Are You Ready To Be Part Of The LPO Industry?

Could downfall of the US economy be an upswing for the Indian LPO Industry? This is the question that's in everybody mind. With the failure of the financial machinery last quarter, the US is facing its worst ever financial crises. Cost pressure is increasing and companies are exploring newer ways to achieve cost efficiencies such as outsourcing and offshoring. Reducing the cost of lawyers and litigation involved in business is the top priority for the CEOs.

In the US, cost of managing an in-house legal process can soar up to US $12 million for a large firm. Law firms in US charge US $150 to US $ 200 an hour for single document review as compared to US $ 21 in India. Further, a research project in US can cost up to US $ 250 to US $ 400 per hour as compared to US $ 60 per hour in India.

Also, there is an emerging gap of demand and supply between the growing legal work in the US and the available resources. The addressable demand of legal work is expected to grow up to US $ 3 billion. However, the current scenario suggests that the US is not only confined with the cost problem but also lacks in-house expertise in the form of skilled labor and other resources to deal with the growing demand. Some other drivers of outsourcing are the increasing number of bankruptcies and mergers and acquisitions taking place during the recession. This coupled with higher cost differentials available offshore and the pursuit of efficiency has fueled outsourcing, even in today's time.

This slowdown in the US has indeed come as a boom for the LPO industry in India. This industry is already growing at a rate of 40% and is expected to receive more business than other existing offshoring businesses like BPO and KPO. The current estimated market size of LPO is about US $ 550 million and this industry is expected to grow up to US $1.5 billion by 2010. Companies that handle support functions such as reviewing documents and researching witnesses for the US litigation purposes, have seen the biggest increases in the times of mortgage and related markets meltdown. How good is this for the LPO industry? It can be understood by the comment of Sanjay Kamlani, CEO of Pangea3 who says that their business has increased up to 100% of what it was a year back. The company has specifically launched a new product called TARP services unit and mortgage notification program catering to several needs of its overseas clients. Another company expert, Mr Pravin Dalal of Perry4Law said that his company has seen an increase in requests on LPO assignments at the moment as compared time before recession. Rohan Dalal, MD of Mindcrest is expecting his headcount to be doubled in the months ahead. Other LPOs are aggressively launching new products and training their manpower to offer the customized solutions in this downturn scenario.

Clearly, these turbulent times have opened doors of opportunities for prospective entrepreneurs, lawyers, and present companies to enter, consolidate, and grow their business in the LPO sector. Lot of BPOs, IT companies and law firms are exploring ways to expand in the LPO industry and are looking for Consultants who can advise them with the right strategies to make the move. Before they set up their businesses, they must understand the numerous challenges involved. They could be related to the kind of infrastructure, managing risks, confidentiality and security, cultural and communication barriers, manpower, training, marketing and sales, client need analysis and many more.

Collaboration with KPO Consultants can be a sensible business initiative and would help you taking the right direction. It is the top consulting company in India helping clients setting up ventures in the LPO space.

The author - Dhiraj Phukan - is the Research Analyst at KPO Consultatns. To learn more about LPO, Legal Offshoring, Legal Process Outsourcing and more - visit www.kpoconsultants.com