World yet to take up India's legal process outsourcing case

Although the offshoring of IT and low-end ITES/Business Process Outsourcing (BPO) services to India has been continuing in a big way for the last 15 years, the opportunity on offshoring of Legal Process Outsourcing (LPO) to India will not be as expected and the same will become more hype than reality!, says Evalueserve, global research and analytics service provider.

According to its latest report, only 1.2% of the legal and paralegal jobs would be offshored from the US to India by 2015 and this would constitute only 0.2% of the total revenue to be generated by the legal services industry in the US.

The revenues to be generated by the Indian companies providing such legal services will be approximately $56 million during July 2005-June 2006, $300 million during July 2010-June 2011, and $960 million during July 2015-June 2016 as compared to that of the legal industry in the US, which is likely to generate $270 billion in 2005 to $360 billion by 2010 and to $480 billion by 2015, the report pointed out.

According to report, as of December 2005 about 1,300 professionals in India are providing legal services to the US and this is expected to grow to 5,200 by 2010 and to 16,000 by 2015. However, during the same period, the legal services industry in the US is likely to expand from 9,75,000 legal and paralegal professionals in 2005 to 1.125 million professionals in 2010 and 1.3 million in 2015, the report said.

According to Alok Aggarwal, chairman and co-founder of Evalueserve, "Unlike many areas, such as IT, banking, finance and insurance services, whereas much as 10% to 12% of the services may be offshored to India by 2015, the corresponding number in legal services is only 1%. Because legal services may not be offshored to India in large amounts, it is quite likely that some of the Indian LPO providers may not survive beyond the next 2 to 3 years."

According to him, the main impediments for the offshoring of legal services to India include:

* The legal services industry is inherently averse to risk. This is particularly true about the corporate legal industry, where stakes are often very high, and hence, US lawyers feel more comfortable in outsourcing work to local law-firms

* Since the cost of client acquisition in the legal services is rather large, many law firms try to maximise the number of billing hours from each client;

* Sending work offshore also raises the risk of losing of confidentiality;

* Conflict of interest issues are very important for most law-firms and most legal services providers in the US are bound by ethics and guidelines that incorporate such issues;

* Currently, Indian law does not allow foreign law-firms to practice in India.