Law Without Borders

"Outsourcing Gaining Standing in Legal Profession": Chicago Tribune Weighs in on Legal Outsourcing "Wave" that is "Only Going to Get Bigger"

Today's Chicago Tribune features an article on how legal process outsourcing (LPO) is helping to reshape the legal world, as "alternatives to the traditional law firm are becoming increasingly attractive to buyers of sophisticated legal services in the post-financial-meltdown era." In the article, Indiana University Law Professor William Henderson, a specialist in legal workforce markets, is quoted as follows, regarding the offshore legal outsourcing trend in particular: "This is the beginning of a wave that's only going to get bigger in the years to come."

As evidence of how legal outsourcing of different kinds is shifting the legal landscape, the Tribune cites two important and recent mergers in the legal industry:

Two recent mergers in the legal industry speak volumes about the forces reshaping the business of law at its highest levels. What's also notable is that neither deal involved large law firms.

Thomson Reuters, a media and information-services company, acquired Pangea3, a legal-process outsourcing firm with most of its lawyers in India, in November. A month earlier, Axiom Global Inc., which provides lawyers-for-hire to big corporations, bought another legal staffing company, Chicago-based LawyerLink LLC.

The deals are not large; Axiom and LawyerLink didn't even bother issuing press releases. Yet the transactions reflect how alternatives to the traditional law firm are becoming increasingly attractive to buyers of sophisticated legal services in the post-financial-meltdown era.

The heads of corporate legal departments like the competition because it drives down their costs as their bosses continue to pressure them to cut spending. And the biggest expense is money spent on outside legal counsel. The nation's 100 largest law firms had combined revenue of $64.8 billion in 2009, according to American Lawyer magazine.

As 2010 comes to a close, experts predict little to no growth in total revenue from a year ago for the largest law firms, also known as Big Law. Despite the lack of growth, lawyers breathed a sigh of relief. Few industries suffered more from the financial meltdown than Big Law, as firms significantly downsized in 2009.

Work force restructuring continued in 2010 despite an improving economy, though not as many lawyers appear to have been laid off this year compared with 2009, when firms of all sizes shed more than 4,600.

New regulations in health care and financial services will keep legions of lawyers busy next year. But busy will not necessarily mean greater law firm revenues because of unrelenting pressure from clients to do more with less.

"Sophisticated general counsels are trying to stretch their legal budgets," said William Henderson, a law professor at Indiana University, who specializes in legal labor markets. "That's what is leading to the shakeout."

LawyerLink, Pangea3 and other alternatives to law firms have been around for several years, but their business models have gained momentum since the recession because they have found ways to cut costs out of basic legal tasks.

Interestingly, the Tribune reports that "companies such as Goldman Sachs and Accenture have been receptive" to using outsourced legal services at Axiom "because Axiom lawyers charge about $200 an hour, about half the average rate of associates at the largest firms outside New York." By contrast, "lawyers in India charge $25 to $35 an hour for routine corporate work such as drafting contracts and complying with regulations." The article addresses the misperception that legal outsourcing to India and elsewhere inevitably means a compromise in the quality of the work, noting that the Thomson Reuters acquisition of India-based legal process outsourcing company Pangea3 "appears to at least validate the business model":

There is still the widely held belief among law firm partners and general counsels that outsourcers don't offer the same quality of work as law firms, Henderson said. The perception, right or wrong, has prevented outsourcing from becoming embraced in the legal industry. Only about 1 percent of the money spent on lawyers in the United States goes to outsourcers, according to various estimates.

But Thomson Reuters' acquisition of Pangea3, based in New York and Mumbai, appears to at least validate the business model....

In announcing the deal, Thomson Reuters, which owns West, a legal publisher, said outsourcing will be key to helping law firms and their clients be more "responsive and cost-effective."

Henderson agrees: "This is the beginning of a wave that's only going to get bigger in the years to come."

