LPOs to add more punch to India action

Source: The Economic Times
25 Jun, 2007

BANGALORE: The legal process outsourcing (LPO) sector in the country is likely to see more action in the coming months. As of now only around 30% of the top ten Indian BPO players have evinced interest in entering this segment. But, according to industry experts, big players like Infosys, Wipro and others are studying this model and could look at entering this business in the near future.

“Demand for LPOs are on the rise. It makes sense for the BPOs to enter this segment because the profit margins in LPOs are higher. And legal-process outsourcing is part of high-end knowledge process outsourcing, which many of these BPOs are already into,” said Russell Smith, president and chairman, SDD Global Solutions.

However, this buoyant sector could present many challenges to the BPO sector, the biggest among them is finding the requisite talent. “Finding someone with domain expertise is difficult and to find experienced management is likely to be a bigger challenge, said Matthew Banks, senior vice-president, legal services, Integreon.

Also, with LPO firms across the country having smaller teams and serve niche clients, so defining a suitable business model is important for these large-scale BPOs. “There is huge potential in the LPO segment, but there is gestation period of about 3 years that slows down the growth.

Many of the LPO companies are more specialised and boutique kind of firms which are doing higher-end work and having smaller teams. It could be very difficult for the BPOs to scale up the operations in such a scenario,” said Avinash Vashistha, CEO, Tholons. LPO is a business segment pegged at $3-4 billion by Nasscom.