LPOs flourish on US business - American Economic Downturn Opens New Windows Of Opportunity

Mansi Tiwari NEW DELHI 

THE Wall Street crisis has proven to be a windfall for legal process outsourcing (LPO) companies. The crisis that impacted the fortunes of Indian IT firms has the country’s LPOs laughing their way to the banks with huge amount of litigation work coming their way from the US. After leading BPO companies like Infosys and Wipro, a leading software solution provider Zenith Software and Nasdaq-listed EXL Service are now looking at LPOs as a major business opportunity. 
    “We have defined LPO as one of our strategic areas of focus and we have hired a senior executive with rich experience to head our LPO initiative. We are in the process of building up the operations team. We are also servicing a client in this space and are confident of signing new clients in 2009,” said Rohit Kapoor, president and CEO of EXL Service. 
    Zenith Software recently entered into a JV with a Oregon-based law firm. The name of the newly incorporated company has not been revealed yet. “Seeing the kind of opportunity that it offers, we wanted to get into LPOs. But we wanted to do it in a systematic manner and have partnered with a law firm in the US,” said P Sampathkumar, CEO of Zenith Software. Considering the Wall Street crisis, the company is sure to bag some big projects in 2009 as there will be lot of litigation related to bankruptcy, M&As and other related aspects. 
    Industry figures estimate the LPO sector to be approximately $3-4 billion. According to experts, around 30% of the top 10 Indian BPO players have shown interest in starting LPOs. “LPO has the potential to become one of the sunshine sectors for the Indian Economy. IT companies, non-outsourcing and non-legal entities, captive and large Indian law firms are expressing interest in it. But every company has its own strengths and weaknesses,” said Soumitro Chatterjee, CEO of FM Legal Circle Services. Dealing with post meltdown issues 
LPOS have seen an increase in the work flow from the US and the UK. Most of them deal with post-meltdown issues like downsizing, closure of branches, restructuring and termination notices to collaborators and franchisees. 
    LPOs in India are about 60% more cost efficient than in the US. According to estimates, a senior associate in US gets approximately $200 per hour for a document review whereas it costs around $30 in India. India also has abundant talent in law. “On the demand side, the rising litigation costs in the US and the UK are driving the business offshore. On the supply side, India conducts its legal proceedings in English, making it relevant in both the US and the UK markets. India borrows from the British legal system thereby strengthening outsourcing prospects in the UK,” said Kapoor. Reports suggest that around 300,000 students enrol in various law schools in India every year. There is thus no doubt that India is emerging as a sought-after destination for legal outsourcing. 
    mansi.tiwari@timesgroup.com 

Source: ET, Page 1, Dated: 7-Dec-08