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Legal Services
Legal Process Outsourcing
A little-discussed segment of the business process outsourcing (BPO) market in India is legal
process outsourcing (LPO). Crisil Research and Information Services, Ltd., a business intelligence
firm, estimated this segment at $60–80 million in 2006, with the potential to grow to $4.7
billion by 2012. Most of the growth would be coming from mid-sized global law firms and from
in-house legal departments of large corporations. The Indian market is currently estimated at
about $200–250 million annually. LPO firms in India currently employ about 12,000 lawyers and
law school graduates; they are expected to employ 79,000 by 2015. A 2004 Forrester Research
study forecast that U.S. legal jobs outsourced to India would grow from 6,000 at that time to
29,000 in 2010 and 79,000 by 2015.
General Electric, Cisco, Oracle, LSI Logic, DuPont, and Citigroup are among the firms that use
Indian LPO services, which can include word processing, document management, specialized
legal research, billing, preparation of boiler plate filings and contract language, electronic discovery,
and so on. The LBO sector has actually grown during the economic downturn, due to increased
demand for due diligence and e-discovery work relating to shareholder lawsuits, and
assessment of mortgage-based and other potentially troubled assets
LPO shops, such as Pangea3, Integreon Managed Solutions, Legal Outsource, IP Pro, and
QuisLex, typically do this work at anywhere from 25% of the cost of using junior associates or
paralegals in the U.S., often paying as little as $20 an hour. Work requiring a more specialized,
experienced attorney may run in the $75–100 an hour range. Not all of the firms are India-based:
Legal Outsource is an Irvine, California firm run by a former Pillsbury business development
director who had helped advise clients on outsourcing.
Junior attorneys in India hold mixed views on LPOs, seeing the work as tedious and exploitive,
but also seeing an opportunity to broaden their exposure to global legal skills and issues. U.S. law
firms, meanwhile, are under mounting pressure to outsource their back office work—first from
Indian firms feeling the sticker shock of significantly higher legal fees in the U.S., but also from
U.S. corporate clients pushing back against traditional law firm practices of high markups on
billable back office services.
LPOs also offer small and mid-sized law firms an affordable way to free up lawyers to take on
more or larger cases. Maharashtra-based research firm ValueNotes Database estimates that law
firms represent 45% of India LPO revenues, while corporate legal departments account for 36%.
Dabhol: The Mother of All Cases
At the time of its first phase completion and startup in 1999, the
$2.9 billion Dabhol power project—built on the Maharashta coast,
about 100 miles south of Mumbai—was both the world’s largest independent
power project and the largest foreign investment in
India. By late 2001, Dabhol had transformed into India’s largest-
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