According
to a NASSCOM-CRISIL study, India is a dominant player in the Global Legal
Process Outsourcing industry and is expected to continue its growth at an average
rate of 25%-30% annually. NASSCOM highlights that the Indian LPO sector has
engaged more than 18,000 professionals currently with annual revenue of USD 960
million and is expected to grow to USD 1.3 billion by 2015. The global market is expected to grow to $8.56 billion in
2020, from $1.39 billion at the end of 2013, according to estimates from Grand
View Research. The market is growing at over 25% on a consolidated annual
growth rate basis. The US is the dominant market for the legal process outsourcing
industry and Indian LPO players are seeing opportunities in Europe as financial
services firms and companies on the continent look to cut costs. "Europe
is opening up to legal process outsourcing and we see a lot of interest from
India-based LPOs. Within a year or two we will start to see definite momentum
in them setting up delivery locations on the continent," Andrew Burgess,
director at UK-based outsourcing advisory Source said in an interview to
Economic Times. "We have just seen demand from European banks which are
facing regulatory pressures. We already have one European bank as a customer,
another deal is just in closing and more deals are in the pipeline," Mohan
Ayyangar, chief operating officer of LPO firm Pangea3, told Economic Times.
Indian LPOs
have significantly moved up the value chain wherein initially legal research
assignments related to finding case laws, statutes, rules and regulations were
outsourced but more work is now being
outsourced related to preparing preliminary drafts of legal documents for use
in foreign courts. Further tasks such as contract management, patent drafting,
prior-art searches, due diligence and even litigation support, in the form of
document review, are also being outsourced to Indian LPOs. Most of the LPO work
done in India is outsourced by financial Services firms but other industry
segments are also looking to outsource legal work to India particularly MNCs
that operates in many countries need to maintain different legal documents and
requirements as per the local jurisdiction requirements. "We are seeing an increased demand from Europe from
global Fortune 500 companies that have operations in Europe and from the ones
that are headquartered there. It's a very important market for us and we are
expanding our existing operations," Pavan Vaish, global chief operating
officer for UnitedLex Corp told Economic Times.
Europe
presents a big challenge for Indian LPO players both in terms of Language and
legal systems. “LPO services
started in document review and the discovery space and the main pick up was
seen in common law countries. We will have to look at LPO in Europe differently
and look at more process-oriented services like intellectual properly,
compliance and contract management," Kunal Purohit, country head for
private equity-backed Integreon, told to Economic Times. Indian LPO is smaller
in size but gradually increasing its size and is expected to continue its
growth in the near future. Competition from countries
like Vietnam, China, Hungary, Czech Republic and the Philippines is increasing
but Indian companies will continue to dominate due to the quality of work and
talent Indian LPOs offer, rather than their lower costs.
