Indian offshore firms court lawyers to lift margins

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BANGALORE (Reuters) - Close to the rugged farmlands of Haryana near Delhi, dozens of shirt-sleeved graduates are busy at work in an office park.

Much of this work at a firm called Evalueserve in the town of Gurgaon is the same as is done thousands of miles away in wood-panelled Manhattan law offices by young attorneys, some of whom command six-figure dollar salaries.

Although Indian lawyers cannot argue in a US court, local start-ups reckon they can take on much of the legal back-office burden, such as filing patents that mix high technology and US law -- the latest in the outsourcing wave that uses high-speed telecoms and low-wage, English-speaking Indians to save Western firms hundreds of millions of dollars a year.

"The only thing that can't be outsourced to India is something that requires physical presence," said Sanjay Kamlani, co-founder of Pangea3, a firm employing 23 lawyers in India and five in the United States, plus technical engineers.

Kamlani insists that training Indians for US law is easy.

"Both the US and India were British colonies and common law is British," said the US-based lawyer of Indian origin whose firm has 20 clients helping in legal document management, contract drafting, legal research and patent filing.

According to India's National Association of Software and Service Companies (NASSCOM), India has so far tapped only 2-3 percent of an estimated US$3-US$4 billion US market of "outsourceable" legal services.

Pangea3, named after the single landmass of ancient Earth that eventually broke into the continents, says US clients can hire Indian lawyers for US$100 an hour for tasks costing US$300-US$400 in New York.

For Indian legal service firms, intellectual property work related to the technology industry that spearheads India's US$17.2 billion software and back-office work exports has been an early opportunity.

Dutch electronics giant Philips has quietly been hiring Indian PhDs to comb scientific databases and file patents from Bangalore, while Evalueserve employs 120 people, including doctors and engineers, for mainly patent-related work.


Work here, negotiate there

Evalueserve chief executive Alok Aggarwal said Indian "paralegals" earn US$10,000-US$12,000 a year -- a fifth of their US peers. But wage increases over the next three years will narrow cost gains to 40 percent from 60 percent now.

The paralegals earn salaries comparable to young software engineers at companies such as Nasdaq-listed Infosys, one of the pioneers of India's white-collar boom.

In India, lawyers are lower down the professional pecking order than in the United States.

Aggarwal expects legal service revenues to grow by 20-25 percent a year. Evalueserve, which has so far helped file 600 patents, expects to have 1000 legal service workers by 2010.

Law firm Nishith Desai Associates has created a new company, IP Pro Pvt. Ltd, to separate its service work from court work.

Vaibhav Parikh, a director at the firm, says 20-30 percent of lawyers' work involves drafting or negotiating pacts, of which 80 percent can potentially be moved to offshore centres.

But he said most Indians lack the critical negotiating skills of their US counterparts and Indian law firms need to make sure they do not compete with US law firms.

Among the easier legal services tasks is back-office work related to law in publishing and research.

Datamatics Technologies has been in content management for a decade, helping legal information providers create databases and refine searches using its software. It has about 150 people in legal work, 85 of them software engineers.

Chief executive Manish Modi sees his staff doubling in 18 months and business tripling in three years.

"Whether it's an attorney's back-office in downtown Boston or Mumbai, it doesn't make a difference," Modi said, referring to India's financial capital, formerly known as Bombay.

Pangea3's Kamlani earlier co-founded OfficeTiger, a firm based in Chennai -- as Madras is now known -- which offers scanning, coding, drawings, form processing, proof-reading and financial services for legal firms.

Jason Brennan, an OfficeTiger director, said US law firms spend about US$20 billion a year in support services which most law firms would be happy to "let go", and even 10 percent of this would be a big market.
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