India: Is Legal Process Outsourcing Right for Your Company?

Last Updated: 26 March 2010
Article by Sonia Baldia and Daniel A. Masur

Originally published 12 February 2010

Keywords: LPO, quality of service, QoS, US Census Bureau, domestic legal services, LPO agreements

Many corporate legal departments and law firms in the United States are experimenting with legal process outsourcing (LPO) as a means of reducing costs and increasing efficiencies while maintaining acceptable quality of service (QoS). The momentum behind the current popularity of LPO is, in part, a reaction to steadily increasing US legal costs and to the negative economic impact of our faltering global economy.

Global LPO growth potential may directly correlate with the overall size and projected growth of the legal services market in the United States.  According to the US Census Bureau, our domestic legal services industry generated US $236 billion in revenue in 2006 and is expected to grow steadily at a rate of more than six percent per year for the next decade. This sizeable market offers a highly lucrative environment for LPO to take hold.

To meet the growing demand for LPO, innumerable providers have entered the marketplace, offering alternative service and promoting a distinct trend toward the outsourcing of certain legal tasks and procedures.  As a result, the LPO model that, only a few years ago, was viewed with substantial skepticism and that raised questions of its own legality is now widely perceived as a feasible alternative means of addressing companies' legal needs. 

That said, the framework required to properly regulate the LPO industry and to address the legal and ethical issues it is sure to raise is in a nascent — but rapidly evolving — stage. The US legal community has yet to take a definitive stance toward the viability of the LPO model. But the LPO industry appears eager to embrace some form of self regulation as a means of fully establishing itself.

In the context of an LPO initiative, a client company selectively delegates certain legal functions and services that are traditionally performed in the United States to an LPO provider based in an offshore location such as India. The provider offers the client a skilled or trainable workforce at costs that are significantly lower than those demanded by US counterparts.  The basic value proposition of the LPO, then, holds that outsourced legal work will be performed offshore by trained, qualified and locally licensed lawyers and paralegal staff at a fraction of the cost of having the same work performed by US-based legal professionals. 

Services subject to LPO agreements can range from tasks such as legal coding and legal transcription to more involved projects involving legal research, litigation support, document review, contract drafting and management, legal publishing and intellectual property-related services such as patent application preparation. In addition to significant cost considerations, LPO arrangements may also enhance home-base productivity by freeing a client legal department or law firm to focus on strategic, value-adding legal work and to take advantage of time zone differences in offshore locations, thus enabling 24x7 operations.

The ability of an LPO arrangement to provide real benefit to a client company depends substantially on two central factors: (1) a sober assessment of the client's legal needs and requirements; and (2) a realistic determination of whether the relevant legal services and tasks can be outsourced without sacrificing important qualitative considerations. Quality degradation, after all, will inevitably be counterproductive, resulting in the added cost of home-base "re-do" and elevating client risk. 

A comprehensive and meticulously performed initial assessment of the pros and cons of LPO — basically, a diligent LPO "gating analysis" — will do much to determine if and under what conditions a company may successfully deploy the LPO model to meet its legal needs consistent with its overall strategic business goals and objectives. Some of the fundamental questions that should be addressed in the course of a thoughtful LPO gating analysis include:

  • What are the legal needs, services and requirements that may be suitable for an LPO?
  • What — if any — dependencies will make a complete handoff of the legal tasks and services unfeasible or impossible?
  • Are the services needed on a recurring basis (e.g., patent application preparation), a non-recurring basis (e.g., unique litigation involving facts peculiar to a large contract) or an intermittently recurring basis (e.g., periodic product liability claims or certain due diligence tasks associated with transactions or filings)?
  • Do the services at issue relate to core or non-core business functionalities?
  • Does the customer assume additional risk related to the source of need for the legal services by engaging in an LPO? If so, how much risk is generated, and is it acceptable?
  • How important is cost savings vis-à-vis QoS? How do the prospective outsourced services support or fit with the client's overall strategic business goals and objectives?

