WNS bets on legal outsourcing

NEW DELHI: WNS, a NYSE-listed business process outsourcing (BPO) major, is seeing a huge momentum in legal services.

Riding high on the legal process outsourcing wave, WNS has started legal services in Sri Lanka about eight months back and now has over 30 lawyers there. It has also scaled up the existing Pune operations, with more than 80 lawyers to handle the legal services, says Smita Gaikwad, company spokesperson for WNS.

Global spending on legal services is estimated to be at least over $250 billion, with the US accounting for more than two-thirds of the market. Conservative estimates of the current market potential for legal services outsourcing from the US alone are pegged at $ 3-4 billion. This comprises paralegal and research support, contract drafting and revising and contract management, library services, patent and trademark prosecution and litigation support.

Even though legal services segment is relatively newer, it is believed to have significant market potential. Market trends indicate that several international law firms, legal publishing companies and legal research firms are now sourcing legal services from India. Says Sunil Chandiramani, national director, risk and business solutions, Ernst and Young, “Since legal process offshoring is high up in the value chain, it will see exponential growth over the next five years because the value margin is significantly higher there, as compared to voice or transaction services.”

Increasing maturity of the BPO industry has prompted businesses to review their service delivery models and to seek ways to leverage resources from lower cost offshore locations. “India, definitely stands to gain from this,” says Gaikwad.

With an educated and skilled workforce, the low-rung BPOs have graduated to special BPOs or KPOs, and as specialists from various fields like insurance, law and travel join these KPOs, they have an edge over other low-cost destinations like Phillippines, Vietnam, etc, adds Gaikwad.

One thing that is evident is that BPO has matured into a huge business. A report by McKinsey and Nasscom says India’s BPO export revenues will surge 37% by 2010, to touch $25 billion, from the current $7.5 billion.

According to a study undertaken by Hildebrandt International and OfficeTiger in 2004, the top 200 firms in the US spend over $9 billion (45% of their total annual spend of $20 billion) on these services. It is understood that significant portions of these services may be delivered from offshore locations achieving savings of 30-70%.