As consolidation reshapes the global LPO landscape, India Business Law Journal reveals the leading service providers
Faced with a frenzy of activity, legal process outsourcing (LPO) providers have been kept on their toes this month. US President Barack Obama’s visit to India presented an opportunity to air grievances, as LPOs expressed their concerns over new tax rules in the US that may spell trouble for service providers with Indian operations. However, this was balanced by celebration as the industry witnessed its first wave of consolidation: a sign of growing maturity in a still-nascent industry. Clients too, appear to be treating the legal process outsourcing industry with a greater level of trust and respect.
“One thing we’ve seen is a real change in terms of how law firms are viewing LPOs,” says Sanjay Kamlani, co-CEO at Pangea3. “Law firms have been approaching LPOs like ours using the services and value-add to be innovative and add to their offerings to clients.”
As trust between LPOs and their clients continues to increase, so too does the sophistication of the work that is being entrusted to them. “A forward-looking trend that we see is the high-end, higher-value work, which involves a greater skill set,” says Russell Smith, president at SDD Global Solutions, an LPO provider with operations in Mysore and Bangalore. “Now that legal outsourcing companies have broken the ice, the next logical step is high-value. It’s not the flavour of the month by any means, but we’re looking towards the future.”
“As compared to maybe a few years ago, clients are looking at LPOs as much more of a longer-term partner for legal functions,” explains Kamlani. “They aren’t looking at individual transactions, they’re looking to integrate their teams and really get value out of partnerships that involve functions that are being performed.”
Interesting times indeed for a service sector that barely existed just 10 years ago. And a fitting moment for India Business Law Journal to reveal the results of its second annual Legal Process Outsourcing Awards.
The awards are presented in six categories – Best Overall LPOs, Legal Support, Litigation Support, Intellectual Property Services, Contract Services and Corporate Services – with five winners of equal standing in each category except Litigation Support, which has 10 winners of equal standing. An additional award of LPO of the Year has been given to a single service provider.
A description of the scope of each award, along with details of the methodology and judging criteria, is provided on page 33. A full list of winners can be found on page 37.
LPO of the Year
For the second year running, the recipient of India Business Law Journal’s top award – LPO of the Year – is Pangea3. Picking up awards in all but one category, Pangea3’s success reflects its tenacity in maintaining quality and service excellence. The company received significantly more votes than any other LPO provider in India Business Law Journal’s client survey and won glowing endorsements from clients and industry peers alike.
Pangea3 built its reputation quickly following its establishment in 2004. With headquarters in New York and Mumbai, the company employs approximately 650 US and Indian lawyers who provide the full range of legal outsourcing services from facilities in Mumbai and New Delhi. These professionals were recruited from Indian Institutes of Technology in India, Ivy League law schools, companies such as Ford, GE, Monster, Orange and PricewaterhouseCoopers and law firms including Amarchand Mangaldas and Kochhar & Co.
Pangea3’s quality control process includes the use of Six Sigma methodologies and regular on-the-job training exercises supervised by senior managers and India-based, US trained and admitted, attorneys. The company’s impressive repertoire of clients includes Coca-Cola, Credit Suisse, Philip Morris International, General Electric and American Express, as well as several international law firms and financial services companies.
This month, Pangea3 was acquired by Thomson Reuters, an international news and business information provider, in one of the most significant consolidations in the LPO market to date (see News, page 8). The deal is estimated to have been worth more than US$35 million.
With the resources and financial backing of Thomson Reuters, combined with the efficiencies and cross-marketing opportunities that the merger will facilitate, Pangea3 appears well-placed to expand the scale and range of its services. Kamlani, the company’s co-CEO, believes that Pangea3 is blazing a trail that others will follow.
“I think you’ll see more consolidation and I think that is because for any of the top players to really compete at the top level, they’re going to require a higher level of scale,” he says.
