awards - exigentperson firm that says it serves nearly half the fortune 100 companies and takes...

Intelligence report

India Business Law Journal 47

Legal process outsourcing

November 2013

Legal Process Outsourcing

AwardsAs clients continue to demand more for less, India Business Law Journal

reveals five LPOs that stand out from the crowd

By Rebecca Abraham

India Business Law Journal’s2013

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India Business Law Journal48


November 2013

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November 2013

On 24 June, one of the most profitable US-based law firms, Weil Gotshal & Manges, announced it was laying off 60 associates and 110 support staff. In addition, some partners at the firm were going to be mak-

ing “meaningful compensation adjustments”.This was all the more remarkable as in making the

announcement the firm’s executive partner, Barry Wolf, referred to its “strong financial position” and that it had “zero debt outstanding”.

News of the cuts sent shockwaves through the legal industry, which has been struggling to adapt in the face of changing client expectations.

The writing on the wall

Top-end law firms in the US are grappling with the realities of what Wolf referred to as the “new normal”: a shrinking demand for premium legal services. The new normal also includes competition from innovative legal service providers, which are using technology to drive the change. An often cited example is Axiom, a 1,000-person firm that says it serves nearly half the Fortune 100 companies and takes pride in “being built on the premise that the current law firm model is broken”.

Change is afoot in the UK as well, where the rise of law firms licensed as alternative business structures, with non-lawyer owners and investors, is challenging the status quo. These firms are growing in size and revenue. One of the pioneers, private equity-backed Plexus Law, recently announced a tie-up that will create a £90 million (US$145 million) turnover insurance litigation business.

These developments are forcing the pace of innovation within law firms in developed jurisdictions in much the same way as the emergence of legal process outsourc-ing, nearly a decade ago, forced a rethink of what type of work legal teams in these jurisdictions, both within companies and in private practice, should be doing.

LPO is now firmly established as part of the legal ecosystem. But if, as Integreon CEO Robert Gogel says, “Labour arbitrage is no longer a good reason to do busi-ness,” the big question is what will the LPO industry, or indeed the legal services industry, look like in a couple of years.

It is against this backdrop that India Business Law Journal unveils its fifth annual Legal Process Outsourcing

Awards. Unlike in past years, when awards were made for excellence in providing various kinds of services, only LPOs that excelled in all areas were considered for this year’s awards.

Our 2013 awards recognize five Best Overall LPOs and once again an additional award of LPO of the Year has been given to a single service provider. A description of the awards, along with details of the methodology and judging criteria, is provided on page 51.

LPO of the Year

This year India Business Law Journal’s LPO of the Year award goes to Integreon. This is the first year Integreon has won this award. In 2009 Integreon was recognized as one of the Best Overall LPOs and in 2012 it was rec-ognized in our contract services and corporate services category.

Integreon has 1,000 employees and two facilities in India (in Mumbai and Noida, outside Delhi) and 2,200 employees and six facilities outside India. Gogel says that LPO business accounts for 50% of its work globally, while 25% involves providing other services to law firms and in-house teams.

While not a pure-play LPO, Integreon’s offering for the legal market has gone from strength to strength and it has emerged as the LPO of choice for many law firms and in-house legal teams in several jurisdictions.

Microsoft, for example, has used Integreon since May 2009. Lucy Bassli, the assistant general counsel at Microsoft, praises it for its “attention to detail, quality of RFP [request for proposal] response, depth of engage-ment and heavy emphasis on its people”.

In June, Integreon signed a three-year contract with UK law firm Kennedys to deliver library and information services. Kennedys is an insurance and reinsurance specialist with 175 partners and 19 offices around the world.

Commenting on the agreement, Guy Stobart, chief executive of Kennedys, said the driver behind the part-nership with Integreon was “the requirement to have a scalable and first class service to meet the needs of a growing international law firm”.

Integreon reports that it has a 10-year contract to

Labour arbitrage is no longer a good reason to do businessRobert GogelChief Executive OfficerIntegreon

LPO of the Year

Integreon

Best Overall LPOs

Integreon

Mindcrest

Pangea3

QuisLex

UnitedLex

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provide legal support to CMS Cameron McKenna. It also supplies LPO services to King & Wood Mallesons, although this “support is still limited to Australia at this time”, says Eric Fiestel, marketing director for legal services at Integreon, who explains that the contract was signed with the Australian firm Mallesons Stephen Jaques before it went on to merge with the Chinese firm King & Wood.

