Value Chain Analysis in Legal Outsourcing, By Arun Narasani

VALUE CHAIN PERSPECTIVE IN LEGAL
OUTSOURCING INDUSTRY
By, Arun Narasani,
Co-founder/CEO, Brain League IP Services
www.brainleague.com

BRAIN LEAGUE
 Boutique IP services and consulting firm
 50+ patent engineers and attorneys
 Presence in US and India across four offices
 Clients in US, Europe, and India
 60+ partner law firms around the world
 Single point IP solutions
© Brain League IP Services

AGENDA
 Offshore outsourcing
 Value chain and human resources
 Challenges
 Emerging trends
 Example
 Considerations in choosing a partner

OFFSHORE OUTSOURCING

ONSHORE VS OFFSHORE
 Regulatory framework
 Risk vs reward
 Experience
 Incremental vs leap
 Cost savings
 Control vs focus
 Outside cousel
 Threat to bottomline vs margins

ONSHORE VS OFFSHORE
 In-house counsel
 Job security vs value addition
 Capacity requirements
 Stable vs varying

OPPORTUNITY – EXPORTS IN 2011 ($BN)
45
14
0.4
0
100
200
300
400
500
600
700
IT & Software BPO LPO
Global spending
India exports

EMPLOYMENT OPPORTUNITY – 2011 (MN)
0
0.5
1
1.5
2
2.5
3
IT/BPO KPO
Employment

Intangible assets account for up to 80% of
market value in 2010
Source: Ocean Tomo's Annual Study of Intangible Asset Market Value -
2010

TRENDS LEADING TO OFFSHORING
 Proliferation of patent applications worldwide
 Value of patent portfolios
 Lack of resources locally to handle the increase
in work
 Exorbitant costs to do it all locally
 Cost of obtaining patent rights: USD 15,000 to USD
30,000+
 Difficulty in handling worldwide work centrally for
some MNCs
 Slowing economy

SEGREGATION OF WORK
Non – core portfolio
- Relatively simple work, and/or
- Non-strategic
Core portfolio
- Requires higher skill set, and/or
- Strategic in nature
Non – core work
- Repetitive, and/or
- Transactional
Core work
- Highly specialized, and/or
- Strategic in nature/ involves
higher risk

VALUE CHAIN IN OFFSHORED SERVICES

Infrastructure
Software
IT Consulting
Software R&D
ITO
BPO
ERM HRM CRM
KPO
Business
Services
Legal
Services
Low
High

Low
High
Legal Support/ Staff augmentation
Document review and formatting, transcription,
paralegal services, etc.
Legal Research
Information gathering, Prior art
searches, litigation support, etc.
Analysis
patent drafting,
Landscape analysis,
contract drafting, etc.
Basic
Aptitude
Aptitude
+
Exp.
High
Aptitude
+
Inter
Disc.
Exp.
Process
People
Delivery Quality CRM

PATENT SERVICES
Disclosure
Development
IP Research and
Analysis
Application
Preparation
Filing and
Prosecution
Portfolio
Maintenance
Licensing &
Commercialization
Litigation
Innovation/ Idea Generation

HUMAN RESOURCE SKILLS

INVENTOR INTERACTION
Invention Disclosure
Inventor Interview
Novel elements summary
First Draft
Inventor Review
Second Draft
Final Review
Application forms preparation and
Filing
Start to finish in about 3 to 4 weeks

EXAMPLES
Computer Input Device
Search method
Robotic Arm

KEY SKILLS
 Communication
 Written and oral
 Legal
 Region specific; case law updates
 Technical
 Cutting edge technology
 Project management
 Time critical

CHALLENGES

CHALLENGES – RESOURCES
 Lack of ecosystem for IP in India
 Only about 10,000 applications were being filed in India in 2002
 In 2011-12, the number stands at 37,000 applications; 80% from
foreign applicants
 Lack of resources with inter-disciplinary skills
 Social structure and pressures
 Lack of experience with foreign systems
 Attrition
 10 to 25% attrition rate due to economic growth and opportunities
 Attrition higher in lower segments of value
 Competition with other industries; captive units that pay higher
salaries; obsession with IT job as a status symbol

CHALLENGES – MARKETING
 Quality
 Basic skills
 Inter-disciplinary education/understanding
 Consistency
 Credibility
 Prior data theft cases
 Director of a business process outsourcing (BPO) unit for his alleged
involvement in stealing medical history data in 2011
 Employee of a mobile operator BPO shares data outside company in 2010
 Lack of a credible IP environment
 Cost savings
 Diminishing labor arbitrage opportunity

EMERGING TRENDS

CAPTURING VALUE
 Expertise
 Process
 Delivery
 Organization

EXPERTISE
 Higher up in value chain
 Ex: litigation
 Domain expertise
 Ex: telecom
 Niche services
 Ex: patents

PROCESS INTEGRATION
 Enable self-service
 Automation
 Increase efficiency
 Transparency/ confidentiality/ security
 Increase interaction and engagement; value
addition

DELIVERY
 People
 Mode
Onsite
Onshore Offshore
Online Offline
+

ORGANIZATION
 Structure
 Incentives

EXAMPLE

US Office US
India
EP
JP CA AU
HK
CN
IN
US
CN/IN Office

LEADING NICHE MOBILE PHONE COMPANY
 Problem
 Conceptualization in US; manufacturing in China;
Design and R&D in India
 Distributed IP processes; multiple law firms
 Lack of internal resources and focus on IP
 Solution
 Single point IP management solution
 Centralized docketing and reporting
 Increase efficiency in terms of manpower and costs

IP SERVICES
IP Generation
&
Identification
IP Protection
&
Management
IP Risk Mitigation
&
Commercialization
Policy and process
setup
Strategy services
Training
Disclosure
development
Application drafting
Filing and prosecution
Portfolio maintenance
Portfolio review and
analysis
Prior art search
Agreements
FTO/ Landscape/
Infringement/ Validity
Research & Analysis
Open source analysis
License Agreements

CHOOSING AN OFFSHORE PARTNER

CAPABILITIES
 Team
 Track record
 References
 Pilot/Test cases

SKILLS AND PRACTICE
 Understanding of foreign legal systems
 People trained in foreign legal systems
 Language skills
 Hiring and training practices
 Inter-disciplinary
 Continuous learning
 HR practices to retain talent
 Organization structure
 Incentives to retain

PROCESS AND INFRASTRUCTURE
 Process and Technology infrastructure
 Defined and Repeatable processes
 Metrics/SLAs
 Automation
 Security/confidentiality measures
 Physical, Technology & legal

QUALITY
 Consistency
 Multi-step quality check
 Multi-layer?

SUMMARY AND Q&A

Value Chain Analysis in Legal Outsourcing, By Arun Narasani

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