The Debate Continues Over U.S. Freelance Contract Attorneys vs. Offshore Legal Outsourcing

We know from experience that countless U.S. law firms and solo attorneys continue to benefit from legal outsourcing to India. This has confirmed the wisdom of the American Bar Association's Formal Ethics Opinion 08-451, in which the ABA Ethics Committee found that legal outsourcing is "a salutary trend in a global economy" -- a practice that "can reduce client costs and enable small firms to provide labor intensive services" that they otherwise might not be able to manage. No wonder the LPO industry is booming, and not just because of corporate clients.

But in a blog post last May, we noted that many freelance contract attorneys in the U.S. have taken issue with this. In particular, freelance lawyer Lisa Solomon, a respected blogger with Research and Legal Writing Pro, pointed in part to a couple of Indian legal outsourcing providers that apparently are guilty of atrocious spelling, grammatical, and more serious errors. Now Lisa, we would like to return the favor!

The managing attorney at a successful Arizona business law firm recently turned to offshore legal offshoring, precisely out of exasperation with his experience in trying to make use of U.S. freelance contract attorneys. This is from one of his emails:

The first project I'm sending along is a Response to a Partial Motion to Dismiss. The Complaint was drafted by an ex-contract attorney, and filed while I was in trial. There are not many documents or issues involved, and the client received a Cause Determination from the EEOC, so the Complaint should have been a cake walk. Instead, the Complaint is a piece of crap. Of course, I allowed it to be filed, and therefore have only myself to blame. I mention all of this in the hopes that you will understand how eager I am to find a source of consistent, high quality work that does not eat-up all of our profits (and then leave as soon as soon as an offer comes along that includes box seats at Suns games).

And here is part of another email this law firm client sent after switching to Indian LPO services instead:

I would be happy to give a testimonial providing a comparison to U.S. contract attorneys who seem incapable of turning in coherent work product, on time, and without doubling the number of hours it should have taken. And don't get me started on full-time salaried associates.

And below is what this managing attorney said to one of his firm's clients:

The company I told you about is SDD Global Solutions. I've used dozens of contract and full-time attorneys here in the U.S., and thus far, SDD Global is doing a far superior job at drafting high level motions and pleadings for me in federal court.

But don't get us wrong. It would be an obvious mistake to conclude that all freelance contract attorneys in the U.S. are incompetent, or lacking in sufficient ambition to serve their clients. That would be just as silly as concluding that because there are some incompetent Indian LPO companies, the entire offshore legal outsourcing industry is therefore suspect.

Having said all that, some harsh economic facts seem to belie the suggestion that U.S. freelance contract attorneys are providing serious competition to offshore LPO providers. Dean David Van Zandt of Northwestern University School of Law estimates that given student loan obligations, living expenses, etc., $65,000 per year is the break-even point that U.S. law graduates must earn just to stay afloat. The mavens at Above The Law say that "[a] break-even point of $65K seems low to us, given high law school tuition, the borrowing costs associated with student loans, and the opportunity cost of going to law school when you could be earning a salary in some other industry." They point out that "[a]nother academic, Herwig Schlunk of Vanderbilt Law, believes that the break-even point is much higher." But even if Dean Van Zandt's "low" $65k figure is accurate, the fact remains that super-smart, ambitious, enthusiastic, Indian lawyers from even the finest law schools, and highly trained in U.S. legal research and legal drafting, are justifiably happy to work for one-fifth of that amount, considering the lower cost of living in India, among other factors.

Perhaps that's why this month's Business Today magazine, in yet another major media story on the growing LPO phenomenon, reports that the average hourly rate charged by U.S. freelance attorneys is $50-100, contrasted with an average of $25-40 for Indian legal outsourcing attorneys.

Given all of the above, it seems that what we said in last May's blog post could bear repeating:

Some clients of our law firm's Indian company have chosen our India team over U.S. contract lawyers because, according to the clients, the contract lawyers they tried were (a) not consistently available to do the work, (b) required training by the clients, (c) delivered a work product that required extensive revision, and (d) usually, but not always, charged higher fees. As the LPO critics have pointed out, it also is easy to find examples of unsatisfactory legal services companies in India, so we're certainly not saying Indian providers are always better, or even always less expensive. But when they are better, or just as qualified, and when they are less expensive, they are going to be hired.

