Legal Process Outsourcing: India's Low Cost Advantage

Abstract:

This case is about the legal process outsourcing (LPO) industry in India. LPO had emerged as a good solution to law firms and legal departments of multinational firms for cutting their legal costs. These companies employed qualified, skilled professionals in India to accomplish less sensitive low-end tasks that were outsourced to them. The tasks outsourced to India usually included low-end back office tasks such as drafting, reviewing and reporting documents, online research, drafting and applications of patents, litigation support, corporate due diligence support, and mortgage processing and intellectual property researching. The high-end tasks were carried out by the associates in the US and the UK.

The benefits from LPO were mutual for the foreign law firms and the LPO providers in India. While the foreign law firms could reduce their legal expenditure by 50 to 80 percent, Indian lawyers earned more than what they were offered in the Indian courts or by other law firms. In addition to saving costs, the outsourcing of legal work liberated the lawyers of the outsourcing firm from doing personnel-intensive work and they were able to indulge in more lucrative fee earning activities.

While the law firms benefited from outsourcing, they had to deal with some challenges as well - the issue of information security and confidentiality. The law firms also had to ensure that the firms to which the legal services were outsourced kept the brand name and reputation of the law firm intact. The Indian LPO industry also had to face some competition from LPO industries of Sri Lanka, the Philippines, and South Africa. Despite several challenges and increasing competition, the low-cost advantage in India, in addition to English speaking qualified law graduates resulted in LPO emerging as a successful industry, according to analysts.

Issues:

» Examine the reasons why foreign law firms outsource their legal work

» Understand the growth of the legal process outsourcing industry in India

» Analyze the potential for growth and challenges for the LPO industry

» Examine how the Indian LPO industry would combat competition from other countries carrying out legal process outsourcing.

Contents:

Keywords:

Competitive advantage, Low cost advantage, Business process outsourcing, Knowledge process outsourcing, Legal process outsourcing, Economic slowdown, Indian legal services market, e-discovery laws, Ethics, Data security and confidentiality

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