Trinton Corp. Limited, a Noida-based telemarketing company, is planning a venture in the KPO / LPO market because of the lucrative margins which have become a ‘distant dream‘ in the call center business. The Trinton Corp. website mentions that the business focusing on ‘BPO, KPO, Enterprise Solution and LPO.’

The company would be providing outsourcing services in the legal space, which includes legal transcription, prescription, intellectual property, and patents. The Company’s Managing Director, Mr. KC Gupta said in a public statement:

We are moving onto a higher value chain. The LPO (legal process outsourcing) business pays far more than the vanilla call centre business, as it is a highly specialised job.

Trinton would be allocating over 50 seats from its Gurgaon call-centre to the KPO. The UK-centric business is inclined to generate half of its business revenues from the KPO over due course of time. It targets to achieve 20% of revenues form the business by the next fiscal.

Gupta said that the company was in the final stages of negotiations with a few legal clients and expects a deal to be completed within the next six months. He also said that the KPO business would be “operational from March-April 2009 onwards.”

The company aims to increase its current workforce from existing 950 to 1,300 employees by April 2009. They will be hiring chartered accountants, lawyers and company secretaries to plug them into the KPO domain.

The company is expected to post revenue of Rs 160 crore for FY07-08, which will be announced in couple of weeks.

Links that make for a great reading.

• The New America: Should we outsource
• Next Generation Contract Management Systems: More than software, more than LPO
• Atlas Legal: Law on Order
• Law.com: Picking an outsourcing partner

A full-blown war has erupted in the Indian legal industry with the entry of the foreign firms seeking talent in the labor market.

Firms like Clifford Chance and Allen & Overy are aggressively recruiting talent and salaries have substantially increased across the cities of India. This has pushed large domestic law firms to increase pay-outs in form of significant salary hikes some going up to even 100%. Law firms that are not giving out ad hoc increment immediately are giving year end bonuses and promotions. Current regulations do not allow foreign firms to open offices in India, but that does not stop them from recruiting attorneys for their foreign law offices.

It also appears that this is going to be the state of affairs for the times to come. A large percentage of policy and decision-makers in India are law graduates, and the advocate lobby is very strong in India. Forbes.com published an article by Mr. Cyril Shroff, one of the partners at Amarchand Mangaldas, a strong voice against Liberalization.

The Bar Council of India recently removed the restrictions placed on lawyers against advertisements, in a recent announcement. The BCI, constituted under the Advocates Act of 1961, to regulate the nature of legal practice in India and the state bar councils have passed a resolution on January 28, 2008, agreeing to amend the Rules of Professional Conduct and Ethics to enable lawyers to disseminate information on their qualifications, areas of specialisation, standing and skills only through websites.

Geetnath Ganguly, the executive chairman of the State Legal Aids Services, West Bengal, expressed:

I think this move was much needed to keep pace with global changes, the changing nature of legal services and the legal process outsourcing business. In today’s context, global exposure is mandatory and if lawyers can advertise their legal proficiency through websites, their prospects will only be enhanced.

What does this spell for the Legal Process Outsourcing Industry? Fresh law graduates can expect salary hikes in the face of an overall increase of wages in the industry. However, the caveat is that change in the industry might end up hurting the small and medium-size segment of the industry, as they might not be able to keep up.

Says Rohan Dalal, managing director of Mindcrest:

In our industry, entry-level salaries have risen by over 50 per cent over the last two years. Though it is a challenge to maintain profitability given the steep rise in wages, we are also getting better rates from our clients.

A growing number of companies in the United States are considering alternative outsourcing centers for legal work across the globe. Israel appears to be one such destination that can provide the specialized skill repositories that the American firms and corporates are looking for. Israel is trying to fill this void by providing high-quality and specialized services to their American clients. The outsourcing market could generate hundreds of millions of dollars in annual revenue.