For the sake of U.S. freelance attorneys, we hope their argument does not boil down to a plea to simply “Buy American,” even if the result is more expensive and not any higher in quality. Corporations, law firms, and solo attorneys are increasingly unwilling to do that, just as U.S. consumers are not going to stop shopping at WalMart (where most of the products are from China), or stop buying foreign-made clothes, etc.  And if anyone wants to appeal to compassion for the human suffering caused by unemployment and poverty, then suggesting a boycott of the people of India may not be the most logical or effective means. A better strategy for U.S. contract lawyers to promote their services might be to find ways to compete with the Indian providers regarding all of the above-mentioned attributes that clients want.

"THE WORLD IS FLAT AND THE SUN NEVER SETS" -- Legal Tech Expert Seth G. Rowland Praises and Attacks Offshore Legal Outsourcing

In an influential article on the popular TechnoLawyer blog -- an article so influential that it already has led several law firms to hire at least one off-shore legal outsourcing company -- legal technology guru Seth G. Rowland pays many respects to LPO, while at the same time warning that it threatens the entire Western legal world as we know it. Rowland is here to praise legal process outsourcing, and also to bury it. Below is an excerpt from the TechnoLawyer synopsis:

How would you like a Tim Ferriss-style four hour work week? Impossible you say? Not with legal process outsourcing. Just send that multi-state research memo to India and your eDiscovery review to the Philippines. Why hire overpriced American associates when you can outsource to cheap, English-speaking lawyers overseas? Although tempting, legalprocess outsourcing has a dark side that threatens the American legal industry. In this TechnoFeature, document and workflow automation expert and technology consultant Seth Rowland identifies the major LPO players, explains what they offer, and then lays out an alternative strategy that American law firms can employ to reduce costs and compete globally while avoiding the fate of American manufacturing companies that outsourced themselves into extinction.

But before we cross over to the "dark side," here's some of the good stuff:

Every revolution has its tipping point. The tipping point for legal process outsourcing (LPO) may have occurred two weeks ago when Thomson Reuters acquired LPO powerhouse Pangea3....

Lawyers have finally begun to realize that our legal system is undergoing a transformation. Once a regional business managed by local and state bar associations, the practice of law has officially become internationalized. Thousands of lawyers in Mumbai as well as Australia, China, South Korea, New Zealand, Sri Lanka, Israel, and the Philippines are busy drafting legal briefs, abstracting leases, coding documents, summarizing depositions, and conducting due diligence. They are working under the supervision of American lawyers, for American law firms and corporations, on matters of American law.

This revolution is made possible by advancements in computer technology and telecommunications that allow a virtual world-wide presence for the practice of law. Documents, data, and images can be stored in the cloud, accessible securely to users around the world. Thanks to LexisNexis and Westlaw, anyone anywhere can conduct legal research. With the emergence of VoIP telephone service, Web conference services such as GoToMeeting and WebEx and Cisco's TelePresence, virtual teams can work together at practically no cost. Using a virtual PBX system like 8x8 with a "SoftPhone," you can dial extension 10 for Mumbai, and extension 11 for New York.

This revolution is also made possible by cultural advancements. The globalization of "English" as a universal language for the conduct of business has resulted in more people speaking English as a second language than speak it as a first language, according to Thomas Friedman in his book, "The World is Flat: A Brief History of the Twenty-First Century." Former British and American colonies like India, South Africa, New Zealand and the Philippines also share a "common law" legal system. With a median salary of $20,000 per year for an Indian lawyer [Rowland must be talking only about the largely irrelevant elite of the elites, because law is generally not considered a high-paying profession in India, and most Indian lawyers fresh out of law school earn from $120 per year -- that is no typo -- to $2,000 per year, and $12,000 is considered to be a decent annual paycheck even for newly-minted graduates of top law schools], the services of a highly trained lawyer can now be offered for a fraction of the cost of an inexperienced American paralegal. Moreover, the time difference (10 hours between New York and Mumbai), is such that assignments given at the close of business in New York, arrive early morning in Mumbai and often can be completed by the time the assigning lawyer in New York gets back to the office.