The LPO ‘magic circle’
Four of last year’s winners in the category of Best Overall LPOs retain their positions this year. CPA Global, Mindcrest, Pangea3 and Quislex all feature on the winners’ list. The fifth spot, which was occupied by Integreon in 2009, has been taken by Kansas-based UnitedLex.
UnitedLex’s success in this category was propelled not only by its widely praised performance, but also by its recent acquisition of six-year-old LawScribe, which itself won recognition for its legal support services in last year’s awards. The acquisition was announced just days before the Pangea3-Thomson Reuters deal, prompting further speculation that a wave of consolidation is poised to sweep the LPO industry.
By absorbing LawScribe’s facilities and 120-odd employees in Los Angeles, New York and Gurgaon, UnitedLex has strengthened its presence in India and the US. It already had its own offices in Kansas, London, Tel Aviv and Gurgaon and a staff of approximately 650.
In addition to being named one of the Best Overall LPOs, UnitedLex receives awards in the categories of Litigation Support, Intellectual Property Services and Corporate Services.
CPA Global, which was established in Jersey in 1969, dominates the market in terms of its sheer size. It has more than 1,500 professionals spread across facilities in Europe, the US, Asia and Australia.
The company was initially focused on intellectual property-related work, but broadened the scope of its offering in 2005 to become a full-service LPO. It is widely praised for its innovative use of technology, in particular its heavy investments in customized software to better meet the needs of its clients.
In June this year, CPA Global celebrated the first anniversary of its landmark legal outsourcing agreement with Anglo-Australian mining giant Rio Tinto. A team of 18 lawyers at CPA’s Gurgaon office is dedicated to working as an extension of Rio’s global legal team, performing a variety of services including document and contract review, transaction support and legal research.
Another recent highlight for the company was its appointment of Rio Tinto’s managing attorney, Leah Cooper, to its executive team. Cooper, who was credited with spearheading Rio’s foray into outsourcing – and cutting its legal bill by 20% as a result – joined CPA in February. In her new role, she focuses on strategy and development, using her in-house expertise to devise customized legal outsourcing solutions for other LPO clients.
In addition to Best Overall LPOs, CPA Global wins awards in the categories of Litigation Support, Intellectual Property Services and Contract Services.
A strong contender for India Business Law Journal’s LPO of the Year award was Mindcrest, which in addition to receiving the Best Overall LPOs award, is a winner in the categories of Legal Support, Litigation Support, Contract Services and Corporate Services.
Mindcrest prides itself on client retention and emphasizes its ability to give its clients complete control, especially on the cost side, of the matters being handled. “We do not charge for anything not agreed in advance,” explains Teju Deshpande, the company’s co-founder and vice-president of client services. “Sometimes there are unexpected turns that can have a serious impact on costs and timescales. If so, we will revise the costs and timescales with the client before undertaking further work.”
Mindcrest employs over 600 lawyers in India and operates from offices in Chicago, San Francisco, New York, Washington DC, Mumbai and Pune.
Hyderabad-based QuisLex sits comfortably among the LPO elite, with 350 staff serving Fortune 500 companies, financial institutions, technology companies, top-tier international law firms and legal publishers. In addition to its success in the category of Best Overall LPOs, QuisLex walks away with awards for Legal Support, Litigation Support and Contract Services.
