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Insights from the Economist on the LPO industry in India

A piece in the redoubtable Economist, June 26, 2010 at 69, concludes that cost-saving efforts in the West and systemic improvements in the East continue to favor the Indian legal process outsourcing industry (LPO). They cite a study by ValueNotes that “estimated that India’s LPO revenues will grow from $146 million in 2006 to $440 million this year and $1.1 billion in 2014. The LPO activities in all of the rest of the world are but a fraction of these amounts, I would venture to add.

While specifically referring to CPA Global and Integreon for massive agreements those two firms have signed of late, the article estimates that the number of Indian firms offering LPO services “has swelled from 50 in 2005 to more than 140 today.”

The article also states that in February Actis, a British private-equity firm, invested $50 million in Integreon and recently Intermediate Capital Group, also based in Britain, “bought an undisclosed chunk of CPA Global.” You have to wonder, as LPO providers move up the value chain of legal-related work, whether this will lead to “law firms” financed not through the stock market just yet but through third-party financing.