
Says Gregg Kirchhoefer, a senior partner in the firm’s outsourcing and technology transaction practice.
Source: bloomberg.com
HSBC offshores legal bulkwork to Asia
Filed under: Banking, Legal Process Outsourcing | Tags: Legal Process Outsourcing, lpo, banking sector, HSBC, Malaysia, Asia, offshoring
Comments(0) The Hong Kong and Shanghai Banking Corporation is preparing an offshore legal function to relocate the voluminous and labor intensive legal tasks to Asia. A team of four lawyers has been set up in its global service center in Kuala Lumpur, Malaysia. There are indications that such back-offices might be opened in other Asian jurisdictions as well. It is understood to be the first UK financial institution to make the move.
Keith Ford, the corporate banking head of HSBC, revealed that a team of lawyers was being trained in UK law under the tutelage of a senior in house counsel.
“We send out the most straightforward and practical work; the queries are of a routine nature rather than any complex issues. The project has freed up other onshore lawyers to do more challenging legal work.”
“We have been encouraged by the results and are currently training the lawyers in Kuala Lumpur and looking to make some further local hires shortly. Overall, however, we are undertaking the project at a considered pace, wanting to ensure that we succeed in managing one type of work offshore before migrating others.”
This appears to be a largely unprecedented move and reflects upon the changing trends of business in the UK industry.
Source: Legalweek.com
India enabled
Filed under: ITeS, Legal Process Outsourcing | Tags: internet services, ITeS, Legal Process Outsourcing, lpo, under sea cable disruption
Comments(0) The barefaced truth is out there to see. India has become the largest business process outsourcing service provider and the trend continues. Free market dynamics have driven enterprise to look for avenues to cut costs and constantly raise standards to keep competition at bay. When it comes to providing quality and cost-efficient solutions, India leads the way. One of the foremost reasons for this is the penetration of technology in the country and awareness of IT, especially among urban youth.
The undersea cable disruption in the first week of February 2008, in the Mediterranean sea which caused large disruption to internet connectivity in the Persian Gulf and in the Indian subcontinent, highlighting the fact that the BPO industry is capable of sustaining itself in exigencies like these. The traffic was swiftly rerouted through the Pacific and the outsourcing industry remained largely unaffected. This disruption also illustrated the need for a robust back up system in place for such blank-outs.
The legal process outsourcing industry remains largely immune from outages like these in the future, since this industry does not require voice connectivity through the internet, and a majority of the work is communicated as text. The large players in the industry, as illustrated above enjoy uninterrupted access to the internet so that work is not disturbed and commitments are met on time.