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With the addition of American management techniques and American-trained attorneys into the LPO workflow, as well as special education programs in Indian Universities, the quality and consistency of these services has improved in recent years. The price is right, and the quality is good. LPO gives you a 24x7 flexible workforce that enables you to replace your "fixed staffing costs" with "discounted variable staffing."

So far, so good. So what's the problem? Without offering any evidence, Rowland assumes that this is all a zero-sum game, in which the success of offshore legal outsourcing must inevitably be a threat to Western law firms. At the same time, he offers more praise for LPOs, to the point of arguing that Western law firms need to learn from the offshore companies in order to survive:

Our legal system is being given a wake-up call. The pressure of the market is forcing the "profession" of law to recognize what Ed Poll calls "The Business of Law." Law firms are under pressure to act like businesses. That means cutting costs and making charges more predictable. The sky has not fallen yet. We still is time to save the American legal industry. The same business process modeling used by LPO firms when combined with the appropriate technology can transform our law firms into sleek efficient, productive, innovative and highly profitable companies that serve as a model for the world to follow.

Rowland goes on to suggest over a dozen undoubtedly excellent software applications that law firms can use to emulate LPO companies and supposedly "save the American legal industry." But in his valiant effort to "save" legal work that otherwise is going overseas, Rowland misses three crucial points:

1. Even supposing that Western law firms adopt the most advanced LPO technology, there still remains the pesky problem that actual human beings are needed to implement it. Dean David Van Zandt of Northwestern University School of Law estimates that given student loan obligations, living expenses, etc., $65,000 per year is the break-even point that U.S. law graduates must earn just to stay afloat. The mavens at Above The Law say that "[a] break-even point of $65K seems low to us, given high law school tuition, the borrowing costs associated with student loans, and the opportunity cost of going to law school when you could be earning a salary in some other industry." They point out that "[a]nother academic, Herwig Schlunk of Vanderbilt Law, believes that the break-even point is much higher." But let's assume that Dean Van Zandt's "low" $65k figure is accurate. Even so, all of the high-tech emulation in the world cannot allow law firms to escape the fact that super-smart, ambitious, enthusiastic Indian lawyers from even the finest law schools are justifiably happy to work for one-fifth of that amount, considering the lower cost of living in India, among other factors.

2. It's not just about salaries. It's also about the low cost of both operating and living. The cost of office space in Mysore, for example, where the #1 ranked LPO in India is based, is still 1/43rd the cost of comparable space in Manhattan. Housing and other living expenses there remain so low that the Indian attorneys have a standard of living that would be the envy of many Manhattan associates, yet the Indians receive less than one-tenth the salary. Rowland fails to take advantage of the argument that salaries and expenses in India are rising, but that's not so important. Also rising are the skill sets of the Indian attorneys.

3. The fact is that offshore legal outsourcing need not be a threat to American lawyers. Many law firms are embracing LPO, and reaping rewards from it. Those firms are receiving more assignments and more client revenue, not less. This is coming in part from (a) existing clients who send them “elective” legal work that otherwise would never be performed, due to cost, but which is not a problem when Western lawyers are paid to supervise and edit the work of attorneys in India, and (b) new clients who come to those law firms only because of their reputation for developing an alternative to the old model. Also, the statistics suggest it is likely that off-shore outsourcing leads to more jobs in the West, not fewer. Off-shore legal outsourcing, especially high-end legal outsourcing, creates more legal work in the West, as deals previously undone, and litigations previously settled (or never filed), due to excessive legal costs, are suddenly affordable. Affordability means more work for the Western lawyers involved in supervision, editing, negotiating, and/or appearing in court.  Commentator Michael Bell makes a similar point in a post on his LPO Source blog:

Are the projected 5000 new jobs in the LPO industry directly correlated to a 5000 job “shift” (read lost, redundant, right-sized, etc.) at top US law firms? Is it economically sound reasoning to assume that economic interactions are tit-for-tat? In short, no.