As part of the LPO gating analysis, potential LPO clients must carefully assess the generally applicable risks, ramifications and ethical concerns that are inherent in offshoring legal work and that accompany — and may outweigh — the benefits of LPO.  Some key risks and ethical considerations peculiar to an LPO arrangement include:

  • risk of unauthorized disclosure of confidential information;
  • liability concerns related to the unauthorized practice of law;
  • unintended or inadvertent waiver of the attorney-client privilege, including assessment of if and when the privilege will apply;
  • possible lack of robust procedures to identify and resolve conflicts of interest;
  • recognition, when applicable, of the need for client consent;
  • fee-sharing arrangements and client disclosure; and
  • compliance with export control laws with respect to offshoring information regarding US-originated inventions for patent drafting services.

Most LPO demand in the United States currently involves low-value, labor-intensive legal services, such as legal transcription, document conversion, legal coding and indexing and legal data entry. For the most part, these services are supplied by India-based LPO providers. As the LPO industry matures, however, the nature of outsourced legal work is expected to ascend the value chain.

Researchers at ValueNotes, for example, estimate that in 2006, India's LPO industry generated US $146 million in revenue. They project industry revenue to grow to US $640 million by 2010, at which time LPO firms in India are expected to employ over 32,000 India-based professionals. Another research company, Evalueserve, is more conservative in its LPO projections; but the fact that LPO is likely to become a sizable mainstay in the US legal services market is increasingly difficult to question.

India's emerging prominence in LPO is not surprising, given the nation's remarkable success as a global supplier of information technology outsourcing (ITO) and business process outsourcing (BPO).  More recently, many US companies have engaged in what are known as knowledge process outsourcing (KPO) transactions, which leverage India's vast pool of highly skilled, well-educated workers to perform knowledge-driven or "high end" processes that require specialized domain expertise. Legal process outsourcing is actually a specialized form of KPO.

Its enormous reservoir of well-qualified, English-speaking lawyers and paralegals helps to explain why India is a strikingly successful source of LPO. From a cost — as well as a quality — perspective, Indian legal professionals are extremely competitive. Typically, for example, they command salaries that are 80 percent to 90 percent less than those of their US counterparts. And India's professional labor pool shows no sign of shrinking. Approximately 80,000 new Indian lawyers graduate each year from law schools. These graduates are particularly well-suited to service US-based legal needs because, like the United States and the United Kingdom, India's legal system follows the common law model. The nation's rapidly modernizing legal and regulatory environment, too, is based on the US/UK model of jurisprudence.

Currently, LPO demand in India is primarily met by two service delivery models. These models include captive centers operated by US corporations and law firms (such as those established by GE, Cisco, Oracle, DuPont and Bickel & Brewer); and third-party LPO firms that provide legal services to US corporations and law firms (for example, niche firms such as Pangea3, Qusilex, and Lexadigm that only provide legal services, and multi-service firms such as Infosys and WNS that provide legal services in addition to other BPO offerings). Variations of these models will emerge as the Indian LPO industry matures and evolves to better service its customers.

Each of the two LPO models has specific advantages and risks that must be evaluated relative to a particular LPO strategy.  LPO customers should be prepared to adopt different delivery models, taking into account numerous variables such as the nature and scope of the activities to be offshored; previous offshoring experience; a qualitative due-diligence review of potential providers' work; issues regarding security and control of confidential or privileged information; risk tolerance; and tax considerations and budgetary constraints.

Clearly, LPO can present a viable alternative to companies seeking to reduce their legal costs. Successful LPO implementation, however, demands thorough consideration and careful accounting of the engagement's circumstances and needs.  A company considering an LPO must objectively evaluate the potential initiative's unique gating issues, especially those relating to its specific value proposition, the generally applicable risks of any LPO, the offshore location and the provider involved, and the type of LPO model best suited to the customer's needs.

Learn more about our Asia offices and Business & Technology Sourcing practice.

Copyright 2010. JSM, Mayer Brown International LLP and/or Mayer Brown LLP. All rights reserved. Mayer Brown is a global legal services organization comprising legal practices that are separate entities ("Mayer Brown Practices"). The Mayer Brown Practices are: JSM, a Hong Kong partnership, and its associated entities in Asia; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; and Mayer Brown LLP, a limited liability partnership established in the United States. The Mayer Brown Practices are known as Mayer Brown JSM in Asia.

This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions