The outsource trend: It's not just call centers in India anymore
A decade ago, it would have been unthinkable for major British companies to send their legal work overseas. But often, Indian lawyers can do the work at an eighth the cost.
But he doesn’t live anywhere near London – or Britain for that matter. Mr. Sood lives more than a few countries away in one of India’s high-rise satellite cities, Gurgaon, located on the edge of New Delhi. There he works for CPA Global, an outsourcing company.
A decade ago, it would have been unthinkable for important British firms to send their legal work overseas.
But CPA Global typically charges an eighth of what a British or American lawyer with similar experience and expertise might cost. So as law firms and in-house legal departments face growing pressure to cut costs following the global economic downturn, an increasing number are looking east to qualified professionals such as Mr. Sood.
ValueNotes, an Indian consulting group, estimates that India’s legal outsourcing revenues will grow from $440 million this year to more than $1.6 billion in 2014 – up from $146 million in 2006.
And the number of Indian firms offering legal services to overseas clients has swelled from 50 in 2005 to more than 140 today, it said.
Developments within India’s outsourcing industry have also made the country a more compelling destination for legal work.
Though most of the outsourcing in India is considered “low-value process outsourcing,” where special skills are not necessary (think: call centers), the fastest growth is in companies offering high-skilled work requiring specialized knowledge. Everything from medicine to engineering – to lawyers – is being outsourced to India now.
Western lawyers have, until recently, been skeptical about outsourcing work to India, deterred by concerns about confidentiality and quality control. But many of the firms that have experimented with small, low level jobs, are now commissioning ever larger volumes of work.
They are also beginning to entrust Indian lawyers with more complex jobs. Although relatively simple tasks like document review, research, and proofreading still comprise the bulk of legal outsourcing work, Indian lawyers – especially those trained in top American and European universities – are capable of a lot more, say Indian analysts.
Caroline Hunter-Yeats, a partner at the British law firm Simmons & Simmons, says concerns are easily allayed, “especially when the Simmons & Simmons India team are working off the same computer systems as the rest of the firm.”
Other reasons to be skeptical
Bavita Rai, a lawyer with the British firm Weightmans, has made several visits to India to explore outsourcing work to India. Though she acknowledges that widespread legal outsourcing to India is inevitable, her firm has yet to join the movement.
She, like other lawyers, points out that outsourcing legal work to India is not as simple as it sounds.
“It’s that element of the unknown – you can’t touch and feel the solution,” she says, adding that that makes it difficult for a lot of companies to turn to outsourcing, despite economic benefits.
Ms. Rai says she is also concerned that the kinds of jobs Indian lawyers are taking on for the West are the kinds of job trainee lawyers traditionally cut their teeth on. That, of course, echoes a wider fear overseas that India’s booming outsourcing industry is stealing jobs from Americans and Europeans.
But if it's cost effective, people's fears won't make much difference to US growth, say observers.
Bridging the divide
One way companies and law firms are finding a way to be confident of the quality of work being done overseas is by investing heavily in training and oversight – by retaining Western lawyers in outsourcing companies in India, for example.
Leah Cooper is one of those executives lured to India to bridge the Western-India divide.
She used to be the legal head of Rio Tinto, the mining giant, until she oversaw the move of a tranche of the company’s legal work to a team of lawyers based in India.
Earlier this year, she became CPA Global’s strategic director. “We’re on the cusp of something big,” she says.
“It’s a very obvious way to cut costs and it’s hard to refute once you’ve seen the good work that is being produced.”