RITU SOLANKI, a 28-year-old lawyer with a degree from Nottingham University, spends most of her time drafting contracts and legal memos for a telecoms firm in Britain. She, however, is in Gurgaon, a high-rise satellite city on Delhi's edge, where she works for CPA Global, a legal-outsourcing company. A lawyer with similar experience at a London law firm might charge up to $400 an hour for the sort of work Ms Solanki does; her labour costs around $50 an hour. As law firms and corporate legal departments face mounting pressure to cut costs, an increasing number are choosing the Indian option.
Last year, Rio Tinto, an international mining group, moved a tranche of legal work to Indian lawyers at CPA Global, which has its headquarters in Jersey, to save a fifth of its legal costs. Others are following. In May CMS Cameron McKenna, a British law firm, signed the legal industry's biggest outsourcing deal with Integreon, an American company with operations in India. Over the next ten years, Integreon's Indian staff will provide the British firm with services from human resources to legal research.
Though India's legal-process outsourcing (LPO) industry is still small, it is growing fast. In a recent report, Value Notes, an Indian consultancy, estimated that India's LPO revenues will grow from $146m in 2006 to $440m this year and $1.1 billion in 2014. The number of Indian firms offering LPO services has swelled from 50 in 2005 to more than 140 today. Investors have spotted the potential. In February, Actis, a British private-equity outfit that specializes in emerging markets, invested $50m in Integreon. Intermediate Capital Group, also based in Britain, has bought an undisclosed chunk of CPA Global.
The growth in LPO has been boosted by the global economic slowdown. "It's a very obvious way to cut costs and it is hard to refute once you have seen the good work that is being produced," says Leah Cooper, CPA Global's strategy director. Until four months ago, Ms Cooper was Rio Tinto's managing attorney. Western lawyers have in the past been slow to outsource even the most basic work to India, because of worries about confidentiality and quality. But they are now commissioning ever larger volumes.
Developments within India's outsourcing industry have also contributed to making the country a more compelling destination for legal work. Although still dominated by low-value process outsourcing, such as call-centers, the fastest growth is in companies offering highly skilled work, from medicine to engineering and information technology (IT). A growing number of newly qualified lawyers, trained in a legal system based on Britain's and often educated at British or American universities, are drawn to the higher salaries and international experience now being offered. Such lawyers are capable of doing more complex work than the document review and proofreading that currently forms the bulk of legal outsourcing.
That said, many legal jobs, from court appearances to the handling of witness depositions, will never be outsourced. And fears persist among some senior lawyers about sending even the simplest chores offshore. A profit-inflating scandal last year at Satyam, India's fourth-largest IT outsourcing company, reawakened old worries. There is also the question of how young lawyers will cut their teeth if the jobs they typically do are sent instead to Delhi. Ms Cooper says: "I hear that every day and my response is, I didn't learn a thing as a baby lawyer digging through boxes in a storeroom. We may have to rethink how our lawyers are trained."