Does the increase of LPO mean that there may be marginally less demand for legal support staff for certain low-value service areas? Perhaps. Alternatively, doesn’t allowing firms to offer new services so clients can economically litigate and conduct transactions also increase the demand for the services of law firms, and thus the demand for lawyers? Absolutely.

As discussed above, mastery of the new legal services technology, while important, is not the salvation of Western lawyers who mistakenly see themselves inevitably in a competition with LPOs. This is because offshore talent already is using the same technology even less expensively. This supposedly frightening news is really a signpost showing a brighter future ahead, assuming Western law firms are up to the challenge. If any law firm or solo practitioner wants to not only ride out this "perfect storm," but also profit from it, then it seems that the focus should not be on trying to prevent Indian lawyers from doing what they do best. Instead, the aim should be to leverage the Indian talent, while at the same time training and utilizing Western attorneys to supervise and edit the work of the India teams, negotiate deals, argue in court, and provide legal advice. Most of that cannot easily be done in India, and much of it cannot be done in India at all. So why not focus on those higher value skills, rather than trying to hold on to work that can more efficiently be done offshore?

"A LEGAL PASSAGE TO INDIA: As Corporations and Law Firms Offshore Work to India, the Legal Outsourcing Industry is Gearing Up for a Boom"

That's the title of yet another major article on offshore legal outsourcing. This one is by T.V. Mahalingam and Rahul Sachitanand in the latest issue of Business Today, India's leading business magazine. The article includes a round-up of quotes from LPO companies UnitedLex, Cobra Legal Solutions, Pangea3, Mindcrest, and SDD Global Solutions, as well as the legal process outsourcing units of IT/BPO companies Infosys, Wipro, WNS, and Cognizant. The article also features facts and figures, such as these:

• Current annual revenues of LPO industry: $400m (not including corporate captives)
• Number of lawyers employed by LPO companies: 12,500
• Number of significant companies: 30
• Number of English-speaking lawyers "churned out" each year in India: 80,000
• Average hourly billing rates of Indian LPO attorneys: $25-40
• Average hourly billing rates of U.S. law firm attorneys: $250-350
• Average hourly billing rates of U.S. freelance contract attorneys: $50-100

Here are a few excerpts from the article:

Consider these numbers: "A document review in a New York law firm will cost $75-80 per hour; in Ohio, it would be $40-50; in India, we do the same for $11-12," says Sakthivel Venkatraman, Managing Director for India Operations at Cobra. It is hardly surprising then that 85% of all legal process outsourcing vendors, whether primarily or exclusively, deliver services in India, even though most of them are headquartered in the US.

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And the size of the Indian industry? "A billion dollars," proclaimed Sanjay Kamlani, Co-CEO of Pangea3, at an industry conference held in Noida in November. It was a number that not everybody agreed with. "Perhaps $400 million is more like it, if we were to look at just pure-play LPO work done out of India. Perhaps if you included back-office work too, then it could be a billion dollars," says Ganesh Natarajan, President and CEO of Chicago-headquartered Mindcrest. Kamlani, though, says his estimate of a billion dollars includes the captives of American corporations like Honeywell and Citigroup, which do legal work out of India.

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Sceptics might argue that the recent boom in the LPO industry is short-lived and can be attributed to the global recession. They argue that as bankruptcies and litigation went through the roof, Indian LPOs got a chunk of the huge legal work.... But industry folk like Natarajan and Kamlani believe a structural shift of sorts is happening and that business is at a possible inflection point in terms of growth.

