PANGEA3 LLC

Bloomberg News recently did a story on the LPO industry : “BLOOMBERG STORY”.

The Bloomberg piece is well researched and well-written, but I think it misses the point.
The article accurately quotes me as saying that some law firms come to us at their client?s urging, while other law firms come to us on their own initiative in search of creative ways to help their clients. The article also accurately notes that about 80% of Pangea3?s clients are in-house legal departments, rather than corporations.
But the article?s headline and focus on law firms misses the point ? namely,
that legal departments at literally hundreds of US, European and Japanese corporations are quickly turning to offshore legal outsourcing as a way to increase efficiency and morale, get more done and cut costs.
The size and speed of adoption cannot be overstated ? it?s massive and rapid. So while Jones Day
and Kirkland & Ellis?s use of offshore legal outsourcing might make for an eye-catching headline, the real action, and the real story, is taking place every day in the legal suites of many of America?s (and Europe and Japan?s) household names.
These corporations, long accustomed to offshore outsourcing in other areas, are quietly but
consciously moving millions of dollars of legal work to India, to the benefit of their shareholders and underlying customers and clients. It?s a positive sign of the times that the press views corporate outsourcing as a non-story, and that only law firm outsourcing can get people?s attention.

I read a post the other day on Yahoo’s lit support group message board where the poster publicly thanked all that there were still domestic reproduction shops that could compete with all of the offshore coders that seemed to be plaguing him, and it made me think about why someone felt it necessary to make such a comment. Actually, the poster’s original request sought repro houses that kept everything under one roof. Presumably, the poster had chain of custody concerns; I don’t know; he didn’t say why he wanted the self-contained one shop coding op. The odd part was that it didn’t appear that the poster even wanted to find a coding operation in a certain location; he just wanted to identify on-shore all-in-one coding shops.

Regardless, that post bothered me. I didn’t like the jingoistic undercurrent running through its seemingly fresh realization that, yes, Virginia, there are onshore reproduction shops that can copy and process your data all in one place in America! I know that companies have provided offshore objective coding since the 1970s and the Filipino pioneers have been joined by others in India and other low cost jurisdictions. But are they the norm or the exception? So why the hostility?

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Pangea3 LLC, the global leader in legal process outsourcing to corporate in-house counsel and U.S. law firms, announced today that it has closed $7 million in Series C funding, funded by Sequoia Capital India. Sequoia Capital’s investment underscores the significant demand among legal departments and law firms for outsourced
legal services as a solution to increasing legal fees. Sumir Chadha,
managing director of Sequoia Capital India, will join Pangea3’s board of
directors.

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Pangea3 LLC, the global leader in legal process outsourcing to corporate in-house counsel and U.S. law firms, announced today that it was ranked the foremost legal process outsourcing provider worldwide in the renowned “Black Book of Outsourcing.” Pangea3
received the top honors over a pool of 102 legal process outsourcing
providers nominated for consideration.

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Local bar associations in California and New York have jumped into the legal outsourcing fray by issuing the first public advisory opinions impacting the offshore outsourcing of legal services, known as legal process outsourcing (LPO). The Florida Bar is poised to join the fray by issuing its own advisory opinion later this year and is currently collecting comments from its members.

These opinions specifically or implicitly, react to the rise of LPO in India; and offer guidance to their members on if the they can outsource legal tasks for their clients to foreign attorneys and if so, then how. The opinions uniformly caution their readers to what appears to be extreme due diligence and exercise an ambiguously defined “control” over the outsourcing process.

But to paraphrase the Bar, these opinions are full of sound and fury, and signify not much; at least not much more than sanctioning what attorneys should be doing on a daily basis anyway. If these opinions do anything, they answer the technical question of whether the retaining attorney has to disclose to his client that he?s outsourcing a portion of the legal work the client retained him to do. (Short ethical answer = maybe. Smart business answer = Yes. We?ll leave that issue for another post.)

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Three years ago when Pangea3 started selling legal services from India, there were only 5 other companies in the space. Today, having just secured a $7 million investment from Sequoia Venture Partners, Pangea3 continues to pull away from the pack of more than 60 LPO vendors. In recent months it has become increasingly clear to us that our industry is at a turning point.

Here’s why:

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Q: “If its so easy to do legal work in India, how come I’m not hearing about big cases being done there?”

A: “Because you’re not listening carefully.”

Pangea3 has completed several document reviews of over a million pages. One recent review involved 95GB of electronic data and over 4.5 million pages.
We completed the review in under 16 weeks for a cost of less than $500,000.
And we did it working hand in hand with a very happy outside counsel.

We’ve done pharma.

Manufacturing.

We’ve done financial services.

We’ve reviewed for privilege. We’ve reviewed for relevance. We keep the privilege logs. We escalate problematic documents for further discussion.
In short, it looks and feels like on-shore document review for a fraction of the cost and a dramatic increase in speed and accuracy.

Ain’t life grand?

One thing law firms fear almost as much as angry Circuit court judges are fixed fees. Historically, law firm partners and law firm management like to keep risk squarely on the client using the taxi cab model. Get in and start the meter. Traffic? The client pays. Construction? The client pays. An accident? The client pays. The taxi stops, hours are totaled and the client pays the bill.

There’s a better way for clients and for firms.

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