Thursday, July 05, 2007

Outsourcing of legal services to boom


While the men in black coats are preferring to stay away from courts, opting for white-collar corporate jobs instead, another kind of job opportunity is now opening up for them. And this time in the sunrise ITES sector in the legal service outsourcing segment. (LPO).

A report just released says the niche legal services offshoring market which grew at 50% between 2005-06 is now poised for bigger growth. What is a $146 million market today, is expected to become a $640 million by 2010-end. Of course, simultaneously, the number of jobs too will move north. While 7,500 people are employed in the LPO sector now, in the next three years their numbers will grow to 32,000.

The study published by Pune-based research firm ValueNotes, says growth has primarily been due to an increase in demand, vendor maturity and the capability of vendors to offer higher value services. In fact, at the moment there are around 100 LPO service providers in India.

The study categorises them into three broad groups viz: captive centres, third party niche service providers and third party multiservice providers. Most of jobs are concentrated with the third party vendors that dominate the LPO space. However, vendors with niche focus and multi-service providers differ distinctly in terms of service offerings and capability.

Over the last two years, the legal services offshoring space has witnessed a rapid change in terms of vendor capabilities and service offerings. While there are around 12 players that employ more than 100 employees, a large number of small players operating from smaller cities too have emerged.

As Arun Jethmalani, CEO, ValueNotes explains, "Most vendors start by offering lower value services and gradually move up the value chain by demonstrating domain skills and gaining client confidence. While others focus on specific high-end services or niches. The fast growing opportunities has led to a mushrooming of new vendors, all across the country."

Jethmalani expects growth in both high value services like IP, legal research, contracts, etc, as well as in high-volume, low-value services. While Neeraja Kandala, analyst and co-author of the report, feels "High volume services like document review, eDiscovery, legal publishing and niche areas in Intellectual Property and contract services will drive future growth in this space." But irrespective of what drives the market, Indian lawyers will certainly have a lot to smile about in the future.