Fortune 500 firms driving LPO industry

Fortune 500 firms, a US based software firm promoted by a person of Indian origin with a development centre in Bangalore and a legal training firm based out of Mumbai are driving legal process outsourcing (LPO) to India.

LPO encompasses contract drafting and review, litigation support, intellectual property, and legal research and drafting.

Sony Pictures had to prepare an 'opinion letter' (outlining the activity and the risks involved) for insurance firms in order to secure cover for shooting a movie, and the movie's fate hinged on the letter and the cover.

Preparing the letter was a 400-man hour job which would have cost $250,000 to get done in the US and Sony gave it a second thought. Eventually, the job was done in India for $43,000.

In India, lawyers are paid $30-90 per hour whereas the cost in the US is $300 an hour. The English speaking countries account for $185 billion of the $250 billion global legal industry. Indians who are familiar with both the English language and the Anglo-Saxon legal system are equipped to grab a share of this business.

The Indian LPO industry is valued around $145 million per year by Value Research, an independent provider of investment information. There are over 30 entities in India engaging in LPO work for mostly US and a few British law firms, according to a lawyer active in the sphere.

"The $145-million LPO business is just about a fraction of the potential," said Abhi Shah, CEO of JuriMatrix, a global legal solutions company. India churns out about 79,000 English-speaking lawyers and even if a fraction of them have usable skills then the number becomes large. The present addressable market is $3-4 billion, according to Nasscom estimates, said Shah.

A person who sniffed the opportunity and decided to explore it is Russell Smith. Russell Smith, president and chairman of SDD Global Solutions today has 30 lawyers on its rolls in Mysore and 10 at its headquarters in New York, and plans to up this to 200.

"While law firms mark up expenses, clients look to cut costs. Hence LPO can only grow," says Smith.

SDD Global does high-end legal documentation work for 20th Century Fox, Universal Pictures, HBO, Calvin Klein and John Wiley.

SDD Global was set up by Smith Dornan Dehn, the New York-based legal firm that specialises in media and intellectual property. Russel Smith had come to Indian a few years ago to learn yoga from a guru in Mysore and struck roots there, eventually starting the LPO operations of his US firm in Mysore.

In comes Stratify, which has developed proprietary software, eDiscovery, which has automated document search and collection and tracks production of legal documents, a soft of product lifestyle management for law firms.

Stratify helps do away with many of the labour-intensive legal research processes and crashes time and effort needed to collect documents and communication relating to a particular case.

"We help reduce costs, errors and timelines," said Ramana Venkata, President and CEO, Stratify, funded by the VC arm of the CIA In-Q-Tel, Intel Capital and Mobius VC. It plans to invest $10 million over three years in organic growth and much more in inorganic growth.

"LPO is an example of a highly-specialised job being outsourced to India," says Ritvik Lukose, vice-president "" marketing and operations, Rainmaker, a training school for orienting lawyers for an LPO job.

The jobs being outsourced include litigation support, intellectual property, and legal research and drafting, he added.