The first conference of this kind was organized on April 2, 2008 in Manhattan with the objective of alerting the US business community that Israel is an attractive alternative to countries that have traditionally provided outsourcing services.

In an interview, the Israeli Minister for Economic Affairs in New York, Yair Shiran said:

This is a niche that Israel can fill very well. Although Israel’s labor costs are higher than in Asia, but they are still significantly lower than in the US by 30-50%. At the same time, the quality of Israeli outsourcing services will be much higher and a customer calling from the US will be unaware that he is speaking with someone thousands of miles away.

Israel is still virgin territory for this industry. This conference, and those that will probably follow, are a reminder for US companies that Israel is the next wave of outsourcing.

One of the reasons for Israel’s edge in this business is the availability of thousands of US-trained lawyers fluent in English. They are as qualified as their American counterparts and are willing to work at 30 - 50 % of the wages. Shiran noted that Israel has not only been operating traditional call centers, but also other channels for outsourcing services, such as reviewing documents of legal nature, analysis of X-ray images, and the provision of software solutions.

However, the continuing war in Gaza and West Bank has perennially raised geopolitical security concerns and the risks from a long-term perspective are higher than those in India, which provides a politically conducive environment for Outsourcing centers to perform. There are obvious scalability concerns with the higher paid work-force conspicuously immigrating to North America and Europe.

Many of the law firms would be uncomfortable with sensitive work information demanding attention of qualified and trained American attorneys being shipped abroad increasing risk of compromise.

Related article: IDT and Others Finding Success in Israel

The International Technology Law Association (ITechLaw) has announced that it is holding its 2008 World Technology Law Conference and Annual Meeting in Las Vegas, Nevada from April 24-25, 2008. The annual conference, taking place at the Bellagio, offers technology and telecommunications lawyers information on developments in technology law, including e-commerce, intellectual property, outsourcing models, data privacy, open source, Internet gaming, and Internet and telecoms communications convergence.

Enrique Batalla, the president of ITechLaw and senior partner at Batalla Abogados, Madrid said:

Our 2008 World Technology Law Conference and Annual meeting brings together the finest minds in tech law today while it also creates opportunities for networking and knowledge exchange with experts and colleagues from around the world. Las Vegas is a dynamic city that has earned its international reputation as a top destination for conferences and conventions. The city’s proclivity for evolution coupled with its high tech accessibility makes it the perfect location for our conference.

Keynote presenter Joydeep Mukherjee, Vice President and Head, Knowledge Services, Infosys BPO, will kick off the two-day conference, which features speakers from several of the largest global law firms and associations. Infosys has operations in 23 countries and development centers in India, China, Australia, the UK, Canada and Japan. Infosys has over 88,000 employees in over 40 offices worldwide and is part of the NASDAQ-100 Index.

The 2008 World Technology Law Conference and Annual Meeting will feature technology and telecommunication lawyers from all over the globe and feature programs that will cover the most current and timely international information and legal insights. Holding conferences in a variety of locations in North America, Europe and India gives ITechLaw the flexibility to offer association members the benefit of interacting with their peers on a global scale, enabling them to better face the advances made in technology law as well as the challenges. The 2007 annual conference in Chicago, IL attracted hundreds of attendees from around the world. This year, organizers expect delegates from around the globe to again join them at the Bellagio in Las Vegas for this event.

Interested parties can learn more about the event, including how to register, by clicking on this link.

ITechLaw was founded in 1971 and now it has become the world’s premier organization representing lawyers in the technology sector. The organization’s global membership spans six continents and embodies a broad spectrum of expertise.

In addition to serving as a forum for members to discuss a wide range of legal issues, the association regularly organizes conferences that explore cutting-edge issues and trends in both information technology and intellectual property law.

For more information, visit the ITechLaw Web site.