Methodology and judging criteria
India Business Law Journal’s 2010 LPO Awards are based on quantitative data combined with the insights of outsourcing clients
Recipients were typically senior in-house counsel at major international corporations and partners at regional and international law firms. They were asked to confidentially score the work of all LPO providers with which they were familiar in the following areas of service provision, each of which corresponds to one of the award categories:
Legal Support includes functions such as coding and indexing; document management; database support; legal billing; preparation of motions, pre-trial briefs, summonses and notices; statutory reports and filings; demand and mediation packages; summaries and timelines; internet research; legal publishing, such as compilation of databases; optical character recognition; and legal transcription
- Litigation Support includes functions such as document review and analysis; e-discovery; legal research and analysis; factual research; and the preparation of briefs, arguments, memoranda, summaries, depositions and pleas
- Intellectual Property Services includes functions such as literature and prior art searches; patent portfolio analysis and proofreading; docketing services; drafting patent applications and preparing patent drawings; and prosecution
- Contract Services includes functions such as contract review, analysis, drafting and management, and the preparation of abstracts
- Corporate Services includes functions such as corporate governance, due diligence and compliance management
In giving their scores, respondents were requested to consider five key performance criteria that are often used to benchmark LPO providers: quality of service; consistency and reliability of service; the level of innovation demonstrated by the service provider; the service provider’s ability to customize its services to meet client objectives; and value for money that was received.
In addition, survey respondents were invited to provide qualitative comments on their level of satisfaction with each LPO service provider. All such comments were taken into account by our editorial team during the judging process. Some have also been quoted in the awards coverage, but a significant number of respondents requested anonymity.
A separate survey was sent to more than 50 LPO providers. Each was invited to support its candidacy for the awards by submitting details of notable achievements, client references and a concise explanation of how it strives to attain the five key performance criteria listed above. LPO providers were also asked to indicate which of their competitors they judged to be leaders in each of the awards categories.
In reaching its final decisions, India Business Law Journal’s editorial team used a combination of objective data and subjective analysis. The numeric data collected from the two surveys formed the basis of the results, but was considered alongside the subjective comments received from LPO clients around the world. The submissions received from LPO service providers were also considered as part of this process, as were the references provided by their clients.
In order to be considered for India Business Law Journal’s LPO Awards, service providers were required to have a presence in India.
Five winners of equal standing were chosen in each category, with the exceptions of LPO of the Year, in which a single winner was chosen, and Litigation Support, in which 10 winners of equal standing were selected.
In the category of Legal Support, awards are presented to Integreon, Mindcrest, QuisLex and two new entrants: Clutch Group and Cobra Legal Solutions.
With a headcount of 1,000 in India, Integreon’s facilities are located in Mumbai and New Delhi. One of the company’s main accomplishments this year was closing a record-breaking outsourcing deal valued at £583 million (US$900 million) with CMS Cameron McKenna. The UK-based law firm signed a 10-year agreement in May to outsource middle office services, including accounting and finance, human resources, marketing, information services, information technology and facilities management to Integreon.
Describing its work for one client in the area of legal support, Matthew Banks, senior vice-president of legal services at Integreon, explains how the company created a “virtual secretary” to help a law firm reduce its lawyer-to-secretary ratio. “Integreon provided firm-wide 24/7 word-processing and ‘virtual secretary’ overflow services from one of its delivery centres,” says Banks. “This enabled the client to eliminate in-house word-processing centres and the associated overhead costs … and also freed secretaries from content-intensive tasks, allowing them to support more lawyers.”
Some of Mindcrest’s achievements in the field of legal support include conducting research on attorney-client privilege rules in 17 Asian and South American countries and surveying the corporate laws related to the establishment of dealerships or distributors in Africa.
Alphonse Valbrune, the general counsel at Headstrong in Virginia, who is a client of Mindcrest, describes his level of satisfaction with the LPO as high. “They had good turnaround and accuracy,” he said.
As part of its legal support services, Chicago-based Clutch Group creates client-tailored research tools and databases of relevant statutes and regulations, drafts legal memoranda, performs online legal database research, and provides comprehensive document review solutions, both domestically and offshore, through its US operations and its legal support centre in Bangalore. Clutch recently assisted an international law firm with a multi-jurisdictional review of millions of documents relating to the Foreign Corrupt Practices Act in a variety of languages including English, Russian, Portuguese and Chinese.
