The new legal innovators

LPOs are poised to reshape the global market for legal services, argues Sanjay Kamlani, the co-CEO of Pangea3

Legal process outsourcing (LPO) has come a long way since 2001 when General Electric (GE) made the concept a reality by utilizing in-house counsel in Delhi to handle procurement agreements for its affiliates around the world. In 2003, Lawrence Harnett, the senior counsel for the Americas at GE Plastics, announced that the credentials of Indian lawyers were “impeccable”, stating that his clients were “really happy with the work”. By 2004, GE reported annual savings of more than US$2 million from its outsourcing programme. At the same time, several other captive centres of excellence had generated an additional US$3 to US$5 million in revenue or cost savings for their corporate parents.

Currently, a group of about 10 top-tier LPO providers, dozens of smaller service providers and captive outsourcing units of many multinational corporations deliver a wide variety of legal services including contract drafting, legal research and related motion drafting, electronic discovery, regulatory compliance and patent prosecution and related analytics. Independent market research by the National Association of Software and Service Companies (NASSCOM), ValueNotes, and various LPO consultants indicate that there are now 5,000-10,000 lawyers working in India-based LPOs, generating annual revenues of US$250-US$500 million. Considering the recent growth of the sector, India’s LPO market can be expected to grow to at least US$1 billion by 2010.

Decision-making lawyers in the US and Europe, particularly the in-house counsel at multinational corporations, have come to appreciate the LPO providers that have successfully brought together impeccable legal credentials with process expertise, including Six Sigma tools and methodologies, lean cell manufacturing and other concepts that have made efficiency a key component of their value proposition. These in-house counsel have visited LPO facilities across India and have seen for themselves that process-expert lawyers are housed in state-of-the art secured facilities that are integrated with international markets through advanced technology.