In a press release statement, ALM events has announced plans for its second annual East Coast Legal Industry Outsourcing Forum, to take place May 14 and 15 at the Harvard Club in New York City. The two-day conference will focus on identifying the “right” markets for Outsourcing; best practices; understanding the mechanics of negotiating outsourcing deals; offshore outsourcing; and trends and Insights in this area. The conference is targeted to general and assistant general counsel; in-house counsel charged with outsourcing; and outside counsel including law firm executives overseeing outsourcing in various industries. Complete conference agenda and details are available here.

The key topics to be explored at the two-day conference will include issues raised in legal process outsourcing (LPO); establishing and utilizing proper communication channels among attorneys, executives and vendors; and new productivity and profitability strategies.

Experts and practitioners speaking at the conference will include Alexander Arato, vice president, associate general counsel for Computer Associates; Patrick Hatfield, partner and co-chair of Technology Practice for Locke Lord Bissell & Liddell LLP; Stephen Nordhal, partner from the Strategic Sourcing Technology Group for Milbank, Tweed, Hadley & McCloy LLP; James Paine, corporate counsel for Home Depot; and Carter Santos assistant vice president - outsourcing transaction counsel for Equifax.

ALM Events is part of ALM’s Conference and Trade Show Division, one of North America’s largest producers of educational and networking events for business leaders and the legal profession. The division offers more than 200 conferences and two leading industry tradeshows annually, on a broad range of topics.

For additional conference information or to register, please contact Karen Abrams at (212) 967-0095, e-mail Kabrams@alm.com or visit www.almevents.com/legaloutsource.

An Early Bird Registration Rate is available before April 16, 2008. Register today!

Investment banking sources have revealed that Integreon Managed Solutions is currently in talks with domestic Knowledge Process Outsourcing and Legal Process Outsourcing firms and at least two small acquisitions worth US $ 50 million are on the charts in 2008. The company also intends to double its workforce in the next three years. They currently employ 1,500 professionals. In a public statement, Liam Brown, the President and CEO of Integreon in the US said:

We want to grow our business in India due to the tremendous growth potential. We are actively in talks with a few firms for inorganic growth, too, and will be able to provide details once things are finalised.

Experts say that the company aims at growth sustained through acquisitions to gain access to newer and rapidly evolving markets. This is a part of Integreon’s long-term strategy to grow and expand in a country, which provides it with almost 60 percent of its sales. In December 2006, Integreon completed a management led buyout in partnership with the Ayala Corporation, an US $ 11.5 bn conglomerate based in the Philippines.In February 2007, the KPO firm acquired US-based CBF Group Inc., a business process outsourcing company, exclusively focused on enterprise services to law firm.

In June 2005, the company officials oversaw the acquisition of Brahmy Solutions, a UK based company specializing in high-end analytics. It also acquired a part of the LPO business of New York-based BPO major Bowne, which provides financial publishing. In April 2003, Integreon acquired Contentscape, a company specialising in web content design and development.

India is a preferred destination for the outsourcing business because of the huge difference in the wage rates here and those prevalent in the United States and the UK.

A conference has being organised at the Institute for Global Challenges and the Law at the University of California, Berkeley for April 25, 2008 on “The International Outsourcing of the Legal Profession.” It promises to be an exciting event for discussions and conversations on the ins and outs of legal outsourcing.

The list of speakers include the who’s who of the Legal Outsourcing Industry and others. The complete list is available here. The full-day event claims to help discern the need for outsourcing legal work, which would aid you to arrive at an informed decision. You can hear first-hand account from companies considering outsourcing and from those who have had significant interest with outsourcing, as well from Legal Process Outsourcing Consultants (LPOs), and the law and economics faculty at the UC Berkeley.

The panelists will share their experience and the participants would have the opportunity to discuss and engage them in discussion. The following issues will be addressed:

• Why isn’t everyone outsourcing legal work?
• What type of legal work is outsourced and to whom is it being outsourced?
• Who is outsourcing? And what have their experiences been both generally and with regard to outsourcing patent drafting and patent searches?
• What impact will outsourcing have on the elite guild nature of the legal profession and on U.S. employment as a whole?

