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Why India is a Preferred Legal Outsourcing Destination

Last updated: 06 Mar, 2024 By Ritu Kaushal | 6 Minutes Read

For close to three decades now, India has been one of the most sought-after hubs for Legal process outsourcing services in the world. Outsourcing legal work to India is a preferred destination for global businesses owing to its high-quality legal services and cost savings. The country boasts a bevy of legal process service providers who can deliver transactional, mid-level, and high-end legal processes.

India shot to global fame because of the easy availability of legal professionals who are well-versed in various jurisdictions and adept in the English language. The country’s IT expertise made robust technology infrastructure easily available at reasonable prices. Thus sprang the LPO providers who turned into reliable partners for international legal support. Clients globally acknowledge the benefits of outsourcing legal services to India. Thus, the country continues to play a pivotal role in reshaping the global legal services landscape.

Historical context of LPO’s emergence

Legal process outsourcing had been unheard of for most part of the 20^th century owing to client confidentiality necessities. However, this changed towards the end of the century. With major shifts in the global economy in the late 20th century and early 21st century, businesses devised cost-efficiency measures. Here’s what happened:

1. Economic changes and recession:

The early 2000s saw significant economic changes, including the bursting of the dot-com bubble and the onset of a global recession in 2008. Law firms, hitherto considered recession-resistant, too, began to feel the economic strain when cost-conscious clients started demanding cost-effective legal solutions

2. Impact on law firms:

With clients facing cash crunches and financial hurdles, there began a regime of increased scrutiny of legal expenses. Tightening their purses, they began to demand greater efficiency and cost-effectiveness from their legal teams or legal service providers. Law firms, therefore, were compelled to reevaluate their operational models and find ways to reduce costs without compromising the quality of legal services

3. Need for outsourcing to manage costs:

In response to these challenges, law firms sought innovative strategies to manage costs more effectively. Outsourcing legal services to low-cost countries emerged as a viable solution. This strategy gave them access to skilled professionals at a much lower cost in comparison to what they were paying for their in-house resources. This strategy of outsourcing legal work to India gained further traction as law firms discovered that the further outsourcing of non-core legal tasks to external service providers was beneficial in a big way to the firm’s top-line

4. Introduction of legal outsourcing as a solution:

Legal process outsourcing evolved as a specialized form of outsourcing tailored for the legal industry. Law firms and corporate legal departments began outsourcing their relatively easy and non-confidential legal processes to overseas outsourcing vendors in countries like India that had a large pool of English-speaking and legally trained professionals. The cost advantage India offered, coupled with the easy availability of skilled resources, positioned these outsourcing hubs as ideal partners for law firms seeking to optimize their operations

5. Benefits of outsourcing legal work to India during economic challenges:

Legal process outsourcing in India offers law firms several advantages during periods of economic challenges, with cost savings being the primary driver. It maintained and, in certain cases, also improved its profitability and efficiency. These then made them competitive and scalable, giving them an edge in a challenging market. As confidence in outsourcing grew, specialized expertise in niche areas of law too came to be considered. This helped law firms to entrust a wide range of cases and legal processes to their outsourcing partners, driving efficiency and profitability

10 Factors that contributed to India’s rise in legal outsourcing

India’s rise in legal process outsourcing services is attributed to several factors. These are summarized as follows:

1. Cost savings as a primary advantage:

One of the primary drivers for outsourcing legal processes to India is the cost arbitrage. Labor costs in India are drastically lower in comparison to the western and south-east Asian nations. This allows law firms in western countries to achieve cost savings while maintaining quality services

2. Skilled workforce:

India has a large pool of highly educated and skilled legal professionals. The country’s education system fosters a large number of law graduates annually. These graduates are proficient in handling diverse legal tasks, making them easy collaborators with clients in Western countries

3. Proficiency in the English language:

English is widely spoken and used in legal education and practice in India. This proficiency turned into a major gamechanger for the country – it ensured effective communication with clients from English-speaking countries and made way for increased collaboration

4. Time zone advantage:

India’s time zone advantage facilitates round-the-clock operations. Clients in Western countries make use of this advantage, bringing in quicker turnaround of their cases and also increased efficiency in their overall legal functions

5. Strong technology infrastructure:

India has invested significantly in its technology infrastructure, providing a solid foundation for the delivery of IT-enabled legal services. This includes secure data management, document review platforms, and communication tools, enhancing overall efficiency.

6. Familiarity with legal systems worldwide:

Many Indian legal professionals are familiar with legal systems in common law countries thanks to a legal education system influenced by British law. This familiarity is advantageous for understanding and addressing the specific legal requirements of clients from different jurisdictions

7. Established LPO service providers:

Over the years, several Indian companies have emerged as leaders in the LPO sector. They offer a wide range of legal process services across all levels of complexities, providing clients with legal outsourcing solutions

8. Data security measures:

Concerns about data security are addressed through implementing robust security measures. Most LPO service providers adhere to international standards of data security and confidentiality, thereby managing clients’ work with the utmost safety

9. Globalization and legal complexity:

The increasing globalization of businesses and the growing complexity of legal requirements have led companies to seek specialized legal services. India’s legal process outsourcing industry responds with evolved offerings and expertise across diverse legal domains

10. Regulatory support:

The Indian government has been supportive of the outsourcing industry, implementing policies and regulations that facilitate a conducive environment for outsourcing businesses, including those in the legal domain

Overview of Outsourcing legal work to India

Being one of the world’s leading destinations for legal support services, India’s offerings have evolved through the years. Starting with low-end, transactional processes, the offerings include a range of legal support and assistance to law firms, corporate legal departments, and businesses.

Here are key aspects of LPO services in India:

Document review
Legal research
Contract drafting and management
Intellectual property (IP) services
Litigation support
Legal transcription
Due diligence
Compliance and regulatory research
Contract lifecycle management
Data security and confidentiality

Services offered by Cogneesol

Cogneesol is a global business process management (BPM) company that has been providing a diverse range of services across industries. BPM solutions across insurance, legal, finance and accounting, research and analytics, and technology have been the company’s mainstay. Cogneesol partners with client businesses to streamline and optimize their operations and achieve operational efficiency, flexibility, and agility.

The legal practice forms one of Cogneesol’s primary verticals. A mature function, it has been providing legal outsourcing services to law firms and businesses across the globe. These services include: