The State of Sourcing

This week, Integreon bagged a 10-year contract worth £582 million from CMS Cameron McKenna. This is a huge gain for the LPO industry. Not only has the industry started seeing larger contracts but also longer term contracts.

Law firms and corporations have mostly restricted their outsourcing contracts to smaller and short-term contracts/assignments. However, lately the legal offshore market is witnessing a gradual change in terms of the size and tenure of contracts.

Established service providers such as Integreon, CPA Global, Pangea3, and UnitedLex have reported longer-term contracts in the last six to eight months. British Telecom shifted work from its captive legal services center (located in India) to UnitedLex. Microsoft signed a contract with Integreon for legal support services. Integreon will provide contract review and offshore document review services to the software giant from its India and Fargo centers. Integreon won a seven year contract worth £50 million from UK based law firm Osborne Clarke. Rio Tinto, a leading international mining group based in the UK awarded a contract to CPA Global.

Continue reading ‘Larger and longer term contracts for the LPO industry?’ »

The year 2006-07 saw large BPOs jumping into the LPO business. Now, its Indian law firms! There has been a visible increase in the interest level of Indian law firms in the LPO industry, over the last few years. Interestingly, over the last two years, about 15+ such LPOs joined the industry. Established players like Bodhi Global, Klexserve are some of the law firm backed service providers serving international law firms and corporations. Relatively newer companies like Lexplosion, Lexedge, Legal Circle, are attaining size and expanding their client base.

LPOs backed by law firms have the advantage of domain expertise from their parent company. These service providers are not only eyeing the international clientele (of their law firm), but also looking to leverage on the domain knowledge of their parent firm to serve the domestic (India) market.

Continue reading ‘Indian law firms eye LPO business’ »

- Osborne Clarke outsources technology, business intelligence, knowledge management, transcription, word processing and secretarial services.
- Clifford Chance outsources legal services like document review along with support services such as IT and document production.
- Pinsent Masons outsources document review services along with secretarial work.
- Law firms like Eversheds, Lovells and Linklaters that currently outsource support functions and are considering outsourcing legal services.

Interestingly, law firms are looking at offloading both legal and support services!

Continue reading ‘Bundled offerings in LPO’ »

How do you handle data privacy issues in India? In the absence of data privacy/protection laws, isn’t this a huge risk associated with offshoring? – These were some of the concerns raised by the attendees at a recent conference organized by the India Chapter of New York State Bar Association (NYSBA) in Mumbai.

Clearly, there were apprehensions on the part of most of the attendees with respect to data privacy. The level of confidence was understandably quite low. The reason it is understandable is because data privacy is a valid concern, given the lack of stringent data security and privacy protection laws in India. The Indian legal system does not offer privacy protection similar to other countries.

Continue reading ‘Data privacy: are we addressing this concern?’ »

India Chapter of New York State Bar Association (NYSBA) is organizing a conference on “Building Bridges between the United States and India” from 25-27 Mar 2010 at Mumbai.

The conference will focus on contemporary corporate and legal themes. Speakers include Stephen P. Younger (Patterson Belknap Webb & Tyler LLP, NYC), James P Duffy III (Past Chair, NYSBA, NYC), Michael W. Galligan (Immediate Past Chair, NYSBA, NYC), Steven C. Krane (Chair, NYSBA, NYC), Som Mandal (FoxMandal Little, New Delhi), Cyril Shroff (Amarchand Mangaldas Suresh A. Shroff & Co, Mumbai), Nishith Desai (Nishith Desai Associates, Mumbai) and Arun Jethmalani (CEO, ValueNotes) among others.

For more details about the event, please click here.

Hiring contract review attorneys, temp staffing companies, litigation support companies – these are the various options available for procuring LPO services within US.

Over the last one year, the legal market in the US witnessed dramatic changes. A large number of attorneys, associates and support staff from the law firms and corporations lost their jobs. While this has impacted the legal market, it has also increased competition for the offshore LPO industry. Some of the lawyers, associates and paralegals (who lost their jobs) are seeking work as contract attorneys (with reduced billing rates!). A contract review attorney is billed at a much lower rate as compared to a law associate. The average billing rates for contract attorneys range from $35 to $80 per hour and onshore service providers rates range from $50 to $180 per hour.

