Thomson Reuters’ (TR) recent acquisition of Pangea3 opened a number of doors for the company; the most notable being the ability to leverage TR’s existing offices as delivery centers for their service offerings. This effect is clearly visible with employment opportunities beginning to appear across job portals in the States. These are further evidence of Pangea3’s plans to broaden their existing delivery locations beyond Mumbai and New Delhi.

 
With a multi-shore delivery model, Pangea3 will be better equipped to offer their existing as well as potential clients a 24-hour delivery cycle. The biggest advantage Pangea3 has over other LPO service providers is their ability to leverage existing TR offices thus eliminating the huge costs incurred when setting up an onshore delivery center.

Pangea3 can now cater to those clients looking to outsource higher value legal services as its presence onshore means that they can charge higher billing rates. Clients will be more comfortable with the fact that this higher value work will be completed by American lawyers with expertise in the American legal system and business practices. Being in the same time zone will also be advantageous.

What remains to be observed is how receptive clients are of such a model. The convenience is offset by the costs – infrastructure, recruiting employees, wages and will translate into higher billing rates in comparison to the work being done offshore.

It will be interesting to note how Pangea3’s competitors plan to compete going forward. Majority of the service provides have delivery centers in low cost destinations such as India, the Philippines, Eastern Europe and South Africa. Even an LPO provider such as UnitedLex, which does have a delivery center in the US**, has the bulk of its work done in India. Apprehensions range from financial viability to client responsiveness as factors when deciding whether to expand onshore delivery centers.

Time will dictate whether Pangea3’s strategy is successful, which in turn will determine what, if any changes other LPO providers will incorporate within their own business model.


- Vineet Ramachandran, Analyst

**EDIT: In our newsletter titled "Pangea3 employing multi-shore delivery centers – Other LPOs feeling the heat" published on the 2nd of March, 2011, we would like to clarify that Unitedlex has 3 delivery centers in the States and not 1 as previously mentioned in the article. We would like to apologize for the oversight on our part.