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The US is the largest trading partner of India. Indo-US trade relations have been strengthened following the liberal policies adopted by the Indian government to promote foreign direct investment (FDI) in the country in the early 1990s.In recent times, Indo-US trade has increased by 25%, indicating ample scope of growth for Indian companies. Indo-US bilateral relations have been further consolidated by the growing presence of the Indian SMEs in the US. Significantly, an increasing number of Indian SMEs in the legal process outsourcing (LPO) sector can be attributed for fuelling this growth.
The market size of the Indian LPO business is estimated at around $200-250 million. With Indian LPOs growing at a steady rate, the industry is projected to achieve the $4 billion mark by 2015.
In the past few months, the ongoing recession in the US economy has taken a heavy toll on the business of Indian companies across verticals. However, in sharp contrast to the SMEs in other sectors, small LPO players in the country are finding the downturn to be a blessing in disguise due to huge amount of litigation work coming their way from the US.
With leading investment banks, large corporations and finance companies going bankrupt in the US, the demand for legal services has increased manifold. In these uncertain times, American firms are spending a considerable amount on legal outsourcing to review their risk factors, project terms and contracts. Indian SMEs in the LPO business are thus gaining from the high-end services that they are offering at competitive rates. In fact, these rates are providing the Indian SMEs an edge over their American counterparts.
Industry Experts expect the Indian SMEs in the LPO space to gain further momentum in the near future. This is because the volume of transactional work in the domains of compliance, foreclosure, bankruptcy and litigation is likely to grow in the coming months.
Indian LPOs dealing with the US companies operating in India can also increase their turnover by gearing up to meet the anticipated demand for litigation related to post-meltdown issues. These include organisational restructuring, rightsizing, closure of branches, winding up of subsidiaries and serving termination notices to collaborators and franchisees.
Apart from the litigation work, these firms can provide intellectual property (IP) support services such as drafting, contract reviews, patent searches and applications to attract more clients.
Hence, these tough times are proving to be an opportune time for the Indian LPO industry to become the next sunshine sector for the Indian economy.
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