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January 15, 2010 2:30 PM

Inside India's Legal Outsourcing Machine

Posted by Brian Baxter

A Times of London story Friday takes readers inside one of the largest legal outsourcing shops in India, staffed by talented young lawyers that are changing the way international law firms operate.

The ToL piece focuses on Pangea3, an outsourcing firm based north of Mumbai, where an army of young graduates from India's top law and engineering schools toil in a complex that the paper likens to the bridge of the Starship Enterprise.

With none of the workers wearing suits and the distinctly non-Western atmosphere surrounding the corporate park where Pangea3 is headquartered, the environment couldn't be more different from that of a firm on Wall Street or Canary Wharf, the ToL reports. But that doesn't mean Pangea3 isn't linked to big money.

The company's investors include Sequoia Capital, the same venture capital firm that once backed a little Silicon Valley upstart called Google. (Other big names in the legal process outsourcing--or LPO industry--include Clutch GroupCPA Global, Integreon, and Mindcrest.)

Pangea3's clients include several Wall Street banks and the small salaries it pays its employees compared to the six-figure sums spent on young lawyers at Am Law 200 and Magic Circle firms, means that Pangea3 is having an easier time selling itself to clients looking to control their legal costs.

The ToL story includes contrasting interviews with a Pangea3 employee who graduated from one of India's top law schools and a Norton Rose associate about the future of their respective jobs.

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We, lawyers,have done this to ourselves. We have forgotten the essential rule of any business operation be competitive. The law industry, especially the large firms, I have always been sole, during their heyday, mid 60's to late 90's (this abuses far pre date 2007), have ignored clients and regularly over billed. Not that the hours billed were not expended, but were they needed, and more importantly were they in the client's best interest or the interests of his lawyer.(READ Grisham's books). You now have to live with the fruits of our garden. I feel for you.

This trend--saving money for clients of legal services--has been going on for more than a decade. Temporary lawyers, outsourcing law firm's "low hanging fruit" type work and lately, the departure of stellar partners from AmLaw 100 type law firms are all manifestations of this. The model is changing and it looks more like Wal- Mart than limos to drive all the late night working senior associates to their homes in the suburbs after a long day at the office.

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