I am a lawyer running my practicing firm with a team of 5 company secretaries / lawyers from Ahmedabad in Gujarat. My firm is exposed to several laws including civil, criminal, IPR, arbitration, immigration and all others, every good law firm boasts of being the expert. I want to plan to enter the rising sector of LPO.

Case 2

We run a small scale BPO (IT/ITES) center from Jaipur in Rajasthan. We are there in the BPO industry for some time and have been catering to clients in US, UK and Australia in inbound calls. We started with a team of 5 and now the total headcount is little over 30 in our company. We intend to expand our footprints towards LPO space.

These are two of the many cases that we keep receiving and advising as part of our offerings. We have chosen to discuss these two cases with the objective of show-casing the rising aspirations of Indian entrepreneurial professionals. Both these cases represent different backgrounds, types of organizations, ways of doing business, different industries, kind of team, etc. but still the aspirations are same i.e. about doing business in LPO sector in India!!

In the following few pages, we present some findings of our research about small LPO firms which are assisting foreign attorneys by deploying a team of 5 to 10 lawyers. They have dared to develop some forte. This research also covers the aspirations of those entrepreneurial people who want to start their LPO ventures from II or III tier cities of India at small scale aiming for rising faster; to higher scale. The discourse covers both, the analysis and advices!

What Happens in US Legal Markets

The world has started changing dramatically for the legal industry; as law becomes more of a business and less of a profession. In the United States, the law firms are planning to contend with the price/value gap. And they have understood; to do so and remain profitable, it’s necessary to become more efficient. Offshoring is the expected next step to set up a global footprint in which they can remain competitive.

Efficiency Equation

The work that can be easily digitized and transferred to foreign locations, would increasingly be outsourced in order to reduce overall legal spending. The variables that drive sourcing of professional legal services in today’s marketplace are the following:

• Cost Effectiveness
• Faster and 24/7 Services
• Quality Services

Solutions that provide quality at reduced cost will command increasing attention from the offices of both general counsel and CEO. Once cost is established, speed and quality are the focus streams.

Indian Markets: Research Done

New research is being undertaken to address the potential in knowledge about the activities and business plans of smaller LPO firms. A series of interactions were had by team–KPO Consultants, across six LPO hubs - Bangalore, Chennai, Hyderabad, Mumbai, Pune and Delhi. We infact interacted legal entrepreneurs, top management people, BPOs, authorities from FICCI, CII, BPIAI, Nasscom, Assocham, PHDCCI and academicians to garner more information about what these small LPO firms do and how do they operate.

LPO Locations in the Country

So far, most of the LPO players are concentrated in metros – Delhi, Mumbai, Bangalore, Pune, Hyderabad and Chennai to avail certain benefits. In industry jargon, the National Capital Region composing Delhi, Gurgaon and Noida, is recognized as the ‘Global Outsourcing Center’. On the other hand, Mumbai as usual is the ‘Capital Center’ of the nation where money flows. Interestingly, Bangalore has positioned as an ‘IT Centre’ whereas Chennai and Hyderabad are the 'Knowledge Centers'.

KPO Consultants has recently launched India’s first directory of LPO vendors encompassing most relevant details of all top 100 vendors.

Our consulting team has confirmed that people are now gearing up to set up their shops in the LPO sector even from small places like Jaipur, Indore, Lucknow, Kanpur, Ludhiana, Mysore, Coimbatore, Madurai, Bhubhaneshwar, Patna, Mangalore, Ahmedabad, etc.

Little About BPO Vendors

Selecting the right offshore service provider usually poses significant challenges. India has thousands of existing BPO service providers, all with different but required capabilities. Most of them have the background of call center services and have positioned themselves to become the hackneyed “jack of all trades.” Many of these vendors may claim capabilities in legal services, but often have questionable testimonials and very little experience in legal space. More often than not, their competence lies in the management of back-office functions to clients abroad from diversified industries. They need to partner with lawyers.

Small LPO Firms – Who They Are

Despite consistent media coverage of the Indian LPO industry, attention concentrates on industry biggies. This is comprehensible, given the industry’s top-heavy structure - of about 80-100 LPO firms in India, the top 5-10 have cornered around 70% of the industry’s total revenues of about $80-110 million.

However, little is known about small LPO vendors, such as who they are, from which place they work, who they employ, what market niches they target and what their potential for growth is. But as the LPO segment evolves, the role of small vendors will become increasingly central for the sector’s development and ability to offer new products and services.

Tech-savvy professionals will continue to be appreciated. Lawyers have to be aware of technology as it is the essence of the offshoring proposition.

What Do They Offer

The small LPO firms offer the services for clients abroad mostly at a cost considerably less than the comparable costs in clients’ own countries. These services may include low-complexity tasks such as scanning and indexing of evidence in litigation cases, word processing, database maintenance, legal coding and legal transcription, legal research, etc. Moving up the value curve, the next promising area of opportunity is litigation related document review. They collaborate with a team of experts, use the IT structure and execute the projects. The execution has to meet the quality standards set by the clients there.

Target Segments for Small Firms

Small LPO Vendor Companies give the services targeting UK and US legal business markets. Infact, even in those regions, they talk to solo attorneys, small law firms and preferably legal departments of small companies. These target segments also get energized to outsource their jobs to small vendors from India. They do it for reasons; such as either they themselves are too small to look at biggies of LPO to outsource or they can’t assure regular and larger projects to outsource. On the other side, the vendors make sure; their offerings are economical and loaded with lots of value-added services in order not to allow the clients to hop around.

