LPOs: Gaining from turmoil

Rohan Dalal, MD - India, at LPO firm Mindcrest, talks about his take on the LPO industry today and tomorrow
 
A recent study by Value Notes forecast revenues from offshoring legal services in India to reach $640 million by the end of 2010. Large figures considering that the first LPO firm, Mindcrest, was set up only in 2002. Todays stalwarts like KPO firms including Infosys, WNS and Copal Partners and most recently Intelenet have forayed in to the LPO space.

Set up with only 5 lawyers, LPO firm Mindcrest became the first company to offer outsourced legal services from India. Founded by attorneys and professionals, Mindcrest performs a variety of law related services for corporations and law firms, including Fortune 500 companies.

Headquartered in Chicago with offshore operations in Mumbai and Pune, Mindcrest provides legal support across enterprise viz, finance, HR, real estate, M&A, sales, procurement, manufacturing and legal. Frost & Sullivan awarded the 2007 Market Growth Strategy Award for LPO services to Mindcrest. The company has also been ranked in the top 5 LPO firms by the Black Book of Outsourcing.

Today the company has about 450 lawyers on board and plans to scale it up to 800 employees by 2009 in a phased manner. Rohan Dalal, MD - India, at Mindcrest spoke to BPO Watch on his take on the LPO industry today and tomorrow. Excerpts:

...On impact of the financial turmoil in the US on the LPO industry

The impact will surely be felt in the weeks and months to come. And as the events unfold, it is our opinion that clearly the financial crisis will have significant and far reaching legal consequences and therefore over the medium to long term period, the impact on the Indian LPO industry will be very positive.

This will be in the context of litigation support which will be a natural result of the shareholder lawsuits that will com up. Also supporting in bankruptcy proceedings and due diligence work on acquisitions will also benefit the industry. And these are the exact areas of work that Indian LPO firms currently provide to their clients and therefore those who can scale up to meet this demand stand to benefit.

...On the current trends of the LPO industry

The LPO industry, in itself, is quite a young entity. And the demand for LPO related work has seen an unprecedented growth specifically over the past two years, we are talking growth figures of over 40-50%. And this growth we will continue to witness. As the industry starts to mature credible players within the industry will start to develop certain niche areas. For example at Mindcrest we are very well positioned to actually have teams of lawyers within Mindcrest who work as extensions of law firms and legal departments of corporations.

The financial industry will continue to dominate as the major sector outsourcing work to LPO firms, but considering that law is something that is applied across the board other areas that are outsourcing include manufacturing companies, media and entertainment, technology companies and of course law firms through whom we do work for their clients.

...On the kind of work that is outsourced to Indian LPO firms

I’d like to step back and put into perspective of what exactly is an LPO. Today there are a lot of companies that are doing some database management work for law firms or law departments, or billing related work, or transcriptions work, or pattern support work -- none of this actually requires lawyers, but yet it is included in the LPO umbrella. When Mindcrest started out, the term LPO was not coined
 
But what we consider LPO industry comprises of is, pure play legal services providers, where the work clearly involves legal expertise and therefore is done by lawyers.

Within this pure play legal services outsourcing space, the work that is outsourced includes litigation support, review of supplier contracts, real-estate lease contracts, employee contract and the due diligence work involved in mergers and acquisitions. Another area of work that is outsourced is compliance related work, which involve not just compliance but putting certain legal administrative process in place. Another area is analytics which involves actually analyzing case laws, especially in an online context, to determine and maintain online content, legal databases. And lastly there is of course the research and drafting related work that is outsourced to LPO firms.

...On creating a balance between geographies because laws are different in different countries

A majority of the lawyers who work at Mindcrest come out of the Indian legal system and though as a company we do not purport to teach them US law, there are certain aspects that are similar in terms of the court system.

The US, UK and India follow the Common Law system and thus the principles of the legal system are pretty much the same though court structures and jurisdictions vary. LPO firms carry out extensive training for fresh recruits sensitizing them to specific skill sets in the laws and culture as well, because there is a vast difference in the ways legal jargon is used in different countries. For instance Indian legal writing tends to be more ornate as compared to the US which is more direct. Indian lawyers are pretty bright so we use that to our best benefit with a constant training and up gradation process. Also we have attorneys who have been trained in the UK or US system a and they act as mentors to our team here in India and help them understand certain nuances of the legal system of specific countries.

...On the challenges to LPO in India

Companies in this space need to be strong on two counts. Firstly they need to have strong and robust processes in place and continuously evolve their infrastructure to be able to attract, train and retain the right talent. For a lawyer who has come out of the conventional Indian bar practice, working with an LPO firm really widens his horizons and this needs to be put across in just that perspective.

Another major challenge is infrastructure, LPO firms work in a secure environment and confidentiality needs to be maintained. So building all that and then the ability to scale up is a challenge. There also is a great need for a strong business development in the target markets and companies who have a global presence can benefit best.

...On security concerns in legal process outsourcing

There are two aspects to security -- data security and physical security. Mindcrest has instituted very strict data and physical security plans and procedures to satisfy the requirements of their clients and to comply with data protection and privacy laws. We are also in the process of being certified by ISO 270001, which is the information security standard worldwide. We ensure a completely segregated networks even within the organization, no removable drives are available, our employees cannot save data on their desktops and everything is saved directly on the servers.

Also we have technology support to ensure the highest level of confidentiality. There are areas within our offices that have biometrics access only and only authorized personal have access to that area.