The agenda of the conference is available here in PDF format. The home page of the conference is available on the School of Law - Boalt Hall’s website. Click here to follow the link.

The conference fees is US $ 150 and registration is now open.

Image credit: wallyg on flickr; CC BY-NC-ND

On his blog, Rahul Jindal posts an excerpt from an interview with the SDD Global Chairman Russel Smith.

No one likes a recession, but for quality legal outsourcing providers, it will mean more business, not less. I just got back from a two-month marketing tour of the U.S. and Europe, and one in-house corporate counsel after another told me of the increasing pressure to cut legal budgets. For many, that will mean outsourcing. Recessions and depressions generally don’t reduce the need for legal work, but they do reduce the tolerance for high legal fees. Also, not all industries suffer during downturns. Many of our clients are media and entertainment companies, and that’s a field that’s almost recession-proof. When times are tough, and people don’t have jobs, the demand for movies and television programming often goes up, not down. It’s partly escapism, but also an increase in free time.

This is an interesting observation. Allaying the fears of a global recession, Mr. Smith blithely dispels the myth of a fast-decoupling US economy.

The whole world watches as the titans clash in the primaries of the US elections. Most of us who have been following the elections know well enough that this year, the primaries would be the most significant part of the election process. The Democrats are in control of the US Congress, a Democratic victory in the presidential elections seems imminent, and the Outsourcing industry is in for a radical overhaul.

The US economy is in recession and protectionist tendencies riding high. Barack Obama and Hillary Clinton have expressed concerns over American jobs being outsourced. The issue of Jobs and job losses is highest on the priority list. At the Democratic primary presidential debate at the Howard University on June 28, 2007, Senator Clinton indicated that there was a need to end tax-breaks for outsourcing jobs. Senator Obama was critical of the effects of globalization on the worker communities that lost their jobs because of the outsourcing phenomenon.

However, the truth is that the United States government cannot shy away from Globalization after years of pushing for increasing liberalization in developing countries to build markets and investments. A reasonable expectation would be a system of incentives and disincentives to retain jobs for American workers in corporates and firms; this can include tax incentives and government investments to companies for companies to create jobs in the US.

The other, and one that could really hurt the back offices in India, could be a significant increase in import tariffs for offshore services. However, as far as the Legal Process Outsourcing is concerned the effects might not be so manifest.

The regulatory regime, reinforced by legislations would spell less decision making power for the body corporates, and an increase in preventative measures. The corporate bodies that have been profiting while decoupling from the US economy would be obliged to placate the government and “insource” jobs. The conservative stance on this issue is one that they have stressed upon a number of times: Outsourcing saves American resources and retains capital within the economy.

However, statistics speak a different story. The US labor department has revealed that US employers have shed 80,000 jobs in March 2008, and much of the blame has been placed on the free trade policies and practices of the government. This will have deep ramifications on the future of emerging economies and globalized trade of goods and services.

The LPO industry will benefit from the downturn in the US markets. Apart from looking to cut spendings and downsizing in the departments that are not the core competencies of the business, organizations are looking to cut the rocketing costs in the legal departments. The increased import tariffs on services industry are unlikely to impede the offshoring of legal services, mainly due to the substantial cost-advantage enjoyed in Asia.

David Perla, Co-CEO of Pangea3 LLC foresees that the US recession spells boom in the LPO industry sector in India.

In this recession, everyone is looking for a culprit, and the litigation bloodbath is just beginning. Witness shareholder and related litigation on just the Bear Stearns debacle alone. Litigation activity related to the recession will increase, and the resulting litigations will be, not surprisingly, discovery heavy. Combine this increase in litigation with the need to preserve cash, and litigants will look to India as a discovery solution. It’s happening already, as most of the top LPO providers have seen a marked increase in litigation business in the last six months.

