Homegrown legal process outsourcing (LPO) providers have a new story to share. While the United States continues to dominate the $60 billion Indian IT-BPO exports, a substantial growth of the LPO market is being driven by other geographies too. The $440 million global legal outsourcing industry has experienced new business developments in regions such as Europe and Australia in the recent times. And to grab the opportunity, vendors like CPA Global, Pangea3 or Integreon are gearing up to serve these fast growing markets— which now contribute a significant amount to their revenues.
Of late, Pangea3, a Mumbai-based LPO tied up with an Australian law firm Advent Lawyers to set up its base in the region. Two months back, the company had also opened an office in London as part of a concerted expansion drive in Europe. It was reported that company’s expansion in Europe will allow it to increase revenues by 15% over the coming year. At present, Europe drives a significant 30% revenue for the company while Australia and Apac contribute 10%.
Sanjay Kamlani, co-CEO Pangea3, says, “Europe is a growth story in itself. The outsourcing view in the region is changing. Work like electronic discovery, commercial contracts, procurement agreements and other day to day work by general counsels is driving the growth.”
Questioned on the current European crisis, he further explains that though the budgets are contracting in the UK, it does not mean that the law firms are doing less work. There is a portion of non discretionary work which law firms always outsource. The company caters to many UK based companies like GE, Amex, Sony, and Kamlani feels that this business could extend to their European work as well.
Even Jui Narendran, head of ValueNotes Sourcing Practice feels that the UK law firms are looking to cut costs of maintaining their international networks, to be able to compete with the US law firms. Cutting costs and better utilisation of in-house lawyers by outsourcing low value tasks is a compelling reason for law firms to consider outsourcing/offshoring in their strategy,” she adds.
Simultaneously, directing towards the importance of other regions apart from the US, Leah Cooper, director—strategy and development for legal services outsourcing, CPA Global feels, “We see a lot of interest in the European market and Australia as well. Right now, growth is coming equally from the US and Europe.” The company gets 40% revenues from Europe and Australia clubbed.
Noting the potential of the non-US regions, Anand Sharma, CFO and head, management services at CPA Global comments, “In the last one year, RFP and enquiries from the European and Australian customers have increased to 40% as against 20% earlier.”
Sharma also feels that the US market is dominated by outsourcing the litigation work. On the other hand, Europe and Australia heavily outsource non litigation work like contract management and M&A due diligence.
Looking at history and analysing all the big contracts that impacted the LPO industry, UK has a major role. Last year, Rio Tinto, a leading international mining group based in the UK awarded a contract to CPA Global. Rio Tinto offshored contract review and drafting, legal research and document review to CPA Global.
Similarly, Integreon won a seven-year contract worth £50 million from UK based law firm Osborne Clarke. Integreon will provide knowledge and information management; technology and business intelligence services; transcription, secretarial, and word processing services to the law firm.
Thus, we foresee a higher growth rate in the European and APAC regions to outsource legal work, considering they joined the gang late. Not to forget, the United States has already been through the curve and other regions are now catching up even faster to overtake the same market opportunities.
Source:http://www.financialexpress.com/news/lpos-peep-beyond-the-us-market-for-growth/660605/0
