As the global economic downturn becomes ever more turbulent and India-based legal process outsourcing providers report increasing workloads, many are predicting they will have to raise staff levels to see them through this era and beyond.

The downturn is accelerating the move towards legal process outsourcing (LPO) in two ways. Increased pressure on costs is focusing in-house corporate counsel and law firms on finding more cost-effective approaches for much of their legal work, including litigation support, document review, legal research as well as other areas such as corporate governance, risk assessment, official complaints and legal analytics. At the same time, the fall out from the crisis is leading to growth in litigation, as well as work around insolvencies and mergers and acquisitions.

This activity in the Indian LPO space would not have been possible without a range of key elements combining over time to form a solid foundation. The availability of skilled, English-speaking lawyers – who are responsive to training in specialist disciplines – has built an infrastructure that is now sufficiently experienced to understand the sector’s conventions, and help those conventions evolve. The time-zone difference between India and the West has fostered continuous working practices, in which large volumes of documentation can be processed more efficiently. And security measures have grown sophisticated enough to assure clients that – thousands of miles from their corporate headquarters – their data is safe.

With the fallout from the global credit crunch taking unpredictable turns, Western firms have been able to look to the Indian LPO space with the confidence that it can offer relief while markets strive to regain stability. Confidence in the industry is bringing work, and the work is calling for skilled personnel. India’s Economic Times reported recently that leading legal outsourcing provider CPA Global will see an increase in the staff levels of its Indian knowledge base from the present 400 plus to around 2,500 over the next two years.

CPA Global’s vice-president, business development, Andrew Loach, commented: ‘Our legal outsourcing offering is our fastest growing unit. With multi-jurisdictional litigation on the rise and increasing pressure to keep legal costs down, more law firms and in-house counsels are turning to legal outsourcing as a viable solution to increase efficiency, manage risk and cut-costs.’

LPO is proving to be an important ingredient in the success story of India’s economy. US assistant commerce secretary, David Bohigan, has pointed out that the story is cutting both ways, with Indian companies achieving greater market prominence in America and boosting the US economy on its own turf. On a fact-finding mission to India last month to assess opportunities for clean energy ventures, Bohigan revealed that around five million Americans rely on Indian companies for their livelihoods.

Massachusetts-based industry analyst, Forrester Research, predicts that around 29,000 legal jobs will move from the US to India by the end of 2008, rising to 35,000 by late 2010 and hitting 79,000 by 2015. It is plausible that, by then, the economic outlook will have improved, allowing domestic hiring to pick up again. In that climate, though, restructuring efforts in law firms and in-house counsels’ offices are likely to produce more strategy-based business models.