India's outsourcing industry: An uncertain future?

“Legal outsourcing may benefit from the Trump regime”

TDB(The Dollar Business): What kind of legal services does Mind Merchants LPO provide and which countries do you cater to?
Dilpreet Sidhu:
We cater to the legal departments of companies across US and UK markets. We primarily deal in para-legal services and software. We create custom software for corporations so that they can better manage their legal departments. Our products and services are aimed at streamlining legal functions for clients through innovative and cost-effective software.

The global legal outsourcing market is currently pegged at about $4 billion. Besides India, Philippines, Malaysia and Singapore account for a major market share. The industry has been on a steady growth path for the last few years and now with Donald Trump becoming US President things might get even better. While other outsourcing functions might get affected, legal outsourcing may benefit from Trump administration.

TDB: How does it seem beneficial to you, especially when his election campaign rhetoric has been all about stopping work from going outside the country?
Dilpreet Sidhu:
Well, at the same time, he is stopping immigration, stopping immigrants from entering US. So, when there will not be enough skilled labour in US, which was being supplied by India and other countries, ideally you would bring the people in or outsource the work. So, the mathematics is pretty obvious.

TDB: So, you do believe there is a silver lining in him stopping immigration?
Dilpreet Sidhu:
Either you let people in or send the work out. And there are reasons outsourcing is happening in the first place. There are two reasons for this – first, cost effectiveness, and second the required skills are missing in American citizens. Indians have the skills, so either allow Indian workers in or send the work to India. As far as pricing strategy is concerned, it will always remain the same. If a company can outsource work for a lower price, it will never go for a higher price just because it cannot outsource the work. It will find a way out. In fact, many US companies have already started setting captive units in India, so they are not typically 'outsourcing'. They are only creating another unit in India which is doing the work for them (the American entity). So, there are ways around it. Hence, the outsourcing will not be impacted in big way.

TDB: But what if Trump stays true to his words and prevents both, work from going outside US and people from coming in? Do you have a contingency plan in place?
Dilpreet Sidhu:
I think it will take a long time for a US company to build such kind of capabilities. When it comes to law, there are three elements – one is federal, another is the state law and then there are a company’s internal policies. For instance, when it comes to training and building talent, it is a federal issue. The entire country needs to work towards it. But at a company level or state level, you will start benefitting only when such policies reach that level. And I don’t think that in Trump’s tenure that can be achieved. However, if the Trump administration makes some efforts towards this, it may also happen eventually. But, I don’t personally see any of that really materialising. There might be some big M&A deals that may be stalled out of fear.

TDB: Have any of your American clients expressed any concerns about this?
Dilpreet Sidhu:
They are hoping that Trump doesn’t do anything that will stop them from outsourcing because they love it so much and it works well for them.

TDB: We don’t hear much about LPOs when compared to BPOs and KPOs. Why is it so?
Dilpreet Sidhu:
This is because legal outsourcing poses an ethical dilemma on US attorneys and it is still a taboo word for the US attorneys. It's hard for them to say that they are taking help from an Indian attorney, so they avoid calling it legal outsourcing. Instead, they still call it procurement of legal services or legal support services from India. Say, if Disney were to transfer two million legacy contracts that had been lying with them for quite some time and they need to migrate them into a new system they just acquired. Since they do not have the in-house capability to do that, they have to engage a third-party to get it done. But, they would not call it legal outsourcing. They would just say that they are engaging a company in India for legal services. In fact, we recently completed a similar project for Disney.

TDB: How do you manage issues like perceived loss of security of legal documents?
Dilpreet Sidhu:
There are a lot of Indian legal process outsourcing (LPO) companies that have captive units in US and Australia. So, at the end of the day, if the document is very sensitive and the client is not comfortable with the document leaving the country, the Indian LPO sets up a local unit and gets it done.

TDB: So, in conclusion, you don’t think Trump’s Presidency will have any immediate impact on the LPO industry?
Dilpreet Sidhu:
No. The BPO industry, which has the largest chunk of the pie, may see some negatives. They may get impacted initially. But by the time the policy trickles down to the KPOs and LPOs, we don’t see Trump being there anymore!

Source: The Dollar Business Magazine

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