With just 62 staff, Chennai-based Cobra Legal Solutions is smaller than many of its LPO rivals, but its client list is proof that size doesn’t always matter. The company’s clients include international law firms such as Orrick, Davis Polk & Wardwell, Alston & Bird, Gibson Dunn & Crutcher and Fulbright & Jaworski.
Cobra has won widespread praise from enthusiastic clients. Stephanie Carpenter, an associate at Orrick in New York, says Cobra has been “very good at doing document review … I have been very happy with the service. They have been very helpful.”
John Douglas, a partner at Davis Polk & Wardwell says of Cobra: “They were outstanding. Extremely high quality, responsive and excellent pricing. They made an extra effort to keep me informed of the project, provided interim status reports and were more interested and enthusiastic than any other domestic source I have used.”
Douglas names Cobra Legal Solutions, Pangea3 and Integreon as the top LPO providers in India and has worked with all three for litigation support, contract review and maintenance, but says that for “straightforward due diligence and other paralegal, administrative and document work, I consider Cobra to be hands down the best in class.”
Litigation support is the bread-and-butter for many LPO providers and often the first experience that clients have of legal process outsourcing. It is also one of the most competitive fields within the LPO industry and price has emerged as a primary differentiator among service providers. “The price competition is tremendous,” says Smith at SDD Solutions, adding “I don’t think anyone is making a profit on document review.”
Nevertheless, the enduring role of litigation support as the cornerstone of the LPO industry was reflected in the results of India Business Law Journal’s client survey. More votes were cast in this category than any other. At the same time, the number of high-scoring LPO providers was much greater, indicating a wider field of top-tier service providers than that in other categories of LPO work. For this reason, India Business Law Journal’s editorial team decided to increase the number of recipients of this year’s Litigation Support Award from five, which is standard in the other award categories, to 10.
Awards in the category of Litigation Support are presented to Atlas Legal, Bodhi Global, CPA Global, Integreon, LegalEase, Lexadigm, Mindcrest, Pangea3, QuisLex and UnitedLex.
LegalEase, an LPO with 40 employees based in Kerala and Chennai, currently works with a Fortune 500 automotive manufacturer offering litigation support through deposition summaries and motion drafting. Its staff attorneys read all incoming lawsuits for the client and prepare answers and motions for summary judgments after reviewing discovery materials. The pleadings are subsequently reviewed by outside counsel and ultimately filed. According to LegalEase’s CEO, Tariq Akbar, such arrangements have slashed costs for these functions by up to 50%.
“I have been very satisfied with LegalEase’s ability to turn around research assignments on short notice,” says a partner at a New York law firm. “Qualilty, value and responsiveness have all been wonderful. My use of LegalEase has been focused on litigation support, including legal research as well as document management. They seem to be well suited to this type of work, and I will use them for these assignments in the future.”
Bodhi Global has its offices in Pune and Mumbai. Over the past year the company has completed numerous document review projects, which typically involve coding for responsiveness, potential privilege, confidentiality, and categorization of responsive documents into various baskets, including tagging certain documents as hot documents within a challenging timeline.
“We regularly recommend Bodhi Global to our clients as a competent, highly cost-effective litigation-support resource, says Joseph Valentine, of counsel at Colorado-based Wheeler Trigg O’Donnell. “We have [also] found Bodhi Global capable of meeting the existing deadlines in a particular project. Their review facilities are modern and innovative.”
Atlas Legal’s litigation support attorneys receive extensive training in US law to ensure strong capabilities in offshore legal research and writing. The company, which is headquartered in Dallas and has an office in Bangalore, has been providing satisfied clients with high-quality memos, briefs, motions and general legal analysis for over nine years.
Established in 2004, Lexadigm assists clients with all stages of discovery, including document identification, preservation, collection, processing, review, and production. The company has facilities in Michigan and Gurgaon.
Pangea3 has strived to provide cost-effective litigation support for corporate counsel in class action suits, government investigations, patent litigation and complex business disputes. Last year it provided document review assistance to a major international investment bank for commercial litigation, working with outside counsel on a breach of contract and fiduciary duty class action against the investment bank that resulted from an asset acquisition.
