Legal outsourcing can rise up to US$4bn by 2015

Outsourcing is gradually becoming the backbone of Indian service sectors. In the last fiscal India earned US$6.7bn by providing services in software, technology and manufacturing outsourcing.

Legal services are the next destination for a "cool" BPO. According to a study by the US based Forester Research, the current annual value of legal outsourcing which is worth US$80mn can rise up to US$4bn and can fetch 79,000 jobs in India by 2015.
The report says, "The benefit of the outsourcing companies in the US would translate into a cost saving of about 10-12 per cent. The potential of the Indian resources to absorb the increasing demand in legal outsourcing is because India enjoys the economic advantages of the wage difference and less perks and overheads."

National Association of Software and Service Companies (NASSCOM) also projected that legal processing outsourcing providers (LPOs) in India will soon rise up to US$3bn.

As associate lawyers in the US carry a price tag ranging from $225 to $450 per hour, India is a natural fit and already five of the 20-odd Indian KPO companies have established themselves and are tapping on skilled legal professionals to handle the outsourced work.

Indian firms enjoy much bigger margins as they bill their clients even 5-10 times more than BPO firms. Like BPO, India enjoys vast skilled manpower and this has given us the lead in KPO much ahead of Philippines and Sri Lanka.

But this glossy figure has many challenges ahead. The most important challenge to the newly-born sector is the need for Indian lawyers to pass us bar exams, conflict of interest rules and data security.