U.S. Credit Crisis Has Been Boon for India's Legal Process Outsourcing

Ann All

I've written a couple of times, most recently last week, about the ailing U.S. economy's impact on Indian outsourcing providers. Though some of them insist that America's economic troubles will benefit their business, the stock price of companies such as Wipro Technologies has dropped on concerns over cost cuts at some of their biggest customers, including U.S. financial institutions.


While it will take some time to determine whether BPO services will benefit from the down economy, as many contend, at least one outsourcing sector is gaining lots of business right now. As The Wall Street Journal reports, Indian legal processing outsourcing companies are being hired to help U.S. banks prepare for lawsuits filed by homeowners, investors and shareholders in the wake of the subprime-mortgage crisis.


For roughly the same amount of money they'd spend for paralegals in the United States, companies can have legal research performed by more experienced attorneys in India. While lower costs are attractive, they're not the only reason for sending legal tasks to India. Livemint.com quotes Anand Sharma, chief financial officer at Indian legal services provider Computer Patent Annuities Ltd (CPA):

In the short to medium term, there is rising litigation, the valuation of assets in the bailout package, bankruptcy, and it's coming from all sides. Forget about cost arbitrage, I don't think the U.S. is capable of handling this entire work.

While legal outsourcing only accounts for about $250 million of the $40 billion in annual revenues for India's outsourcing sector, according to the WSJ, it's expected to grow rapidly. The livemint.com story says the segment's annual revenues are expected to reach $640 million by 2011.


The numbers tell the story: a hiring increase of 400 percent this year at UnitedLex.; a 30 percent growth in revenues at CPA; and revenues that doubled in 2008's first quarter and then doubled again since then at Pangea3. Much of the work relates directly to the credit crisis. For instance, reviews of bank assets have increased by 50 percent in the past six months at UnitedLex.

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Add Comment      Leave a comment on this blog post
Dec 4, 2008 12:09 PM Meggan Meggan  says:
Great! and all of the sudden these guys will say: "ackshually sorry madam we have lost your data from your lawsuit itself only because some terrorist have come and basically meaning to say NOTIN can be done because our commandos are coming in public transport"I dont know why the world keeps looking to India as the solution of everything... make yourselves a question: will you outsource your processes, software, services to Iraq or Gaza? Moreover indians are simply cultural handicap and this ruin any business. Reply
Dec 4, 2008 12:48 PM Armen Armen  says:
What is going on with outsourcing? Somebody has really betrayed American public, First it was IT jobs with H1B visa holders now it is litigation and bankruptcy business. We just as well go to India for jobs. What a scam. Reply
Dec 4, 2008 1:17 PM yancat yancat  says:
This is ridiculous. We have outsourced ourselves into an economic meltdown and while homeland security is examining shoes at airport check-in we continue to outsource and in doing so leave ourselves increasingly open and vulnerable. where is the regulation and the ABA on this one/ Reply
Dec 5, 2008 2:41 PM Joe Joe  says:
Hey this is free market economics guys - work moves to where it can be done most efficiently - even if that means away from the US. This works both ways - when it was good for the US did you guys give a damn about anyone else ? The world has changed and the 'emerging markets' have well and truly emerged - wake up and smell the coffee ! Reply
Dec 28, 2008 11:57 AM rakesh rakesh  says:
hey you guys this is time of globalizationu need some competition, that's what makes u better Reply
Dec 28, 2010 9:44 AM Padmavathi Padmavathi  says:

Chicago Tribune has featured an article (at http://www.chicagotribune.com/business/ct-biz-1228-outlook-legal-20101228,0,7710253.story ) on how legal process outsourcing (LPO) is helping to reshape the legal world, as "alternatives to the traditional law firm are becoming increasingly attractive to buyers of sophisticated legal services in the post-financial-meltdown era." In the article, Indiana University Law Professor William Henderson, a specialist in legal workforce markets, is quoted as follows, regarding the offshore legal outsourcing trend in particular: "This is the beginning of a wave that's only going to get bigger in the years to come."



High-end legal outsourcing


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