While the global financial crisis is hitting several economies hard, one sector in the Asian legal market is reaping the benefits.
Legal process outsourcing (LPO) is shining amid the market turmoil, as law firms seek to cut down on costs by outsourcing work to offices in China and India.
Sanjay Kamlani, Co-CEO of Pangea3, a provider of LPO services, says that the company is bracing itself for a flood of work due to the crisis. “We have seen a significant increase in inquiries in the last several months precipitated by the US recession, both from the standpoint of the cost pressures and related head count reductions associated with the recession as well as from the standpoint of increased legal work directly related to the sub-prime debacle that triggered the recession,” he said in an interview with industry blog legallyyours <http://legallyours.blogspot.com/>.
Over the last decade, the LPO market has surged exponentially with research firm ValueNotes estimating the growth at almost 70% pa – going from a US$200m industry in 2001 to US$3bn last year. The rise has also been driven by the quality of work. Most outsourced work is given to law students and the higher numbers of law graduates in China and India as against their European and American counterparts means that the quality of legal work is generally well received. It is also predicted that as the industry gains a higher reputation, more and more top quality graduates will move into the industry.
Kamlani says that rising costs will increasingly drive firms towards LPO services. “Over the next two to three years, we would expect every large in-house counsel department and a much larger number of law firms to view offshore outsourcing strategies as essential to their legal practice. In many respects, outsourced legal services from India’s LPO industry represent the best legal work for the best price, the best value for money.”