Sanjay Bhatia, member of the eight-month-old National Association of Legal Offshoring Companies, and head of operations of legal offshoring firm SDDB Global Solutions, Mysore, talks to HT.
Which cities have a large number of LPOs?
The highest concentration of offshore legal service firms is in the Delhi-Gurgaon region. I wouldn't say that Mumbai is a hub because the nature of the business is such that the work can be done just as effectively and efficiently anywhere in the country.
Where on the value chain is India? Where can it go from here?
Western firms are developing a higher comfort level with offshoring legal services. This will mean the work sent to India will be more complex. Every sector of the legal offshoring industry will grow dramatically, including lower-end services, such as document coding and legal transcription. Ultimately, however, the biggest impact, the long-term mother lode, will be higher-value services such as legal research and drafting - services that constitute the bulk of legal work now done in the West.
Will the current recession in the US hurt outsourcing to India?
The recession in the US will increase the need for large companies and law firms to cut costs, while the need for legal work will not be diminished in any way. Even with the strengthening rupee reducing margins, the volume of new and repeat business coming to India will keep profits up and the industry growing.
With the industry booming, will there soon be a skill shortage?
The boom in the industry will lead to a talent crunch. But as the public profile of the industry grows, an increasing number of law graduates and young lawyers will gravitate towards the industry. However, during the lag time, we think the competition for the best law graduates will be won mostly by high-end providers because higher-value work, such as the legal research and drafting, tends to be more interesting, with higher profit margins allowing for higher salaries.
How can the talent crunch be tackled?
One of the keys to success will be training because as providers move up the value chain and recruit more deeply into the pool of available talent, most new hires will be freshers with no experience working for Western clients.
What is the attrition level within the LPO industry?
Attrition has already reached our industry. Going by the sheer number of resumes, I suspect that the attrition rates are very high, with some companies facing rates as high as 70 per cent.