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1st Legal Outsourcing Summit: Good Contracts Needed in Growing Industry

Posted Jan 22, 2008 2:30 PM CDT
By Martha Neil

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A first-time summit in New York City last week of Indian legal process outsourcing companies and their counsel shows how the industry—which could result in some $4 billion in foreign legal work being sent to India by 2015—is growing.

However, some issues in the fledgling industry remain unresolved, such as potential liability because of differing standards of practice in the U.S.—which provides much of this legal work—and in India, reports the New York Law Journal (sub. req.) in an article reprinted by New York Lawyer (reg. req.).

Good contracts detailing what is expected from an Indian LPO provider are critical to resolving such potential differences, although many of the companies that contract with Indian lawyers to do other countries' legal work now are based in Europe and insured in much the same manner as a U.S. firm would be, according to speaker Gregg Kirchhoeffer of Kirkland & Ellis and Robert Glennie, the managing director of NewGalexy, a British-based LPO that also has offices in India.

"With U.S. lawyers, you always have the rules of ethics," Kirchhoeffer says. "Going to a service provider offshore, you have to replace that gap-filler with contract." Some contracts, for instance, specify that computers used by Indian lawyers in LPO companies can only have limited Internet access, to prevent inadvertent disclosure of confidential documents.

One reason for the growing popularity of LPO companies among U.S.-based companies and law firms is their cost: an Indian lawyer may make $10,000 a year or less, according to the legal publication, although clients can be charged as much as $30 per hour for their services. Even the lowest-paid American lawyers, of course, make considerably more.

However, Indian lawyers are a better bet, because they are happy to have these jobs, says David Perla, co-founder of LPO Pangea3, which is based in New York by has 240 lawyers in three offices in Mumbai, India. By contrast, the lawyers who do such contract work through U.S. legal staffing agencies, he says, "are the ones who couldn't make it as real lawyers."

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ABAJournal.com: "Hollywood Outsourcing Higher-End Legal Work to India"

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