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Appointed as CEO of the LPO major Integreon in 2011, Robert Gogel brought with him over three decades of experience in the field of technology and consulting services. In this e-mail interview with Bar & Bench, Robert Gogel shares his views on trends in the LPO industry, the recent reorganization at Integreon and the future of the LPO industry in India.
Bar & Bench: What is your outlook of the LPO industry, in India and globally, in the next 3-5 years? Do you see areas such as patent filing, regulatory compliance etc growing in India?
Robert Gogel: Geographically, the US is the largest market today for LPO but we see the greatest growth occurring in the UK and Australia. For the US and UK, demand is largely split between onshore and offshore service delivery. Onshore services are still a fairly recent development as the market continues moving into a mainstream adoption phase. We do not anticipate onshore actually replacing offshore, but it has been appealing to some clients who may feel onshore presents a less risky model for outsourcing. In some cases, export control regulations may trump the consideration of offshore services.
The kind of legal work being outsourced to LPO providers includes e-discovery and document review, intellectual property support, compliance, legal research and drafting. The greatest demand we see is for e-discovery and document review services and the greatest growth appears to be in contract management and review and compliance. The smallest is intellectual property support, which is a newer service area.
Litigation support has always been a major revenue area for LPO, but compliance has recently come into the spotlight too. This is more than assisting clients with responses to regulatory investigations and can include proactive support, for example conducting audits of suppliers in order to help ensure compliance with the US Foreign Corrupt Practices Act.
Historically, LPO has been about reducing legal spend, and it still is, but now we’re also seeing increasing awareness of how LPO can improve processes and bring greater value to clients. We believe cost and compliance pressures will drive further exploration of alternative models to deliver legal services over the next few years. We also see this increasingly taking the form of three party partnerships between corporate legal departments, outside counsel, and LPO providers. Longer term, this could even lead to alternative business structures between law firms and LPO providers in certain markets, particularly the UK.
B&B: You reportedly had revenues of $150 million in 2011. Has the slowdown affected this number or do you actually see an upturn in revenues as law firms look to economize costs?
Robert Gogel: As a privately held company, we do not publicly publish or announce financial results. We have a diverse mix of client revenue with our four business units – Legal Services, Business Services, Document Services and Research Services – and we have seen varied activity in these businesses the last two years. For instance, our Business Services revenue would have declined since 2011 because we have helped our UK clients find facilities management and other vendor resources to replace work we were doing for them originally.
Meanwhile, we have seen our document services and LPO businesses grow, mostly due to a continuing desire on the part of law firms and corporate clients to improve process, increase compliance and economize costs. Our e-discovery business is largely dependent upon trends in litigation and we have seen that market ebb and flow over the years. In our research business, we continue to experience success with our consultative approach that incorporates all of the benefits of an offshore delivery model (India, Philippines and China).
B&B: Indian law firms have experimented with their own LPOs with little success. A few foreign law firms, however, have made progress in this field. Do you see more law firms taking such initiatives? Any reasons why previous attempts have failed?
Robert Gogel: We have seen some law firms opt to create their own captive LPO operations rather than working with an outside LPO provider. We see this as a natural evolution in this growing market and that over time, based on the investments required to run captive operations with scale, many of these firms will eventually migrate to using LPO providers. The shared services model of LPOs is simply more sustainable financially and ultimately better serves law firms which are under considerable pressure to reduce costs and stay competitive. Corporations are no longer willing to subsidize inefficient law firm operations. We also see a growing trend of corporate legal departments pushing or even requiring law firms to work with LPO providers. For a public example of this, see http://bit.ly/HNhY1A.
B&B: In a 2012 interview, Sanjay Kamlani and David Perla of Pangea3 had said that India remains an attractive hiring ground partially because of the large number of law graduates. Thoughts?
Robert Gogel: Increasingly Indian lawyers, paralegals, and law graduates are seeing the career advantages of a path in legal process outsourcing. We have many India-based professionals today working on higher order tasks such as contract management, drafting, and review, due diligence for mergers and acquisitions, patent support for intellectual property, and other types of work. There are also opportunities for advancement into management positions. This trend is not just limited to India, but is a global trend. But with India in particular, there is a real appreciation and level of excitement for what outsourcing is and the value it can bring to an organization. So yes, India does remain a key area of recruitment for Integreon.
B&B: Earlier this year, Global COO Lokendra Tomar, left the company and joined Elevate Services amidst reports of a disagreement with the top management. The Integreon website does not indicate a post of COO existing at the moment. Was that because of Tomar’s exit?
Robert Gogel: We don’t comment on individual departures or reasons for the same. At the end of 2012, we made a decision as a business to organize around client facing business units, and created four business units: Legal Services, Business Services, Research Services and Document Services. We appointed heads of each of these units, and each BU head manages the entire P&L of the unit. These organizational changes were made in order to improve our ability to delight clients with our services, and we felt that the prior organization approach was not providing desired impact on our or our clients’ businesses. The resulting organization was not driven by any particular organizational vacancies or departures, but instead was the output of analysis and discussions with our management team and board of directors as to the best way to drive Integreon’s success.
B&B: Lastly, what is the investor climate in terms of the Indian legal market? Have you noticed any perceptible change in the recent past?
Robert Gogel: As the LPO market matures, naturally the intensity of investment and growth in this area will tend to slow somewhat, but this does not signal a lessening of client demand. To the contrary, with increasingly mainstream adoption in the US and UK and now strong interest appearing in Australia, we foresee continuing investments being necessary in India. India remains an important part of our operations and delivery capabilities globally.