A lawyer at a leading UK firm who has used services provided by Integreon’s Indian facilities for the past three years, remarks that Integreon has shown “the best understanding of what lawyers are looking for from an LPO provider”.

Anonymous endorsements like this are increasingly the norm in the LPO industry, with both LPOs and their clients appearing to be keen to stay below the radar.

The LPO elite

The other four recipients of this year’s Best Overall LPOs award are Mindcrest, Pangea3, QuisLex and UnitedLex.

Mindcrest, which was set up in 2001, has one delivery centre in Pune and three in the US – in Chicago, New York and Salt Lake City. This is a marked shift from two years ago when it had a second facility in India – in Mumbai – and only one in the US.

CEO Ganesh Natarajan reports that Mindcrest added 20 new clients in 2012 thanks to an international trade laws-related solution it developed in conjunction with a major law firm. “It highlights not just business benefits to our end client, but it is truly a unique example … [of how] a law firm and LPO provider collaborate with a client to create a win-win-win solution for all,” says Natarajan.

A director of electronic discovery for a large global corporation, who has used Mindcrest since 2009, says it has become “a true partner”. Having used the LPO to manage large litigations that required document review teams of more than a hundred reviewers or teams in multiple locations, he commends Mindcrest on its ability to swiftly adjust staffing and its excellent quality control. “Because we have worked together and know each other’s processes, we have, on more than one occasion, been able to plan, staff, train, and start up a document review over a weekend … with review teams of 10-15 reviewers.”

[Integreon’s strengths include] attention to detail, quality of RFP response, depth of engagement and heavy emphasis on its peopleLucy BassliAssistant General Counsel Microsoft

A survey was sent by email to hundreds of prospec-tive and existing clients of legal outsourcing services. Recipients were typically senior in-house counsel at major international corporations and partners at regional and international law firms. They were asked to confidentially rate the work of the LPO providers with which they were familiar.

In addition, survey respondents were invited to offer qualitative comments on their level of satisfaction with each LPO service provider. All these insights were taken into account by our editorial team during the judging process. Some clients have been quoted in the awards coverage, but a large number of respon-dents requested anonymity.

A separate survey was sent to all major LPO provid-ers with facilities in India. Each was invited to support its candidacy for the awards by submitting details of notable achievements and providing client references.

LPO providers were also asked to indicate which of their competitors they judged to be leaders in various categories of service.

In reaching its final decisions, India Business Law Journal’s editorial team used a combination of objec-tive data and subjective analysis. The numeric data collected from the two surveys formed the basis of the results, but was considered alongside the subjec-tive comments and insights received from LPO clients around the world. The submissions received from LPO service providers were also considered as part of this process, as were the references provided by their clients.

Only LPOs that provide services in all areas were considered for this year’s awards. Five winners of equal standing have been selected as Best Overall LPOs. An additional award of LPO of the Year has been given to a single service provider.

Methodology and judging criteriaIndia Business Law Journal’s LPO awards are based on quantitative survey

data combined with qualitative feedback from outsourcing clients

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As LPO users will testify, a vital ingredient for success in this extremely competitive market is attention to detail. And this key ingredient is not found only among the largest LPOs. Clients suggest that the competition provided by smaller LPOs is not to be taken lightly.

David v Goliath?

A prime example is Cobra Legal Solutions, which has 126 employees in India and eight in Austin, Texas. This six-year-old LPO provides legal support to Home Depot, a home-improvement giant that has stores across the US, Canada and Mexico. Komal Patel, director and counsel at Home Depot, says that the company has used Cobra for four years, mainly in e-discovery and document review.

“Cobra’s work product and customer service is excellent and unparalleled compared to any other domestic provider of similar services,” says Patel, who adds that Cobra’s costs are always lower than other LPOs. “I would recom-mend Cobra to everyone, and in fact, I do just that.”

Another client, who uses both Cobra and Chicago-based Clutch Group, which has a delivery centre in Bangalore, reports that they carried out a pilot study comparing Cobra’s work product to a review done by US lawyers, and found Cobra’s work was “as good if not better”.

Cobra reports that it has seen 38% growth in the year to date as compared to 2012, and that revenue from its larg-est client is up 156% from last year.

Meanwhile, Clutch Group reports that it successfully analysed 10 terabytes of data (200 million documents) for a financial services institution whose financial conduct was being investigated. “By harnessing cutting-edge

technology, we were able to save our client more than US$8 million in legal costs,” reports Colin Murphy at Clutch.

