Shelley Singh, New Delhi

Indian Legal Firms Shy Away from LPO Biz

LAW firms across India Inc aren't excited about running the legal process offshoring (LPO) business.  While the opportunity is huge, lawyers who have tried their hand at it say “law firms will not be able to create a great LPO.” This is despite the fact that back office legal services is a $250-billion global business annually.

The reasons are not far to seek: law firms were contracting work for global clients at billing rates between $20-100 per hour. But for similar work that the client wanted to be done in India-- say, litigation support, legal research, patent filing or drafting documents for incorporating a company in India – the firms were charging $200-$300 per hour. Lest they impact their own business, they have decided against pursuing LPO work. Besides, lawyers see themselves as consultants and not running a back office desk for overseas clients.

Says Mumbai-based LPO, Pangea3's co-founder & CEO, Sanjay Kamlani: “Third-party niche players are better suited to offer LPO services. Given the billing rate differential for legal work within India and outside, law firms may risk cannibalising their own business. Hence they may not be keen to pursue it.”

The third party KPO and BPO service providers like WNS, Evalueserve, OfficeTiger, Pangea3 and SDD Global could be the gainers of the LPO business. They have already proven to be deft at handling such legal tasks as patent filing, drafting, legal reports, litigation support, patent proof reading and so on. And they are fine with executing the work at $20-$100 per hour, which gives net margins higher than what some routine BPO work offers.

For instance, ALMT, a Mumbai-based law firm started the LPO business called ALMT Synergies and ran it for almost three years before discontinuing it. Matthew Banks, who ran ALMT's LPO business is now with a BPO service provider, running its legal services back office work. Says Sameer Tapia, partner, ALMT, “We started the LPO but we are primarily a law firm. The outsourcing model does not excite us. I don't think that you need a law firm to run an LPO business.”

Adds Delhi-based LPO, Verist's founder & CEO Arjun Anand, “for law firms there could be cultural issues as LPO is not a consultancy sort of business. It's a desk job. “ Anand, who is part of the family which runs the law firm Anand & Anand, started Verist about two year back, and today has 15 people doing work like legal research, patent drafting, litigation support, analytics and so on. Another law firm, Mumbai-based DSK Legal promoted and later spun off its LPO business. This is now being done by Legasis Partners, a Pune-based LPO with 20 people.