OUTSOURCING LEGAL SERVICES: “CHANGING THE WAY LAWYERS DO BUSINESS”

By: N13 shukla

Patent Services:
• Patent research and analysis : Landscape studies, patent appraisals and valuation studies, infringement analysis and prior art searching. • Patent application drafting: Various stages of filing of patent application (prior art searches, patentability assessment, patent landscaping, drafting specifications, drawings etc) may be outsourced to an Indian Party. • Patent prosecution: Indian companies are helping US attorneys in the patent prosecution process, from providing a technical assessment of the prior art cited by a patent examiner to drafting responses to the examiner’s objections.

Legal Support:
• Drafting and revising contracts/ agreements: Employee contracts, Non disclosure contracts, licensing and supplier agreements etc are initially drafted by trained Indian Lawyers and sent for review to US attorney. • Legal Research: Lawyers sift through large quantities of data using electronic database and the Internet, to provide focused research to law firms and attorneys. Legal research is conducted for all sorts of US laws including case and statutory law.

Paralegal Support:
Document Processing, production and management (includes word processing, legal transcription, legal coding, document conversion, keyword and XML tagging and archiving

• Legal Counsel: Outsourced legal counsel services for an in-house firm (with or without legal department) or a legal firm, encompass most of the areas: Antitrust, bankruptcy, construction, Corporate, Criminal and civil rights etc.

Legal Overview :
Market Potential, Breakdown by Service Category
• Worldwide spend on legal outsourcing is estimated to be in the region of $20BN growing at a CAGR of 8.1% [Hildebrandt International] • Of this composite figure, approximately $6BN is generated from purely “legal” services: – Litigation Support (4.9BN) (82%) – Customized Legal Research (0.62BN) – Patent & Trademark Prosecution (0.4BN) [Hildebrandt International] • NASSCOM estimates the size of the outsourced component of this global pie to be around $3-4BN • With current revenues around $60MM, NASSCOM estimates that India currently has about 2-3% market share in the outsourced LPO market • The current sectoral breakdown of the Indian market shows heavy bias towards IP solutions: ( Value Notes Estimates June 2006) – $42MM – 70% Patent and Trademark filing support services – $12MM – 20% Customized legal research – $6MM – 10% Litigation Support [ValueNotes]
Contracts and Research Litigation Support

Contracts and Research

Global Market
IP

IP Services

Indian Market

Lit. Sup.

The short-term will see a trend correction in the Indian LPO market which will bring Litigation Support’s current 10% market share into line with the global market i.e. 83%. This trend correction will happen at the expense of IP services.
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Market spending for legal services
Country Amount (US $ Billion) Growth over the previous year (%)

Australia China France Japan South Korea UK USA

6.9 1.6 18.4 1.09 1.61 34.2 166.8

11.6 7.0 14.0 8.0 -3.3 3.6 5.6

• Client Types
– Corporate Legal Departments - With a rising tide of corporate litigation, consolidations, mergers, and some of the century’s most sweeping changes to corporate governance; corporate legal departments are facing unprecedented workloads and increased scrutiny. Tight budgets mandate even more vigilance in controlling large costs such as outside legal fees and discovery requests. Increased focus on outsourcing quasi-legal work including contracts – Law Firms - Consolidations, mergers and the dispersal of legal expertise across geographically distributed offices have put significant pressures on law firms to efficiently manage critical assets. At the same time, law firms are under pressure to provide clients with a single unified face, higher levels of service, and reduced legal fees – Government and Universities - Huge market with a urgent need to find a low cost solution
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Legal Services - Summary
Litigation Support
Electronic Document Discovery Paper Discovery
Data wrangling, extraction of metadata, de-duplication, data culling, conversion into desired format and legal review Image capture solutions, OCR/ICR/Text clean-up, logical utilization, indexing and database conversion

Coding of Documents Objective/bibliographic coding, In-text coding, subjective coding Attorney Document Review Legal Research
Privilege determination, substantive issue coded review for responsiveness Conducting research by using Westlaw/Lexis Nexis, preparing memos and research notes

Contract Management

Contracting Automation Reduces the creation time, lowers administrative costs, reduces contract and Standardization risk, fosters greater collaboration, works on pre-defined templates and
clauses

Document Management Establishes searchable central repository, greater visibility to contracts, saves cost, uncovers risk and improves compliance, increased System
awareness of business terms

Audit and Compliance Audits internal contract management processes and controls,
organizational and structural alignment

Contract Abstraction andReviewing the contracts, creating templates for abstracting/summarizing the contracts, working on such templates Summarization

Intellectual Property

Patent Prosecution Intellectual Property Asset Management (IPAM)
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Prior art search, patentability assessment, patent illustration, response to office actions, claims drafting, docketing Claims mapping, infringement analysis, technology landscaping, competitor analysis, patent mining, competitive intelligence benchmarking

Patent/Trademark
• Prior Art Research • Preparation of Initial Application Drafts • Illustrations for Applications • Administrative Filing of Approved Forms • Tracking & Notifying of Renewal Dates • Validity Research for IP Litigation
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In-house

Domestic in house sourcing

Domestic Offshore

Offshore in-house sourcing Example: Company uses services supplied by its own foreign based affiliates (subsidiary) Offshore outsourcing Example: Company uses services supplied by an unaffiliated foreign based company

Example: Company provides its services domestically without any outside contracts Domestic outsourcing
Outsource

Example: Company uses services supplied by another domestically based company

2008 LPO Research
• Customers
– 2008 is projected to attract 920,700 new customers – 27% of first-time customers have become repeat customers

• Legal Financial Turnover (in USD Million)
– Average transaction in the United States for any Legal matter involves = $20,000/- per case

Why India?

• • • • •

Highly Educated/Skilled Personnel (250 Million) Technologically Connected/Adept English Speaking Lawyers/Legal Proceedings 40% of US Based Cost Common Law System
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Why India??
• 40%-60% cost reduction for offshored process o Differential in wages from the US 0r UK parent location at approx 70%-80%. o Interaction costs increase 10%-20% bcoz of India being a remote location….thus net savings of 40%-60% • Labour cost arbitrage, the reason for cost savings likely to exist for next 20-30 years

Cost

Pr ty od uc ti

• Faster

vi

India’s value propositi on

turnaround time o Time zone odifference o 24X7 service

li ua Q y

t

• Learning curve effect, given increased activity across companies and increased centralization within company • Established methodologies and processes being rapidly adopted for better performance • Well defined quantifiable metrics for quality and process • Access to highly qualified – skilled pool

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