In fact, the 'real' market for them initially is the number of solo attorneys, small law-firms with 20 or less lawyers and mid-size corporations. Together, these form about 70% of the total business target market for small vendors. As per the statistical data, there are around 0.5 million attorneys in this segment. Strategy to deepen the penetration is must. Even if they target two major states of the US, communicate their marketing message, help the prospects understand the benefits of legal offshoring, project the costs and savings for them; they may establish their footholds there. Once they have succeeded in a state, they expand their footprints to other states as well.

Collaborative Model for Them

It is often thought that LPO firms access global market opportunities through subsidiary companies in foreign markets or deploying marketing team. However, when we tracked their marketing / sales strategies, we found that the intermediary institutions, consultants, trade associations, government agencies and several other mechanisms play a key role in helping them book business with a reasonable investment. The bigger firms are opening up to strategically partner with smaller firms, expert companies or practioners to bring them in their teams to seek their expert services. To make the sector momentous, BPO companies are joining hands with lawyers or law firms. Sub-contracting is becoming the most pervasive norm.

Selling Strategies

They begin with grabbing business originating from managements’ personal networks that have been developed during earlier professional experiences. As they move up the value chain, they consider several options to win work in foreign markets. There may be various mechanisms to communicate their messages to the world at large, such as – connecting with people there who may collaborate, partner with to ensure business outsourcing consistently. They may be their prospects, consultants or even trade partners. Option of deploying marketing team in foreign markets always remains in foresight. However, before they do that, they make their cost-benefit analysis in terms of evaluating the projections of revenue to be generated by team’s endeavors. Framing out appropriate budget is definitely the key aspect. A key person from the management stays there in the target market (US) to help procuring the business. Business relationships are established through following few methods, keeping the costs as low as possible (at the inception):

• Seminars
• Sponsorships
• Lobbying
• Publications
• Community relations
• Blogging
• Business Associations
• Others

They Aim High

It is appreciable that their business models are there in black and white. Their small organizations do not depend upon the personal network-based marketing for a long time. The aim always is to reach the transition level from “network-based sales efforts to business-needed sales efforts”. That’s where the growth comes into the way. Industry endorses; those who are able to generate business successfully from non-personal networks grew in terms of business, team-size, offices, nature of services provided and the revenue.

Bump Ahead

There are few issues in the business approach of small LPO firms too.

Conservative Business Approach

There have been stories about small LPO companies which were shut down soon; as they were not able to develop business beyond their personal contacts. They tried to sustain for few months by pumping in their own money but could not, for long. They need to think beyond the obvious.

General Offerings

Small vendors start doing the same as done by the bigger LPO firms. Unless, they identify with the forte to create a niche in their offerings, they may not sustain for long.

Small Engagements

Small firms currently are not engaged in offering the innovative products but survive on work orders that are picked up by their consultants / marketing team.

Lack of Industry Analysis

People have set up small companies in the LPO space without even understanding the needs of the buyers outside. Chances are; they would revert to their Indian practices soon.

Marketing Efforts

At the inception, the firms don't pump in enough money in the marketing efforts – offline and online. They keep connecting prospects only through their own networks. The strategy may not allow them to get the business quickly. Online marketing helps doing that, economically!

Hampering Growth

The growth of small firms may be inundated by increasing cost of technical labor, infrastructure and high rate of attrition due to poaching in the sector.

Risk Reward Model – What We Suggest

Differentiation is the key to win the business! The small LPO firms may move to a profit sharing model with the clients abroad where they participate in the margins gained by the clients owing to enhanced productivity / time saved in execution / compensation awarded in litigation, etc. We are of the opinion that this ‘new strategy to develop clients’ may prove to be the next differentiator to boost revenues for them. Few of them may accept the model, believing; when they want to grow competing biggies, they have to make their clients grow first by sharing risks with them. Few of them may not roll out the model at all or even if they plan to do so, they would do it for some of the jobs they execute. They, if truth be told, need to see the level of clients, services offered, pricing model, scalability plans and future vision to grow with them.

They would look at the areas where the model may be used. The areas may be litigation support including e-discovery, legal research works, complicated cases support, etc. Considering additional option, they may apply Risk-Reward Model and Flexi-Pricing Model jointly for some of the services offered for all the clients or for some of them.

This strategy would essentially prove to be a paradigm shift towards luring the attention of clients basing upon providing solutions by participating in the risks and gain of clients.

How Can You Set up an LPO Shop

LPO certainly is an independent business line and you as an entrepreneur (lawyer or ITES vendor) have to weigh the pros and cons of the business while venturing into the sector. You can’t dare to enter the industry blindly otherwise little beyond, you would realize that you are not able to cope up with the challenges which could have been turned into opportunities. Infact, by that time, there would not be any chance to get back.

Each arrangement that you do must be specific and unique in itself and lawyers who are part of each deal should be experts in that particular vertical. That is what determines your ability to become experts in what you do and in turn, you get more businesses.

Robust connectivity, brand positioning and frequent visibility leading to business networking would help you luring the attention of prospects. So, there has to be something stimulating and appealing to keep you go on!!

To know more, visit us at www.kpoconsultants.com.

Author: Seema Avasthi, Consultant, KPO Consultants

About KPO Consultants

KPO Consultants is the pioneer consulting company which provides business solutions exclusively to the LPO industry. We work with the established and aspiring LPOs to set up their LPO ventures and overcome their complicated business problems and also help management make big decisions affecting top line growth of their company. KPO Consultants offers consulting in areas of strategy, operations, technology, marketing and sales, h uman resources, and strategic alliances. We also provide end-to-end support across entire business lifecycle; building business synergies from the scratch till realization of its benefits and ongoing developments. We have served several clients in the United States, the United Kingdom, Singapore, Philippines, Mauritius, India, Canada, Australia, and many more countries.

For more information, please visit our website www.kpoconsultants.com or write to us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .