Thursday, February 14, 2008

Legal Process Outsourcing: Savings Up to 70%

Financial Post: Billable-hour rates for lawyers are skyrocketing.

One U.S. firm recently broke the sacrosanct $1,000-per-hour barrier and it can cost anywhere from $500 to $800 an hour for top Canadian legal talent. Salaries of associates and student interns -- those who do the legal grunt work -- are escalating, hitting $100,000 and up.

Solution? "Legal Process Outsourcing" (LPO) to India.

A 1,500-hour project would costs $375,000 if carried out in Canada or the U.S. by a $250-an-hour junior lawyer. In India, the same job would be $50 an hour for a total project cost of $75,000 --a savings of $300,000. Estimates of the savings from LPO range from 30% to 70%.

Common LPO activities in India include litigation and corporate commercial services including legal research, document review and drafting, contract management, lease abstracting, and due diligence. The 10-hour time difference means lawyers can leave their office at night and return to a finished memorandum the next morning.

Employment in LPOs is projected to grow to 32,000 next year, 40,000 by 2010, and 82,000 by 2015, according to a
new survey.


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