"Earlier, LPOs were getting most of their business from the legal departments of companies that wanted to reduce costs," says Natarajan. "However, since the recession, we are seeing more law firms talking to LPOs," he adds. It is a point of view echoed by SDD Global's Russell Smith: "Law firms too, are increasing their involvement with LPOs, but mostly at the insistence of their corporate clients," he says.

Also, courtesy of the recession, American law firms are being asked by clients to bid for business on a fixed-fee basis, rather than on hourly bills. That has forced law firms to cut costs, and in turn, to engage LPOs.

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Another sign of the maturity of the industry is the nature of the work that LPOs are undertaking and the increasing depth of the client relationships. Gurgaon-based UnitedLex began with patent support and contract management but has expanded to document review, trademarks support, and legal research.

UnitedLex CEO Daniel Reed says companies such as SDD Global and the one he heads are also trying to move the LPO industry beyond the lift-and-shift business model. "Clients are now approaching us to help them redesign their overall contracting function and provide technology and process design support," says Reed.

Click here to read the full article, which includes the added benefit of an amusing photo of yours truly, who arguably made a mistake by agreeing to stand on his head in the yoga posture shirshasana, succumbing to outright begging by the Business Today photographer.

U.S. Law Review Article Explains How Offshore Legal Outsourcing is Changing the Legal Landscape

By Sanjay Bhatia*

In what may be the most comprehensive and thoughtful articles on the topic of offshore legal process outsourcing ("LPO") in the last few years, Associate Professor Cassandra Burke Robertson of Case Western Reserve University School of Law has concluded that this trend is revolutionizing the way in which law is practiced in the West. "International legal outsourcing is reshaping the practice of law," says Professor Robertson, in her increasingly acclaimed, 59-page law review article, "A Collaborative Model of Offshore Legal Outsourcing." Professor Robertson suggests that for legal outsourcing to be effective, buyers of LPO services should "adopt a collaborative model that builds relationships" to avoid potential risks.  A copy of the article can be downloaded here.

Using a particular and actual high-profile litigation in Los Angeles to demonstrate some of the most surprising and profound ways in which LPO services are shifting the legal landscape, Professor Robertson comments as follows:

Offshoring the defense in that case did not merely replace domestic legal services with a lower-cost alternative elsewhere; instead, it changed the nature of the defense entirely. It took a case that would likely have been handled outside the court system through a nuisance settlement and brought it within the formal adjudicatory system. As a result, the case was decided on the merits and the decision is publicly available, potentially discouraging further merit-less claims.

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[I]nternational outsourcing can transform individual lawsuits, [and] it also demonstrates how outsourcing is quickly becoming a part of mainstream legal practice. Clients who experiment with outsourcing tend to continue their contracts and institutionalize the practice.

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Given the rapid growth of transnational legal outsourcing—and the large cost-savings associated with that growth—it seems safe to say that outsourcing is not going away anytime soon. The legal profession will have to adapt to incorporate this new way of providing legal services.

Professor Robertson's views reflect the growing acceptance of the LPO industry among the Western legal community.  Barely a decade old, offshore legal outsourcing was scoffed at initially, grudgingly accepted thereafter, and is now fast being accepted as a phenomenon that is here to stay.  As Professor Robertson rightly points out, legal outsourcing received a major boost after being approved by the American Bar Association and numerous state and local bar associations.  Professor Robertson's article also validates the view that legal outsourcing from the West to countries like India is not just confined to quasi-legal work such as filling out forms and transcribing depositions, but includes high-end, complex work such as legal research, drafting briefs, drafting contracts, and preparing drafts of patent applications.  She points out that “[w]hile this higher-level legal work represents only fifteen percent of the LPO marked right now, it is quickly growing; as LPO firms become more established, they tend to take on increasingly more sophisticated work.” 