Mindcrest also conducted a large volume document review for a class action litigation, and is currently reviewing documents for a highly technical software litigation in the UK.
QuisLex was engaged in several complex patent litigations in the last 12 months and also handled investigations in the healthcare, technology, finance and manufacturing industries.
Meanwhile, a Fortune 500 consumer products company worked with Integreon to resolve high-profile product liability actions it was facing in multiple jurisdictions. Integreon worked collaboratively with the client to design a workflow and team structure in order to review 4.5 million documents. The LPO deployed 36 review associates, four team leaders, a workflow coordinator, and a review manager for 17 months. The client saved significant costs as a result, and subsequently approached Integreon again to create a similar hybrid support system for a different project.
Intellectual Property Services
In the category of Intellectual Property Services, CPA Global received significantly more votes than any other LPO provider. A stalwart in this field of outsourcing, CPA recently launched what it calls the “world’s most sophisticated patent search platform”. The system allows clients to scour more than 80 million patents from 95 nations. The technology, CPA Global Discover, promises to provide more accurate and relevant search results than similar tools on the market. It is available exclusively to the company’s corporate and law firm clients.
Other winners in this category are Evalueserve, Integreon, Pangea3 and UnitedLex.
Evalueserve offers customized IP and legal process services to leading technology companies, startups and law firms worldwide. The company has research centres in India and China and carries out research and analysis in multiple languages. With a team of more than 250, including professionals from the fields of engineering, life sciences and toxicology, Evalueserve provides a complete suite of IP solutions. Some of its key services include patentability and invalidation searches, freedom to operate studies, patent portfolio analyses and chemical assessments for compliance with REACH (Registration, Evaluation, Authorization and Restriction of Chemicals), a new chemical regulation in the EU.
Pangea3’s IP division is headed by a US Patent and Trademark Office-registered patent attorney. The team has diverse expertise in electronics and telecommunications, computer science, chemical engineering, pharmaceuticals, biotechnology, bioengineering, mechanical, aerospace and general engineering.
UnitedLex’s IP support solutions encompass patent, trademark and copyright solutions and competitive intelligence solutions. The company undertakes IP-related work for a number of top-tier international law firms.
India Business Law Journal’s 2010 awards for Contract Services go to CPA Global, Mindcrest, Pangea3, Pramata Knowledge Solutions and QuisLex.
QuisLex has assisted clients in several compliance-related initiatives and undertaken a number of M&A due diligence projects. Pangea3 drafts both simple and complex contracts, working closely with clients to learn their playbooks, templates, forms, preferred positions and “hot button” issues. The company’s clients in this area include American Express, General Electric, Cognizant Technology and Cardinal Health.
Till Olbrich, vice-president of regulatory policy at Philip Morris International Management in Switzerland, says his company has outsourced work to Pangea3 since early 2007. He describes the LPO as “very good” in terms of consistency, reliability and customer service, and says he was pleased with its innovation and value for money.
Mindcrest has also been busy with the drafting and review of contracts for a variety of clients. Some of its achievements include reviewing and categorizing over 6,500 documents in English, German, French, Italian, Spanish, Portuguese, Japanese and Hebrew related to software licensing contracts for over 2,000 clients of a computer software provider. After identifying the relevant contract information, Mindcrest reviewed and abstracted the relevant terms of each client contract. It also reviewed and organized over 5,000 telecommunications contracts for a major cable company.
Pramata, a first-time winner in India Business Law Journal’s LPO Awards, focuses exclusively on contractual management and intelligence, offering its clients a comprehensive suite of solutions to answer critical questions related to risk management, regulatory compliance and customer delivery.
