Years of new compliance requirements that force US companies to maintain strict standards around retention of corporate documents is creating a massive opportunity for legal outsourcing. The question is: Are Latin America outsourcing providers prepared to tackle this emerging market?
India continues to lead the world as a legal sourcing destination, but the Philippines and South Africa are coming on strong. Part of the appeal with South Africa is the time zone suitability with UK companies who also have their hands full with regulations like Basel II. There is no question corporate legal teams would just love to be able to collaborate in real time with legal experts in the Western Hemisphere, but at the moment the Nearshore region has not made legal outsourcing a priority.
The practice of legal outsourcing is estimated to be a $2 billion market. According to this ComputerWorld article, offshore legal professionals charge hourly rates of about half of the $600 per hour a US legal expert might charge. The other symptom of the burdensome legal workload at US companies is that some key functions are being off-loaded to IT staffs who frequently don’t have the legal understanding of the core issues around E-discovery. Macro-level changes in the legal profession are also happening at a quicker pace, and 2010 is seen as a “watershed” year in the profession.
All of this adds up to a simple question: Are Latam providers seeing this opportunity? If I had to pick, I would say Panama may be one of the best poised nations to meet the need. The legal system in Panama closely resembles that of the US and the steady rise of its professional working class could be a key underpinning of a new services industry. Clearly, Chile with its robust KPO offerings has to be one of the stronger candidates in the region.
What other countries have these capabilities, and for those IT providers in the audience, is your firm poised to expand into this niche? Share your thoughts, or send me an email: Kirk@NextCoastMedia.com