India courts foreign legal
work By Priyanka Bhardwaj
NEW DELHI - Law is the latest business to
enjoy the economic benefits of outsourcing work to
India. In return, Indian outsourcing is getting
more upscale and profitable work.
Though
Indian lawyers cannot argue in US courts, Indian
businesses are looking to take on legal
back-office work from there, such as filing
patents that mix high technology and American law.
This latest outsourcing wave combines the utility
of
high-speed communication
link-ups with lower-wage, qualified
English-speaking lawyers who can save Western
firms hundreds of millions of dollars a year.
According to India's software body, the
National Association of Software and Service
Companies (NASSCOM), India has so far tapped only
2-3 % of an estimated $3-$4 billion US market of
"outsourceable" legal services. It is estimated
that by 2015 the legal profession in the US will
be valued in the range of $400 to $500 billion
with 0.5% being sent offshore. This translates
into $2-$3 billion business overall, of which
India hopes to garner half.
One firm
providing international legal services is
Evalueserve, located in the outsourcing suburb of
Gurgaon adjacent to New Delhi. Among the 120
people employed by the firm are doctors, engineers
and lawyers serving six-figure attorneys working
from wood-paneled Manhattan law offices.
Evalueserve has so far helped file 600 patents and
expects to employ more than 1,000 legal service
workers by 2010.
US clients can hire
Indian lawyers for US$100 an hour for tasks
costing $300-$400 in New York. While a paralegal
or assistant earns $6-8 per hour in India, a
similar job in the US costs the company $18 to $20
an hour.
However, wages are expected to
increase over the next three years, which will
narrow cost savings to 40% from the current 60%
and above. Even at existing levels Indian legal
officers offering international services earn
salaries comparable to young software engineers at
companies such as Nasdaq-listed Infosys, one of
the pioneers of India's white-collar boom. In
India, lawyers are considered lower down the
professional pecking order than in the US, and
only a few make big money.
According to
Ashish Gupta, chief operating officer of
Valueserve's India operations, the business of
legal outsourcing is booming and his firm has
benefited from getting in on the ground floor.
"Ultimately it is cost, quality and time,"
Gupta said. "It's the same service being provided
at a much lower cost, at probably the same level
of quality and sometimes in a much more efficient
manner. So that is what is driving this whole
thing and that's what will drive it in future as
well."
Philips, the Dutch electronics
giant, has quietly been hiring Indian PhDs to comb
scientific databases and file patents from
Bangalore. Kelley Drye & Warren LLP, a
169-year-old US law firm, is looking to outsource
electronic file searches to India. The firm has a
working relationship with a Mumbai-based
solicitors firm. Currently, junior lawyers in the
US perform the task of electronic recovery.
US-based Atlas Legal Research has also started
sourcing their manpower requirement to offshore
destinations such as India.
Sanjay
Kamlani, CEO of Pangea3, a legal outsourcing
pioneer in India, said due to a common history of
British occupation there are similarities in the
Indian and the US legal systems, making it easier
for Indians to understand the nuances of US law.
"Both US and India have been British
colonies and their law is grounded in British
common law," Kamlani said. "So the difference is
not vast at all. Apart from this, it is important
to realize that being a good lawyer is not about
knowing the law of a particular jurisdiction. It
is about knowing how to practice law. It is a
function and a practice and a good lawyer knows
how to do certain things. They know how to listen
to what a client wants, they know how to ask the
right questions, they know how to apply their mind
to those questions."
According to Deepika
Dayal Mathur, who has a PhD and works as a
research associate with Evalueserve's intellectual
property department, "Firms in India can assign
many people on the same project if the deadline is
short, a flexibility that counterparts in Western
economies could not manage because of huge
employee costs.
"We offer a combination of
technical and legal expertise. We have technical
domain people who are complemented by the legal
team. This is in addition to the cost advantage.
Since our company is growing and we have a very
large team here, we are able to handle all kinds
of projects. We can scale up the manpower
requirement very easily, which might not be
available in any set up abroad."
Evalueserve has seen business go up almost
100% on a year-on-year basis, and robust growth is
expected to continue. Overall legal service
revenue is expected to grow by 20-25 % a year.
Indeed, the case for India as a legal outsourcing
destination is quite bright.
Outsourcing
legal work is one of the latest attempts by
India's business and process outsourcing industry
to climb the value chain from low-end call center
jobs to higher knowledge-based work that comes
with more income and less competition from other
low-cost economies.
Currently, Indian
legal service firms are involved with intellectual
property work related to the technology industry
that spearheads India's $25 billion software and
back-office work exports. Observers say US law
firms spend about $20 billion a year in support
services, which most law firms could easily let
others implement. Even 10% of this is a big market
for a country such as India.
Among the
easier legal tasks is back-office work related to
publishing and research. Other services include
scanning, coding, drawings, form processing,
proofreading and financial services for legal
firms. It is thought that the bulk of such work
can be moved to offshore centers.
Some
industry experts say the only legal aspect that
cannot be outsourced is the physical presence of
arguing a case. At the macro level, it is
estimated that by 2010 India will capture 70% of
knowledge process outsourcing business, earning
more than $12 billion, of which legal services
will form an important portion. Estimates for
other outsourcing work, such as healthcare, have
been pegged at more than $20 billion by the year
2010 though competition from low-cost nations will
increase.
Priyanka Bhardwaj is a
New Delhi-based writer.
(Copyright
2005 Asia Times Online Ltd. All rights reserved.
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