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December 10, 2007

Legal Process Outsourcing is a Hot Topic - Can Solos Benefit?

Photo_632_200512081_2 (UPDATE 12/10/07:  This little tidbit via Idealawg on LPO's

According to the American Bar Association Journal, there are about 100 LPO companies in India and the legal outsourcing industry there is estimated at $80 million per year. The industry is expected to reach $4 billion by 2015.)

Due to the ABA Journal Awards I discovered a blog called Legal Process Outsourcing and its author, the highly animated Rahul Jindal from Delhi, India who has been tracking the legal outsourcing phenomenon since 2005.  I asked him to guest post on this topic.  Regardless your interest in outsourcing specifically to India, Rahul discusses very important issues you would need to know before outsourcing your legal work to anyone.

Am I personally endorsing outsourcing to India in lieu of our many talented contract attorneys or law students?  No. However, I understand this is a burgeoning and competitive marketplace and we live in a capitalistic society. Therefore, all options need to be explored to see what is best for each and every individual practitioner. 

Guest Blogger:  Rahul Jindal - Legal Process Outsourcing

I have always held that Offshoring of legal work, when managed with adequate diligence and care, can be a godsend for solos/smaller firms. The ability to scale up without having to buy the mahogony future, indulge in firm politics, or getting your head grey is something that LPO should be able to offer to enterprising solos.

As you may have read over the past few years, India has become the destination for knowledge driven industries and call-centers. IT outsourcing was the first to pick up and there now exist behemoth Indian companies in that space. There is a grand range of activities getting outsourced, from call centers to animations, from payroll to architecture design. Somewhere in that spectrum lies the outsourcing of legal work. As has been repeated ad nauseam, two of the critical reasons that enable the Indians to serve low to medium complexity western legal work are the common law background of the country’s own legal system and that most Indians study in what are known as “English-medium” schools i.e. schools where the medium of instruction is English. And given the fact that the great Indian middle class lays an almost inordinate amount of stress on the importance of education, there are enough kids who are good. Add to it the fact that it is a country with a billion plus people, you have many very competent people. A joke about the competitiveness ingrained in Indians goes like, “In India, even if you are so gifted to be one in a million, there are more than a thousand people like you!” So all of these factors combine to make the phenomenon of legal outsourcing a reasonable success at the moment and outstanding success-to-be in the times to come.

And you can be a part of this success. Go offshore! No, I didn’t mean that you move to India yourself but rather that you think about having some people work for you and build your practice, helping you become increasingly competitive and profitable at the same time. If using offshore resources also enables you to scale up your own operations, why not?

That said it isn’t straightforward to embrace legal offshoring, at least not just yet. I keep a tab on the industry development and growth and my own research says there are more than 140 “LPOs”, all shapes and sizes, including some fly-by-night operators. Nascence and lack of regulation has led to the presence of some players and companies that no serious and mature industry will let survive. However, help is close by!

First, remember that trusting the vendor you ultimately choose is very important. If there is cynicism in your mind, the relationship will not succeed.

Choosing the vendor: For solos like you it is not always advisable to go after the big names. You won’t be the largest client for them and therefore not always high on their priority list. One big client and your work will be de-prioritized. Choose a mid-sized vendor, who has certain advantages that work in his favor, may be a non-metro location or may be attractive stock options for employees or whatever, such that he is able to provide you with quality resources and commitment to service. Make sure you meet the vendor before you start regular work with them. This may mean sitting in a coach seat for a trip half way round the world, but if the relation works out and grows, it will be worth the backache and the bad food!

Confidentiality: It is just natural to be worried about the confidentiality of the documents you send offshore. India and Indians are no better or worse when it comes to protecting the confidentiality of data, so take the same amount of caution as you would in your country. There are vendors who might be able to do the work cheap for you but let’s face it, there is no way for you to know or control a situation where your work is floating around to sub-contractors of the vendor who couldn’t care less for confidentiality. So don’t take this lightly and take utmost care to build confidentiality into the contract that you sign with the vendor with heavy penalties in the event of a violation.

Conduct pilots: Good looking websites, impressive management profiles, ISO standards for data security are great first level of filters in your due-diligence process. However, you must ensure that the vendor has people who can deliver according to, or close to, what you need. Conduct pilot projects with the vendor, paid pilots if you have to. Usually some research or draft that has already undergone your scrutiny and efforts can make for a good pilot.

Train your people: No one knows more about your style and nuances better than yourself, so the best teacher for people who work for you is you. Train the team who works for you on law, research and analysis, drafting, etc. Having said that, make sure your vendor respects the fact that you spent effort in training their people and that your intellectual property is not used beyond what you permit. Also, make sure you work with the vendor to help him retain the people you train.

Try and increase the skill of the people: Just as your coaching job does not stop at the initial training when you hire in your own country, having a resource offshore is no different. Conduct constant feedback sessions for the people who work for you. Such sessions don’t have to be elaborate: inline comments, regular teleconferences and occasional video-conferences, if both your vendor and you have access to, are enough. Start with low complexity work for your offshore resources and over time (few months or as applicable) increase the complexity of the work that you send offshore. For example, if you are a patent prosecution lawyer, start by asking the vendor to conduct searches, gradually moving the writing the more descriptive sections and over a longer period of time moving to claims drafting. Work with your vendor to draft a guidebook for your style. Conduct periodic tests for the people who work for you. They will value it.

Meet them: Agreed, physically seeing your vendor or his resources may not be often possible. But do it when it is possible, combine an Asian vacation with a day’s visit to your vendor’s premises. Speak to your team often. Form a relation; it matters a lot to Indian people if you ask about their family, interests and aspirations.

Form a group: You must realize that you will not be the largest client for your vendor, so you cannot always have very pressing deadlines and too much iteration beyond the original scope of work agreed. The simple lesson there is that, scope your work carefully and don’t leave it to the first draft to realize what all should have or should not have been done. Like it or not, in this world, might is right. Therefore, do form a loose association or a group of people in your profession who can pool together to have enough regular work for a couple of vendor’s people (or more, depending on your specific case), if you can. Having a predictable inflow of work is also good for your vendor and thus you (or your group) will always be an important client for him.

Legal Body Shopping: This isn’t a common form of practice in the LPO space and I am not aware of a prior use of this phrase, but do work with your client to see if it is possible to form an arrangement where the people who work for you can be trained at your location for sometime and then sent back to the vendor’s location but dedicated for your work for a committed period of time. This notion worked very well for IT companies and their western clients in the 90s. Move to Full-Time Employee (FTE) model when possible for you, it boosts productivity, reduces costs and helps increase the complexity of work that you can get done offshore.

Billing rates: You are in it for long and for value. As with any other relation, getting it to work to your benefit will take time and effort, so don’t nickel and dime about the rate too much. As the saying goes, if you pay only peanuts, you get only monkeys!

Be nice: Give references to the vendor, if you like them. Doing so will make the vendor always respect you, your work and your demands. Seeing friends benefit from LPO, a notion that you introduced to them, will only make you popular and respected! After you have become confident of the quality of the work product, share it with your clients and pass on the benefits to your clients. You are sure to gather a lot of goodwill doing so. However, make sure your vendor does not poach your clients, make the relation work to your benefit.

Do remember, persistence pays, so don’t give up because an experiment or two failed.
Make offshoring work for you. Welcome to India!


Rahul Jindal



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