While billing rates vary depending on the services offered, volume and their complexity level, marginal pressure on billing rates (for certain services) in the offshore industry was visible. Of course, the billing rates of onshore lawyers will not be comparable to rates of the offshore service providers; however the increasing competition for offshore LPO service providers cannot be dismissed.

Continue reading ‘Competition from onshore?’ »

Despite the compelling needs of outsourcing, there have been instances in the recent past where some companies (although for different reasons) have shifted work back to their roots (onshore). This has been primarily seen in verticals including banking, financial services, retail, etc.

Bringing back the (offshored) operations in-house is not an attractive option for any company, as it eventually adds to their costs. However, there must be some compelling reason that forced companies to take work back onshore/in-house. The reasons might vary from….not enough cost savings, unsatisfactory results, quality not as expected to not a right choice of vendor.

Last year, we had conducted a survey of US and UK based law firms, which threw an interesting finding – “10% of the survey respondents tried and rejected offshoring”. During our course of research, we found a number of buyers who cited unsatisfactory work quality for abandoning their offshoring initiatives. Could this mean not enough groundwork done before selecting a vendor? Possibly!

Continue reading ‘Vendor selection – How important is it?’ »

In one of my previous posts, ‘UK Law Firms: Catching up on offshoring‘, I shared my views about UK based law firms opening up to the idea of offshoring. The growing interest amongst the buyer community was also evident at a recent conference that I attended on ‘Legal Process Outsourcing and Offshoring‘, organized by the Lawyer magazine in London.

The fact that several partners and attorneys participated in the session reflects the high level of interest in the subject. Several law firms indicated that their clients are increasingly suggesting using offshore service providers. The motive behind corporates pressurizing law firms is quite obvious – lower costs.

Continue reading ‘Wake up call to law firms!’ »

The year 2008-09 will be remembered for the collapse of Lehman Brothers (the largest bankruptcy in the US history so far!) and also for all the numerous individuals, companies and cities that have withered under the pressure of the financial crisis. There are thousands of companies that have gone bankrupt. A total of 1,306,315 bankruptcy cases filed from June 2008 to June 2009 period (a 35% jump compared to the number of cases filed over the previous year), as per the Administrative Office of the US Courts. And the list of failed companies is only growing longer. Well, that’s the impact of the global economic meltdown, which has seen many corporations closing down due to bankruptcies leading to layoffs across the globe.

Business filings jumped by 63% to 55,021 for June 2009 from 33,822 filings reported in June 30, 2008. Recession hit several individuals and businesses. Even  cities in the US have not been able to escape the impact. Some are facing financial hardships  given the foreclosures, court damages, city wages, pension-plan losses, etc. Orange County, California in 1994 was the largest bankruptcy filed by a city in the US history so far! Last year, Philadelphia, Phoenix and Atlanta requested the Treasury Department for a $50 billion of the $700 billion from the “Troubled Asset Relief Program” in order to boost the local economies.

Continue reading ‘Gone to the wall!’ »

“Law firm axes attorneys, associates and staff positions” – News like this has been hitting the headlines frequently over the last one year.

Since mid-2008, law firms such as Clifford Chance, Eversheds started trimming their staff strength (lawyers, associates and support staff) while others like Thelen Reid Brown Raysman & Steiner LLP have discontinued operations. The market conditions had a severe impact on the financial performance of most law firms, who reported significant drop in revenues. Drop in legal spend, shrinking budgets and corporates moving their work in-house has impacted law firms adversely. Corporates looking to reduce expenditure are making attorney fees a soft target for cost reduction. The last eight months have been more severe for law firms and have further hit their revenues and profitability. As a result, several law firms (including Am Law 200, Magic circle firms and other law firms) resorted to cutting their staff strength. Law firms dealing largely with mergers and acquisitions are the hit hardest. With the housing market taking a dip, the US and UK conveyancers have seen a drop in their business.

A number of US and UK law firms, including Allen & Overy, White & Case and Shearman & Sterling, Clifford Chance, Freshfields Bruckhaus Deringer and Lovells have temporarily halted recruitment of associate positions and have announced corresponding cuts to starting salaries. (Some are also re-looking their compensation model!)

Continue reading ‘Challenging times for law firms’ »