Manthan Legal, which was recently acquired by Exigent, a larger outsourcing entity, has similarly satisfied clients.

“Over the past six years, we have established an excel-lent working relationship and have truly partnered with the team,” says Deborah Swett, lead business immigra-tion specialist in the Boston office of Seyfarth Shaw, a US-based law firm. Swett adds that they were impressed with Manthan’s service delivery model, their level of profes-sionalism and strategic, forward-thinking vision from the moment they engaged the LPO.

LegalEase, an LPO with delivery centres in Chennai, Kochi and the US, is another LPO that is seeking econo-mies of scale. It reports that it has launched a new joint venture with Epoq, which provides “automated legal services” for insurers and financial institutions. Through the joint venture company, LegalEase is now offering its services to clients in the UK.

Infosys LPO, a relative newcomer, continues to realize economies of scale on account of being part of the Infosys family. It reports that it set up new onshore delivery centres in Altanta and Dallas. Michael Sonsteng, formerly vice-president of Integreon, has joined Infosys LPO as strategic business practice head for LPO.

Specialist LPOs

LPOs that provide solutions solely to the intellectual property (IP) market provide are also a force to reckon with. CPA Global, a provider of IP management services, has often made India Business Law Journal’s LPO awards list. It is missing this year only because we have considered only LPOs that provide services in all areas.

Clairvolex, a Gurgaon-based 120-employee LPO which provides only IP services, reports that it has been scaling up its US operations and has acquired a few large corpo-rate IP owners as clients in 2013, performing complex pat-ent portfolio analysis to help them monetize their patents.

Clairvolex says that “innovation has been a focus area for us, and a key business enabler”.

Beyond LPO

While innovation is key for survival in this market, it is also the means by which LPOs are looking to move up the value chain. Owning IP that is used can be crucial.

“We are now focusing on developing our own products,” says Ashish Arun, managing partner of Offshore Research Partners, who adds that his company recently picked up a 50% stake in Expert Witness Profiler, for which it was a vendor. “The idea was to move from the vendor model, where we are simply a third party resource sitting in India and doing the research.”

Small can be beautifulWhile the larger LPOs continue to dominate the market,

smaller and specialized players provide robust competition

We have established an excellent working relationship [with Manthan Legal, now part of Exigent] Deborah SwettLead Business Immigration SpecialistSeyfarth Shaw

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November 2013

These sentiments are echoed by a second client who says that while they chose Mindcrest on account of its ability “to be flexible in staffing and planning”, the key fac-tor was its ability to produce “an error-free product” and “cost was a small consideration”.

Pushing the boundaries

Pangea3, another Best Overall LPO, reports it has been “pushing the bar higher for itself and for the LPO indus-try”. With Thomson Reuters in firm control of Pangea3, its managing director, Gregory McPolin, reports that it enjoys “unmatched access to technology” on account of which clients can deal with challenges in entirely new ways.

Pangea3 reports that its clients include “global banks, aviation giants, electricity and utility companies and major wholesale/retail players” and that it recently launched its first multi-shore document review project.

“We began using Pangea3 in the litigation department in 2009, replacing an onshore company and immediately realizing significant cost savings and better quality,” says Tom Stein, litigation counsel at American Express.

The LPO has 900 employees at two delivery centres in India – in Mumbai and Delhi – and a delivery centre in Dallas. It says the Dallas centre has “grown tremen-dously” in 2013 and its litigation business in Dallas is now the same size as in the two centres in India.

“We’ve shifted our staffing models for this facility to ensure the same level of quality and scalability as our India-based delivery centres,” says McPolin. This means that instead of hiring only permanent employees, Pangea3’s Dallas office has “a core team of full-time, Pangea3 trained, process-driven experienced US lawyers who can be supplemented quickly by temporary staff” so as to fulfil larger engagements. “We rotate employees between our onshore and offshore offices to ensure that learning is shared and work processes are consistent across operations. Clients are assured the same quality, process, and management structure regardless of deliv-ery office.”

A lawyer at a New York law firm that used Pangea3 for a document review for a cost-sensitive client reports that while price transparency was important, the firm chose Pangea3 because people they spoke with at the company provided “comfort with their experience with complex

financial documents” and also “an understanding that they were driven not simply by cost but by employing the best in the business”.

