U.S. Legal Work Booms in India
Sunday, May 11, 2008
GURGAON, India -- When Aashish Sharma graduated from law school two years ago, his father had visions of seeing him argue in an Indian court and eventually become an honorable judge.
Instead, Sharma, 25, now sits all day in front of a computer in a plush, air-conditioned suburban office doing litigation research and drafting legal contracts for U.S. companies and law firms. He is part of a booming new outsourcing industry in India that employs thousands of English-speaking lawyers such as him to do legal work at a small fraction of the cost of hiring American lawyers.
"It is much better than going to court in India and dealing with all kinds of rough people. Working in legal outsourcing is a happy career move for me, although my father does not fully understand what I am doing here after my education in Indian law," said Sharma, who began working in February for an outsourcing company called Quatrro. "I am getting valuable exposure to the American judicial system, corporate law and their way of working."
Legal process outsourcing is being called the next big thing in Indian business. It marks India's climb up the chain of outsourcing jobs -- from low-end, back-office service functions in call centers to high-value, skilled legal work.
In the past three years, the legal outsourcing industry here has grown about 60 percent annually. According to a report by research firm ValueNotes, the industry will employ about 24,000 people and earn revenue of $640 million by 2010.
Indian workers who once helped with legal transcription now offer services that include research, litigation support, document discovery and review, drafting of contracts and patent writing. The industry offers an attractive career path for many of the 300,000 Indians who enroll in law schools every year. India and the United States share a common-law legal system rooted in Britain's, and both conduct proceedings in English.
The explosion of opportunity here was triggered by what are known as "e-discovery laws," a set of U.S. regulations established in 2006 to govern the storage and management of electronic data for federal court actions. Overnight, the volume of information to be stored, archived, filtered and reviewed for litigation swelled. But there were not enough affordable lawyers or paralegals to do the work in the United States.
"The new e-discovery rules sent American companies scurrying all over the place. Neither the corporates nor the law firms in America are geared to do this kind of work at short notice. And that is where the Indian players come in. We can bring together a large number of skilled lawyers in no time at all and at one-fifth the cost," said Srinivas Pingali, executive vice president at Quatrro, which also offers technical support, credit card fraud management, consumer research and architectural services for American clients, among other work.
Pingali said that the economic slowdown in the United States has not hurt his company's business. In fact, legal work related to bankruptcies has increased.
Because of the sensitive nature of legal work, Indian outsourcing companies have tried to allay the concerns about confidentiality. They have installed closed-circuit televisions, network safeguards and hack-proof servers.
Many outsourcing companies in India already have those security measures in place because they have been handling the credit card and banking operations of global companies for more than a decade. Industry members say that outsourcing of legal work to India is a natural next step.
"Ninety percent of a lawyer's work is legal research and drafting, and all this can now be offshored to India," said Russell Smith, who worked in a Manhattan law firm called SmithDehn before moving to India to set up an outsourcing company in 2006. "A large portion of our fees in the U.S. is because of office rent. It is often a big decision to hire one attorney in the U.S. In India, we can hire 10 at a time and train them all at once."