Monday, December 22, 2008
The ABA Is Killing Us
The document reviewers have already been cooked and carved up for Thanksgiving.
Think you can run off to shitlaw to avoid the slaughter? Think again. The Indian LPO's are now aggressively going after the foreclosure banks and insurance companies for work.
"Another firm, Pangea3 LLC., says its revenues in India doubled in size in the first quarter, and doubled again since then.
Firms have already started handling related reviews of bank assets. UnitedLex, for example, has seen this area of its business grow by 50% since late March, according to Ajay Agrawal, founder and chief solutions officer. 'There are millions of assets shuffling hands, and a lot of work,' says Agrawal, who specialized in asset-backed securities as a lawyer in the US.
It’s not just the highly technical work of reviewing complex derivatives that offshorers are gunning for. Home foreclosures and individual bankruptcies have generally been processed by local lawyers. Bits of the work, on loans held by banks with captive centres in India, have previously moved offshore. But now, with almost 280,000 foreclosures in October alone according to RealtyTrac Inc., up 25% from the same month last year, and up 5% from the month before, even after several states mandated delays on foreclosures, the momentum for offshoring has clearly been building up.
'Volume is a huge driver over the past 18 months, and it still has not plateaued,' says Agrawal, who claims that the foreclosure and bankruptcy processing business at UnitedLex took off at the beginning of the year, and has doubled every quarter since.
Bangalore-based Clutch Group is aggressively pitching itself for a newer piece of this market on foreclosures, one that requires court intervention and typically hasn’t come offshore yet. Lenders spend around $1,000 on this type of foreclosure in the US, and the firm estimates that around 60% of the work done before the lawyers file the case is now segregated and can be brought to India."