The lawyer says that despite “some institutional sus-picion” about sending sensitive documents overseas, they chose to use Pangea3’s facilities in India after they “became comfortable with the capability of the attorneys in India who were recruited from top law schools and seemed every bit as qualified” as those in Dallas.

However, Joan Minicucci, the manager of intellec-tual property administration at Sony in the US, reports that while Pangea3 provides patentability searches for Sony, and “has performed and is performing generally satisfactorily”, Sony has “not engaged them to provide ‘higher-value’ services such as drafting applications or responses”.

Instead, Sony uses Evalueserve to conduct intellectual property (IP) landscape and analysis, drafting of new applications and office action response, as well as for patentability searches. Evalueserve has “invested sig-nificant resources to increase the number of qualified pro-fessionals capable of preparing quality applications and responses,” says Minicucci.

Evalueserve has 814 employees in India and almost 1,800 outside India. It reports that it has strengthened its patent solutions and that it supports clients who need to manage their patent portfolios and create content-rich patent drafts. It expects its IP headcount to stand at 285 by the end of 2013.

Service provider of choice

Another winner, QuisLex, is entering its 10th year of operation. It has over 750 employees across delivery cen-tres in Hyderabad, New York and Chicago.

CEO Ram Vasudevan reports that QuisLex was recently retained by both parties to a merger to complete the doc-ument review for a Hart-Scott-Rodina antitrust discovery procedure required by the US Fair Trade Commission. Vasudevan says that this came about when a long-term client engaged QuisLex to represent one side of a trans-action, and then recommended that it be retained by the counterparty, so as to ensure the document review could be carried out successfully and on time. “This is a testa-ment to QuisLex’s ability to handle extremely large vol-umes of data in an efficient and reliable manner.”

Donal Sullivan, a third party programme leader at Tyco International, would agree. “Our experience has shown that QuisLex has a strong commitment to the customer and is willing to go the extra mile to ensure that our

We began using Pangea3 in the litigation department … immediately realizing significant cost savingsTom SteinLitigation CounselAmerican Express

QuisLex has a strong commitment to the customer and is willing to go the extra mile to ensure that our processes run smoothlyDonal SullivanThird Party Programme LeaderTyco International

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processes run smoothly,” Sullivan says. He adds that QuisLex is Tyco’s service provider of choice due to its attention to detail, commitment to quality, diligence and experience.

Vasudevan reports that within the past year QuisLex has expanded its search and analytics capabilities, lead-ing to an increase in both quality and efficiency on its projects, and reducing time spent by several thousand hours.

A superior product

The list of Best Overall LPOs is rounded off by UnitedLex.

UnitedLex, which has its headquarters in Kansas, announced in June that it had been selected to be the primary managed document review provider to Pfizer. Commenting on its choice of LPO, Pfizer’s discovery counsel, Ed Gramling, said: “UnitedLex has proven they can deliver a superior work product in conjunction with highly competitive pricing and we are excited to have them on board.”

Three months later UnitedLex announced it had devel-oped an efficient e-discovery team for a US law firm, Goodwin Procter, through an insourcing process: first absorbing the team within its ranks, and then training and rebranding the team as the Goodwin eDiscovery Solutions Center.

“Insourcing our eDiscovery team with UnitedLex – a

brand we know and trust – was an excellent decision for Goodwin Procter, from both a client services and a stra-tegic business perspective,” said Catherine Woodward Gill, chief practice management officer for litigation at Goodwin Procter. “We now have a better-trained, fully managed, onsite eDiscovery department that knows our business, clientele and culture inside out.”

At the end of October, UnitedLex and LeClairRyan, a 344-lawyer firm with 22 offices in the US, announced the setting up of a collaborative venture, the LeClairRyan Legal Solutions Center, to integrate technology and quality control processes into the law firm’s litigation and transactional practice. It will be located in Richmond, Virgina. LeClairRyan also said that UnitedLex would assume responsibility for the operations of its discovery solutions practice and will provide additional capital to allow it to have “best-in-class, end-to-end litigation sup-port for its practices and clients on a global scale”.

Announcing the venture, Gary LeClair, the chairman of LeClairRyan, said it was “an important part of our strategy to provide clients with insightful and solution-oriented legal support services that have a founda-tion built on efficiency, predictability and value-based budgeting”.

UnitedLex has over 1,100 lawyers, engineers and consultants, in 13 global offices and three data centres spread across the US, the UK, Israel and India. Its inves-tors include three private equity funds: Helion Venture Partners, Canaan Partners and Sequoia Capital. g

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