Copal Partners to buy LPO firms

Posted March 20, 2008
Filed under: Legal Process Outsourcing, PR | Tags: , , , ,
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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

Posted March 12, 2008
Filed under: Legal Process Outsourcing | Tags: , ,
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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?

Posted March 4, 2008
Filed under: India, Legal Process Outsourcing | Tags: , , ,
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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

Posted March 2, 2008
Filed under: Banking, Legal Process Outsourcing | Tags: , , , , , ,
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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

Posted March 1, 2008
Filed under: ITeS, Legal Process Outsourcing | Tags: , , , ,
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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.

News sources: [1], [2], [3], [4]

Welcome to LPO News!

Posted February 24, 2008
Filed under: Legal Process Outsourcing | Tags: , , ,
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Welcome to LPO News. The aim of this website is to provide information, news and overview of the Legal Process Outsourcing industry.Why outsource?Enabled by technology, globalization has brought us closer. Free markets dictate the will of the society and efficiency is the new corporate shibboleth. Free competition drives businesses to look for avenues to increase productivity and reduce costs substantially to boost profits. Outsourcing refers to a specific segment of growing international trade in services.In particular, imagine a country like the United States, abundant in skilled labour has an economic incentive to outsource low-skill intensive work to countries abundant in unskilled labor like India. This translates into enormous cost savings for businesses in the United States, while trained professionals in outsourcing hubs earn relatively higher than conventional lawyers.

Outsourcing law

Lawyers and firms in the West have questioned the “quality” quotient of legal jobs outsourced to India. The skepticism is not ill-founded. The legal offshoring industry is still in a nascent stage and there is a dearth of professionals and paralegals specially trained to cater the needs of the American law firms. However, the highly-profitable nature of the business and demand for jobs with higher disposable incomes among the youth of India has spurred the industry to churn out institutes providing specialized training for work in the LPO industry. Every year, Indian law school produce 80, 000 English-speaking lawyers. The potential is immense.

One of the allurements for the law firms in the West is the “timezone factor”. LPOs in India have the benefit of turnaround time while serving their clients in the US / Europe, as the clients can review the work in the morning while the Indian professionals work through the night time in the West.

The New York Law Journal, a widely subscribed journal among American lawyers, said in an article released in one of its recent issues: “outsourcing legal work to India is no longer a novelty. It’s a reality.” The positive feedback given by the companies having outsourced work to India has made many other firms receptive to the idea, and that includes companies in the Fortune 500 list.

This is a win-win situation for everyone.

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