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Exported Expertise
Lawyering Long-Distance
Barron's
December 22, 2008

HIRING MAY BE FALLING IN THE STATES
, but there are pockets of growth in outsourcing businesses, and one is the legal profession. That's right: Even as U.S. law firms are cutting bonuses, if not jobs, the market for legal-process outsourcing is about to pop, says Abhi Shah, chief executive of Washington, D.C.-based Clutch Group, which oversees some 330 lawyers in the U.S. and in India.

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William Waitzman

The growth areas, Shah says, include SEC-related work in areas such as compliance and anti-money-laundering, foreclosures, and discovery for litigation. With market values collapsing, "Securities-fraud litigation is the biggest thing coming down the pike," says Shah. Then there will be compliance related to new legislation linked to the bailouts: "This will trump Sarbanes-Oxley," he exclaims, referring to the law that was supposed to improve transparency.

Don't forget bankruptcy. Shah says legal fees from Lehman's bankruptcy alone were north of $900 million.

Shah won't disclose his private firm's revenues, but he says that at the moment, the market for legal process outsourcing is about $250 million, with 75% of clients in the U.S. He thinks the market will total $640 million by 2010.

Credit the cost differential. Shah has 230 lawyers here and 100 more in India. A lawyer in the U.S. might charge anywhere from $300 to $1,000 an hour, but those in Clutch Group bill somewhat less, because they work shorter hours and have a better quality of life, says Shah. In India, they bill $30 to $100 an hour. "We are growing 100% a year, and that will go on for the foreseeable future."

-- Leslie P. Norton