Economic downturn has enforced leading British law firms to rush towards India in search of quality legal works.
Some of Britain’s biggest law firms have been cutting costs during the downturn by sending tasks including conveyancing, accidental claims and due diligence investigations to young lawyers in India. Thousands of Indian lawyers and recent law graduates are being employed by British firms for a fraction of the cost of having the same work done in the UK. Alok Aggarwal, CEO, Evalueserve, opines “Foreign law firms are better off giving work to an Indian LPO provider because the work culture in India is much different than in the U.S. and U.K. Alternatively, they can create joint ventures or “novel” corporate governance and mechanisms to run the LPO unit in India.”
The world’s largest law firm, Clifford Chance is leading the charge for cheaper support services. The law firm has set up its own bespoke offshore centre in Delhi.
Another leading UK law firm, Eversheds has confirmed that it is making use of Indian-based legal resource centres. Now it has emerged that dozens of more legal businesses have expressed their interest in following this suit by outsourcing hundreds of millions of pounds worth of high-volume work.
CPA Global, a legal process outsourcing company, said that more than 30 law firms and company legal departments are in talks to use their legal support base in India, which employs over 450 graduates and lawyers. Two law firms have already signed the deal, but are sensitive about going public.
CPA is one of the biggest providers of these services in India and counts Microsoft among its clients. It says that the downward pressure on legal costs in the economic downturn has forced the once conservative legal profession to consider radical means for delivering legal services to clients, who want fees to be fixed, rather billed at an hourly rate.
"Legal process outsourcing has been on the agenda for some time by corporations and law firms looking for reduce costs, but the economic downturn has significantly accelerated this trend.We have seen enquiries being increased dramatically. At the beginning of the year, we were talking to five prospects. Now we are in discussions with over 30, more than 20 of these being law firms and another 10 being corporate legal departments."
Indian firms have responded by offering US and UK law firms litigation support and compliance work at around 100 different legal outsourcing centres. This is a boom time for Indian LPO industry as international law firms are turning to India in a big way in order to mitigate their costs and maximize their profits. The advantages that India has as the emerging hub of LPO industry are many. For instance, they can easily cater to foreign clients as India has a large pool of English speaking and highly skilled professionals. Alok Lakhanpal, Advocate, High Court and district courts states, “Apparently it’s a win-win situation for both, as the law firms of the developed countries are able to cut their cost of legal processing and the lawyers of the developing countries get a reasonably attractive job opportunity right after their law graduation which would not be available to them otherwise. But the flip side is that young budding lawyers are bartering their careers for a short term attraction of earning quick bucks, because in reality this is not a long term career option for lawyers.”
Andrew Loach, Vice President of business development at CPA, said, “Legal process outsourcing has been on the agenda for some time by corporations and law firms looking for reduce costs, but the economic downturn has significantly accelerated this trend. We have seen enquiries being increased dramatically. At the beginning of the year, we were talking to five prospects. Now we are in discussions with over 30, more than 20 of these being law firms and another 10 being corporate legal departments.” He added, “Law firms recognise that they have no control over external factors such as market conditions, so they are starting to focus on things they do have control over, and one of the most important is their internal cost base. Many managing partners of law firms have recognised that top-line organic growth will be difficult to achieve during 2008-2009, and that profits may suffer during this period. They have become much more receptive to assessing alternative and innovative ways of reducing their cost base to reflect current trading conditions.”
“Foreign law firms are better off giving work to an Indian LPO provider because the work culture in India is much different than in the U.S. and U.K. Alternatively, they can create joint ventures or "novel" corporate governance and mechanisms to run the LPO unit in India.”
Law firms are attracted to India because of its large pool of English speaking graduates, around 80,000 graduates each year, and its common law system based on English law. The often negative image of call centres is increasingly being replaced by more accurate perceptions of the quality of legal work, available from professionals in India.
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