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Turning East
By Larry Teitelbaum

One night in 2003 old law school roommates David Perla, C91, L94, and Sanjay Kamlani, L94, met for dinner in Manhattan. The discussion turned to a subject Sanjay had given a lot of thought. An animated Sanjay told David that India could provide all sorts of professional services to the West, things that go well beyond the stereotypical call centers. Then he began to tick off a few areas: Equity Research...Credit Analysis...Financial Services...

Sanjay Kamlani, L94, (second from left) conducts a meeting at the offices of Pangea3, which provides Indian-based legal services to U.S., British, European and Japanese companies. Kamlani runs Pangea3 with David Perla, C91, L94 (far right).David PerlaNone of this made much of an impression on Perla, then general counsel at Monster.com, until his friend mentioned legal services. Thats when Perla perked up, blurting, If you give me a team of Indians for half the price I could probably outsource my entire legal team. At which point Sanjay looked up from his plate and said: So why dont we do that?

And thus was born Pangea3, which delivers Indian-based legal services to U.S., British, European and Japanese companies. Kamlani and Perla launched the company in early 2005 with confidence that they could attract clients who were tired of paying top dollar per billable hour. And they were right.

In its first year, the company grossed a mere $500,000. But today, Pangea3 commands a $10 million slice of the multimillion dollar market and employs 275 people. The company maintains offices in New York, Mumbai and Delhi, and retains account managers in Philadelphia, Washington, D.C., San Francisco, and smaller cities in India. Up ahead lies nothing but blue sky, despite, or perhaps because of, the economic downturn.

Id rather be in my business than any other, says Perla. The reason clients come to us is cost. They want to save money or they want to do more with the same budget.

Indeed, clients pay considerably less when they hire Pangea3 to conduct patent searches, handle compliance and risk management, or review contracts, to name a few of the services offered.

Kamlani says U.S. companies who pay $150 to $600 for homegrown legal services can get the same quality of work from India for $25 to $75 an hour. Most of the time, however, Pangea3 assigns teams on a retainer or charges by project.

The lure of such savings has prompted a wave of company legal depar tments, as well as law firms, to tr y Pangea3. At any given time, Pangea3 serves more than 100 clients in the financial services, technology, retail, food and beverage and other industries.

Lucasfilm Ltd., producers of the Star Wars franchise, has been using Pangea3 for about three years. General Counsel David Anderman, C91, L94, says Pangea3 installed a seamless contract management system through which the company turns around work with impressive speed. The great part is, you send it to them during the day, they take it and work on it overnight, and the next morning when you come in, youve got a draft contract sitting in your inbox.

Kamlani has a busy inbox himself. Based in India, he manages all services including the recruitment of lawyers. Perla, located in New York, runs the client development, marketing and communications operation. Perla and Kamlani had a great advantage when they started their outsourcing business: They knew the Indian market cold. As head of mergers and acquisitions at Monster.com, an Internet job service, Perla had closed a number of deals in India. Kamlani began his career at PricewaterhouseCoopers as an adviser to U.S. multinational companies doing business in India. He later was a co-founder of Office Tiger, which hired Indians to handle word processing projects for investment banks in America.

The thought of sending confidential M&A documents to India to save on word processing was considered blasphemy, says Kamlani, a Miami native who moved to India in 2005. What Im seeing in the legal services industr y is similar. Were at a point where just about every in-house counsel department understands what legal process outsourcing is all about and is thinking hard about how to make it work for them.

Of course, law firms and associates may not be as sanguine about a business model with the potential to drive down revenues and cost jobs as many as 50,000 by 2015, according to one study. But Perla sees Pangea3 and its competitors as soldiers in the vanguard of reform.

(Were) finally forcing the profession to execute on their desire to be creative in how they approach their clients, says Perla. Law firms have been talking for years about an alternative to billable hours. Well, its arrived.