Importantly, regarding the highly contentious and bitter complaint that legal jobs are lost in the U.S. because they are outsourced, Professor Robertson concludes otherwise. She cites facts to support her point that offshore legal outsourcing "creates more jobs than it eliminates... [and] the cost savings achieved from offshoring lower-level work may create more high-end jobs onshore."   Not only do I agree, but I would further add that even the offshoring of high-value work creates job opportunities in the West. I have seen in my own experience how this kind of outsourcing creates more legal work in the West, not less.  Deals previously undone, and litigations previously settled (or never filed), due to previously excessive legal costs, become suddenly affordable. Affordability means more work for the Western lawyers involved in supervision, editing, negotiating, and/or appearing in court.

Professor Robertson also stakes out a position different from several recent legal commentators, by cautioning against the increasingly prevalent trend of  "disaggregation," i.e., where "discrete tasks [are] carved out of the overall legal representation" and outsourced.  She argues that this can lead to diffusion of responsibility among the various service providers, a problem that is magnified when work is sent outside the country.  Professor Robertson acknowledges that while outsourcing part of a larger assignment per se amounts to its disaggregation, the risks can be minimized by a collaborative approach between the service provider and its client, where the focus is on "cooperation, communication and negotiation of status and resources." 

Professor Robertson's article obviously is a result of thorough research, and it is supported by 327 footnotes. It signals the growing acceptance of the LPO industry, not only in the commercial world of corporate clients and law firms, but also among legal academia.  Today, LPO is a robust, established industry.  Though not as big as the software industry, it has reached a stage where there is no turning back. The end consumers of legal services, be they individuals, law firms, or corporations, are realizing the benefits.  Corporations in particular have begun to mandate their attorneys and law firms to leverage offshore talent at LPO companies. This is the reason why even the large law firms, some of which are among the AmLaw 100 and the UK's "Magic Circle," and which otherwise would be the last to even consider offshore legal outsourcing, are now engaging in it.  

The bottom line, of course, is to get more "bang for the buck," without any compromise in quality.  However, it is perhaps the disaggregation of legal tasks, resulting in most LPOs performing only a fraction of the overall legal job at hand, which has led to the perception that LPO companies do only low-end, "grunt" work, or in other words, "the chore, but not the core."  There may be some truth in this, but it does not reflect the entire reality.  As Professor Robertson's notes in her article, there are several offshore legal outsourcing companies, though few in number, and sometimes smaller in size, which do cutting-edge work that requires immense legal, analytical, and writing skills.

Professor Robertson's article also coincides with some noteworthy developments in the LPO field that may signal the beginning of a phase of both consolidation and continued expansion.  Recently, the Gurgaon-based LPO, UnitedLex, acquired another player in the LPO market, LawScribe. Until then, the only other notable acquisition in the industry was Mysore-based Software Paradigms (India) Ltd. ("SPI") taking over the entire LPO business of another local player,  Comat Technologies, in late 2007. Soon after this month's UnitedLex/LawScribe transaction, the industry was witness to another acquisition that made UnitedLex's buy seem relatively small: the Thomson Reuters acquisition of a 100% stake in Pangea3, arguably India's largest pure-play LPO in terms of both personnel and turnover. 

The Thomson deal is significant, not just because of its speculated but unconfirmed size of $35-100 million, but - more importantly – because the world's largest legal publisher has put its money into offshore legal outsourcing, which perhaps it sees as the future of the legal industry. Thomson's acquisition is bound to silence many of the LPO naysayers in the West, who have repeatedly predicted the downfall of the industry, wishfully but ignorantly regarding it as a passing fad. To the contrary, The Thomson deal is also likely to result in other big names in the legal industry investing in LPO.  As Professor Robertson correctly noted in her prescient article, offshore legal outsourcing seems destined to "reshape the practice of law."

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* Sanjay Bhatia is Head of Operations at SDD Global Solutions, one of India's leading providers of high-end legal outsourcing services, and the only Indian legal outsourcing company managed by a U.S. law firm. He is a graduate of India's top-ranked National Law School. SDD Global has offices in Mysore, Bangalore, New York, and London.  SDD Global recently ranked as the #1 outsourcing company in India, and #2 in the world, out of over 2,700 companies evaluated, according to the 2010 survey of 6,547 clients by The Black Book of Outsourcing.