A US$3.5 billion pharmaceutical company is currently working with Pramata to support its Medicaid best-price compliance processes, while Lockton, a privately held insurance brokerage, is employing Pramata’s document creation wizard and workflow processes to manage risk by ensuring that its complex revenue-generating contracts comply with governmental regulations.
Corporate service solutions offered by LPO providers cover everything from governance, compliance and risk management to corporate secretarial services. The winners in this category are Integreon, Mindcrest, Pangea3, UnitedLex and Williams Lea.
Pangea3’s compliance and risk management services include M&A due diligence and KYC (know your customer) services. In the last 12 months the LPO has performed M&A due diligence on over 3,000 contracts related to an industrial equipment manufacturer’s potential acquisition of a competitor. It coordinated with external counsel on the preparation of the final memo for its client.
Integreon, meanwhile, assisted an insurance provider with the development of a go-to-market strategy for a new device that alerts users to potential back injury risks. Integreon identified industries prone to back injuries, profiled similar device manufacturing companies to identify potential partners and assessed the relevant regulatory requirements. It conducted qualitative interviews with industry professionals and independent ergonomic consultants to help the insurance firm identify target customer segments and strategies with which to approach the market.
Mindcrest undertook due diligence projects last year for a medical products company and a major retailer, among others. In addition, it worked to track legislation in the areas of tax, real estate and corporate law in order to create a web-based compliance database to maintain filing and other reporting obligations for a global technology company.
UnitedLex’s corporate services have ranged from isolated drafting of corporate minutes for a Hong Kong entity, to tax filings in Nebraska and a company dissolution in Argentina. Prior to undertaking such services, UnitedLex conducts in-depth interviews to determine the global governance goals of each client to produce a concise, transparent programme to meet those targets.
As part of its expansive due diligence offering, Williams Lea emphasizes the importance of technological innovation, effective brand management, customer insight and back office processing. With offices in the UK, Europe, the US, China, Australia, Southeast Asia and India (Bangalore, Cochin, Chennai and Hyderabad), its capabilities are truly global. The company serves clients on a consultancy basis and works with senior executives to understand their organizational priorities and re-engineer processes for competitive advantage.
Runners-up and rising stars
While 15 leading LPO providers receive well-deserved recognition in India Business Law Journal’s 2010 Legal Process Outsourcing Awards, many others were nominated and endorsed by clients and industry peers but narrowly missed the winners’ tables.
Chennai-based Aphelion, for example, provides litigation support, contract services and legal support for law firms and corporations. The LPO recently worked with the senior counsel of a Fortune 500 company, providing legal support services on document-intensive projects. The counsel praises Aphelion’s managers for their experience, accessibility, technical proficiency and responsiveness.
Tusker Group also received broad praise for its services in litigation support and document review. The firm has been in the market for almost a decade and has over 100 employees in Bangalore, Chennai and Mysore.
New players are also starting to make their mark. Infosys, a veteran business process outsourcing (BPO) provider, is gearing up to provide clients with a complete set of LPO services that extend beyond pure legal assistance. “Are law firms only looking for LPO services?” asks Rahul Shah, head of the Centre of Excellence at Infosys and leader of the pre-sales team for knowledge services business at Infosys BPO. “No, they aren’t. We are providing research, contract abstraction and BPO services to our law firm clients.”
Kamlani downplays the threat posed by new entrants. “A lot of the IP and BPO firms have entered the space and they’re spending time and resources to build LPOs,” he says. “They’re not real contenders for front-office type legal work at the moment, but over time, they’ll definitely climb their way into the front end.”
But according to Shah, the strengths of traditional LPO providers may ultimately prove to be their downfall. He believes that the ad hoc nature of LPO work and the narrowly defined capabilities of most LPO providers are limiting the attractiveness of such services and damaging client relationships. This, in turn, is creating opportunities for more diversified service providers that can perform a broader range of functions. “We need to provide services that are a combination of knowledge process outsourcing, BPO, LPO and more,” he says.