Scaling up Knowledge
Two years back, the question, “Is the knowledge services business scalable?” raised a lot of interest at a conference. Recently, a client asked me a similar question, “How important is size for an LPO?” . Well…the scenario two years back was quite different, with scale and specialization used as two distinct differentiators. The knowledge services business (especially, the LPO business) was not perceived as scalable (with a majority of 40 and 50 people companies). However, this is changing now as a result of the shifting needs of clients and increasing volume of work sent offshore.
Company size and scalability are important selection criteria, according to our recent survey of US and UK based law firms. Amongst the companies that have indicated greater importance for size are large law firms that are looking at service providers as an extension of their support staff and intend to send large volumes of work, across service lines. In other cases, size of the service provider does not appear to be such a crucial factor, given that the industry is yet to move towards larger contracts that require over 100 to 200 people at any given point of time.
Consequently, service providers are gradually scaling up their headcounts. Several offshore legal service providers are seen on an aggressive growth path (organically and inorganically). Mindcrest, one of the early entrants in this segment, has grown to over 650 professionals. Pangea3 started with less than 40 employees in 2004 and now has over 350. QuisLex has grown to over 300 employees from 25 in 2005. While these providers are rapidly scaling up, they have also retained their positioning as being specialists. Having reached certain maturity in terms of service offerings, most players in the segment are developing scale and widening their scope of offerings.
The BPOs reigned on their ability to scale, while the knowledge services providers used ‘knowledge’ as their USP. However, as the LPO industry continues to grow, ‘scalability’ may not remain the exclusive domain of BPOs after all.
- Neeraja
Last 5 posts by Neeraja
- BPOs in the LPO industry? - May 26th, 2010
- Larger and longer term contracts for the LPO industry? - May 18th, 2010
- Indian law firms eye LPO business - May 12th, 2010
- Bundled offerings in LPO - April 28th, 2010
- Microsoft-Integreon deal adds fillip to the LPO momentum - April 13th, 2010
