India rides on outsourcing boom
New Delhi - India's growing pool of lawyers are being tapped to provide paralegal services for customers from the United States as the next frontier in the country's booming outsourcing sector, executives say.
Companies in India are offering trained lawyers using legal databases such as Westlaw and Lexis/Nexis to provide law firms in the United States with low-cost research, writing and analysis in a move to capture a market worth billions of dollars.
"We did a survey of corporate houses in the US in which 86% identified the high cost of legal services as their number one cost worry," said Sanjay Kamlani, co-founder of the legal outsourcing firm Pangea3 LLC.
"Add to that there are one million lawyers in India and 70 000 graduating from law schools every year. We realised that we had an enormous, enormous business opportunity," he said.
The National Association of Software and Service Companies, an Indian lobby group, said in July that outsourcing firms had barely scratched the potential of the estimated $250bn legal services market. It estimates Indian firms now get 60 to $80m worth of outsourced legal business annually.
India earned $6.7bn in the year ended March 2005 in outsourcing services such as software and call centres in an industry that employs almost 350 000 people as the country taps a large pool of English-speaking professionals.
The work has expanded in the past five years into almost all fields from computer-aided design to medical consulting and fashion to provide jobs for a one-billion plus population, more than half of whom are under 25 years old.
Much of the advantage is based on labour costs, with Indian firms reportedly paying legal researchers about $12 000 a year, or a third of their US counterparts.
Firms such as IndiaLegal.net advertise as a legal research centre for attorneys, law firms and companies.
"We are not a law firm though our team comprises of lawyers," the company says on its website. "We do not provide any legal advice or render any legal opinion. Our purpose is to aid and supplement your work."
Abhay Dhir, president of India's Atlas Legal Research, said business had tripled in the past two years as US companies found "they can get the same level of quality at a much, much lower price."
Initially, only US law firms were getting work done out of India, but now US corporates are queuing to outsource directly, he added.
Research firm Forrester Inc. has estimated that at least 12 000 legal jobs had been outsourced from the United States to offshore locations up to 2004.
The number of outsourced jobs to low-cost countries such as India will grow to 35 000 by 2010 and will reach 79 000 by 2015, Forrester predicted.
Pangea3's Kamlani said that unlike a call centre operation, the employees in legal outsourcing firms do not work night shifts, which helps to attract talent.