Apart from the highlighted fact, markets operating in an increasingly regulated environment will naturally experience an influx in litigation. Antitrust laws would tend to rub against corporates and enterprises that were operating in the relative ease of free markets in the time of the Bush administration. Compound that with the booming awareness of the LPO industry, demand will soon outstrip the supply. This is basically one of the reasons that leads me to believe that the smaller players in the market would subsist along with the mid-size and the larger players. The smaller players would evolve and tend to provide increasingly specialized services customized to the needs of businesses in the United States. The coming years would witness a high rate of acquisitions and mergers in the industry, and sub-contracting would mean a lot of business for the smaller players.

In the next post, we will discuss how the LPO industry contributes to the US economy.

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.

However, this is not to say that legal information should not be afforded the highest degree of protection, especially regarding issues of conflict of interest. The legal community is one that is tightly bound together and thrives on the flow of information between affiliates and adversaries. On a regular basis, members of the defense bars network with members of the plaintiff bars. Moreover, many of the same lawyers frequent the same courtrooms in the same venues, and attend the same continued legal education courses and alumni events. Thus in order to be supremely effective, outsourcing models must place great emphasis on separation of competing interests.

The question therefore becomes: How can a law firm be assured that they are not outsourcing work to a company that is also working on the same matter for opposing counsel? While the chances of this happening may be somewhat slim, it is still a viable concern. The fact that most providers are obligated to keep the identity of their clients confidential makes it difficult for a firm to ascertain whether a current adversary is outsourcing work to the same provider.

• Protections for the outsourcing firms can certainly be put into place. First and foremost, the contract between provider and client should make it absolutely clear that the provider must inform the client as soon as it learns of any possible conflict issues.
• Second, the firm should make sure that the provider it chooses is able to clearly articulate – and, if possible, demonstrate – the security safeguards it has implemented to ensure the validity of the process. These safeguards should be included in the statement of work agreement, in list format, along with the additional provision that the security devices must be maintained for the breadth of the contract. Thus determination of liability of the contracting parties for any security breach that results in measurable damages will be easier to ascertain.
• Third, due to the fact that technology and business procedures must often become intertwined in order for the outsourcing process to run efficiently, the security program used by the vendor should exist on both the physical and virtual levels for it to be as comprehensive as possible. It would be somewhat contradictory for an outsourcing company to rely on the fact that the production staff for two adverse law firms exists in separate offices, on separate floors or even in different cities. The very premise behind the outsourcing process is that physical separation is not a complete bar to the sharing of information – as such, a company cannot on one hand praise the concept that geographical differences are no longer barriers to the exchange of information and data, while relying strictly on geographical barriers as the only security measures put in place by the company. There is no doubt that physical separation of the production staff for adverse businesses is a good step; however, virtual separation is needed as well in order to create a robust security model.

Important questions that law firms may need answered before an outsourcing program is initiated include: How does the provider structure their production units? Are these units separated, and if they are, along what lines does the separation occur? What is the architecture of the physical premises where the work takes place? What kind of office equipment exists in that location? What types of things are prohibited from being brought to the work site? What tracking and auditing features are used in the technology that allows the process to take place? Who is responsible for the tracking and auditing? The general rule of thumb is that if the question is important enough for the attorney to ask, then it should be included in the written contract.

Once the above questions and issues are addressed to the inquiring firm’s satisfaction, the ties can be loosened and the dress shoes put on the desk, because one major aspect of the outsourcing phenomenon has been resolved. True, other issues do abound, but this one is a biggie. If the security concerns can be alleviated, then one huge step has been taken towards reaching the ultimate goal of commencing a mutually beneficial business relationship.

About the author: Stefan Belinfanti is a licensed attorney whose professional legal background includes experience in the areas of insurance litigation, labor law and civil rights law. As a legal consultant, he has developed blueprints for implementation of legal process outsourcing models for several law firms.

Courtesy: The Law and Policy Institutions Guide