Outsourcing

While Wall Street Collapses, Mumbai Picks Up The Scraps

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We reported last month that the ABA made it easier for law firms to outsource legal work. But as many commenters pointed out, there would need to be a reason for firms to do that and risk a reputation hit.

Perhaps the market crisis has given firms the perfect opening to begin using low cost legal workers outside the United States.

The Hindu Business Line reports that India is “lawyering-up”:

At a time when the off-shoring industry is plagued with instances of employee lay-offs, companies providing legal process outsourcing (LPO) services are on a hiring spree as demand for litigation services from the US rises.

In the next six months to a year, several LPOs have plans to at least double headcount in order to cater to the increased work flow resulting from the recent turmoil in the US that has seen several financial institutions collapse.

The Wall Street crisis has resulted in increased litigation related to bankruptcy, mergers & acquisitions and other related aspects.

We’ve said before that the first front of this outsourcing battle would be fought over document intensive litigation, when clients demanded the lowest possible costs. Does that sound like a bankruptcy proceeding to anybody?

Indian businesspeople watch CNBC too:

For US companies and law firms, the pressure to put a throttle on costs is immense. By outsourcing to Indian vendors, companies can save about 70 per cent in costs vis-À-vis law firms in America.

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After the jump, how Indian firms save 70 cents on the dollar.


The ability of Indian firms to pour an intense amount of low cost labor into the effort is the 800lbs gorilla (or elephant, if you prefer) in the room:

Another legal outsourcing firm, UnitedLex Corporation, has plans to more than treble its headcount to 1000 by the end of the current fiscal, according to the company’s Chief Solutions Officer, Mr Ajay Agrawal.

“These additions are essential owing to the quantum of work that we have just been awarded. About 75 per cent of our overall employee base will consist of legal and para-legal professionals,” said Mr Agrawal

Demand side constraints are few as India produces around 80,000 law graduates every year. The Chicago headquartered Mindrest plans to have about 700 lawyers on board by this year-end from 450 currently, according to Mr Rohan Dalal, Managing Director. “You may have demand for your services but if you do not have enough people on board, it does not really translate into anything. We are convinced of the long-term sustainability of our business model and hence are bullish on hiring,” Mr Dalal added.

Holy Shiva.

For those playing along at home: the financial services market has collapsed, law firms are folding, and there is seemingly an entire country coming to take your job.

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On the bright side … “He had reached an age where death no longer has the quality of ghastly surprise, and when he looked around him now for the first time and saw the height and splendor of the hall and the great rooms opening out from it into other rooms, his grief began to be mixed with an awed pride.”

US meltdown prompts LPOs to step up hiring [The Hindu Business Line]

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