Class of ’92, ’93, ’95 | Chances are, your ISP support, credit-card customer service, and maybe even your office’s data-entry projects have already been outsourced. So why not outsource your legal work to a lawyer in India? That’s the question David Perla C’92 L’95 and Sanjay Kamlani L’95 asked themselves one evening in the fall of 2003.
Today they, along with Jonathan Goldstein C’93 L’05, run Pangea3, the global legal-service outsourcer that dominates that emerging niche, and which was born from that dinner-table conversation. All three men acknowledge a disposition toward the entrepreneurial spirit and a desire to reinvigorate the sometimes-stifling atmosphere of corporate law.
“Law has become, in many ways, an oppressive profession,” says Goldstein. “What we are doing is enabling corporations to remove the repetitive and less appealing components of the work lawyers are asked to do in order to focus on places where lawyers can add real value.”
Pangea3, which has offices in New York, the Silicon Valley, and Mumbai, performs a range of services: patent research and prosecution, contract drafting and management, document review and litigation services, and legal research and competitive intelligence. After a project is contracted, assignments are transmitted through a dedicated server to teams of legal specialists in India.
Pangea3 employs and trains law-school graduates. Kamlani points out that Indian law schools teach their students the same common-law practices as schools in the United States and the United Kingdom, with all lecturing conducted in English. Similarly, he notes that the corporate environment in Mumbai is “quite similar to working in New York City, both from a professional lifestyle standpoint as well as the commitment and work hours at law firms or businesses.”
Before Pangea3, Perla handled corporate financing, mergers and acquisitions, and Internet-related corporate transactions at Katten, Muchin, Zavis and Rosenman (KMZR), where he was the go-to guy in technology and Internet law. Eventually he left KMZR to work at the then-obscure Monster.com, the online job-locating enterprise, where he became vice president of business and legal affairs.
Kamlani began his career with the accounting firm PricewaterhouseCoopers in New York, where he developed and managed the firm’s India International Business Network; after that he served as chief financial officer and general counsel of OfficeTiger BV, a business-services outsourcer.
Goldstein first channeled his entrepreneurial drive into Interliant, an application-service provider, which he founded shortly after graduating from Penn in 1993. His next venture—Urban Technology Group (UTG), which provided software-development and infrastructure support services to knowledge workers—grew so rapidly between 2000 and 2002 that Philadelphia Business Journal cited him as one of its “40 Under 40.” He returned to Penn to earn his law degree, then worked for a short time at Blank Rome before being recommended to Perla and Kamlani.
After Kamlani and Perla conceived the idea behind Pangea3, they picked the brains of dozens of legal colleagues to determine its feasibility. While the relevant experience and Penn pedigree helped, it wasn’t enough to win everyone over.
“We heard [feedback such as] ‘I suppose it could work, but I would never trust anyone in India to do my legal work,’” explains Perla. “One guy just said, ‘Absolutely not, never, no one in Asia could ever work as well as I could, and I can’t imagine why anyone would start something like this.’”
But the two entrepreneurs had faith.
“I think those same concerns are [raised] anytime we insert something into the economy that generates productivity and lowers cost,” Perla says in response to a question of whether outsourcing legal work would threaten the jobs of paralegals or legal secretaries. “The same thing happened when we automated work that used to be done by people. The same thing happened when a lot of jobs disappeared with the advent of the PC and software. This is no different; this is just another way to raise productivity and lower costs. I think you’ll see lawyers doing different things five to 10 years from now than they are doing today. That’s the norm; the focus of the profession is always changing.”
As for the perceived lack of intimacy across borders, Kamlani says it is “no different than a law firm and a client working in two different buildings, talking on the phone and interacting online.” Those who think Indian lawyers are too far removed from American legal processes, adds Perla, are not looking at the bigger picture.
“The U.S. has 50 states plus D.C., and a number of commonwealths have different codes or different state laws,” Perla points out. “The best way to analogize India is to think of it as yet another state. There are some variations, but they’re not very different than the variations between New York and Florida. California is unlike any other state. I’d almost say practicing law in India is more similar to New York than is California.”
As for quality concerns, says Kamlani: “A good lawyer knows how to draft a good contract whether you are operating in the U.K., U.S., or India.” And in an industry where fresh-out-of-school associates start at salaries upwards of $145,000 to wade through paperwork, legal costs have been identified as a top concern for cost-conscious executives.
“We find that a lot of the things that we do end up creating more revenue, more growth, and more jobs in the U.S.,” adds Kamlani. “We’re able
to offer patent drafting or redrafting applications for maybe six times less than what it might cost at a law firm.”
Pangea3’s work has not gone without recognition: Legal-industry magazines have studied its model, and it recently won the Frost & Sullivan Market Leadership Award. As legal-process outsourcing grows in popularity, domestic law firms will be forced to adapt.
“The industry continues to change, and outsourcing is merely another aspect of an efficiency driver,” says Perla. “The bulk of the people we talk to are either on board with adopting it, or they understand it’s going to be adopted anyway. People aren’t losing their jobs; we’re just changing the nature of what lawyers do.”
—Carter Johns C’07
