As the financial crisis bites, in-house counsel are increasingly turning to legal process outsourcers to cut costs and increase efficiency. Lesley Sutherland investigates
Earlier this month, Russell Smith, president of Mysore-based legal process outsourcer SDD Global Solutions, was on the phone handling a complicated negotiation with a film studio. “To my surprise, there were no lawyers on the other side,” says Smith. “The company simply could not afford them.”
It is perhaps ironic that at a time when the legal workload associated with the financial crisis is increasing in quantity and complexity, companies are being forced to rein in their spending on legal advice.
“There is probably an even greater need for legal services [now],” says Smith. “The problem is that companies can no longer afford to pay the high legal fees of Western law firms.”
In such cost-conscious times, the business proposition of legal process outsourcers (LPOs) is newly compelling. “There is a lot of legal support work that does not have to be billed to the client at US$200-300 per hour,” says Kunoor Chopra, president and CEO of LawScribe. “The same work can be done competently by LPOs for US$50 per hour.”
Not surprisingly, LPO service providers report a significant increase in work. “The LPO industry is witnessing a counter-cyclical spike in the demand as a result of the current economic situation,” says Teju Deshpande, vice president of client services at Mindcrest.
“Our clients are increasingly looking at ways to trim legal costs,” says Arihant Patni, CEO of Bodhi Global. As a result, “business has grown significantly in the past year”.
Mindcrest and Bodhi are not alone in experiencing a growth in demand.
Manisha Singh-Nair, a director at intellectual property outsourcer Clairvolex, has witnessed “a surge of interest in outsourcing among foreign entities”. Tariq Akbar, CEO of LegalEase Solutions, reports “a steady increase in volume as a direct result of the crisis”, while Chris Veator, executive vice president of CPA Global, says his company has seen “a significant increase in demand … predominantly from corporate legal departments”.