VALUE CHAIN PERSPECTIVE IN LEGAL OUTSOURCING INDUSTRY

By, Arun Narasani, Co-founder/CEO, Brain League IP Serviceswww.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

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AGENDA

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

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OFFSHORE OUTSOURCING

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ONSHORE VS OFFSHORE

Regulatory framework Risk vs reward

Experience Incremental vs leap

Cost savings Control vs focus

Outside cousel Threat to bottomline vs margins

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ONSHORE VS OFFSHORE

In-house counsel Job security vs value addition

Capacity requirements Stable vs varying

OPPORTUNITY – EXPORTS IN 2011 ($BN)

IT & Software BPO LPO0

100

200

300

400

500

600

700

4514

0.4

Global spendingIndia exports

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EMPLOYMENT OPPORTUNITY – 2011 (MN)

IT/BPO KPO0

0.5

1

1.5

2

2.5

3

Employment

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Intangible assets account for up to 80% of market value in 2010

Source: Ocean Tomo's Annual Study of Intangible Asset Market Value - 2010

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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

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SEGREGATION OF WORKNon – core portfolio- Relatively simple work,

and/or- Non-strategic

Core portfolio- Requires higher skill set,

and/or- Strategic in nature

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Non – core work- Repetitive, and/or- Transactional

Core work- Highly specialized, and/or- Strategic in nature/ involves

higher risk

VALUE CHAIN IN OFFSHORED SERVICES

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Infrastructure

Software

IT Consulting

Software R&D

ITO

BPO

ERM HRM CRM

KPO

BusinessServices

LegalServices

Low

High

© Brain League IP ServicesLow

High

Legal Support/ Staff augmentation

Document review and formatting, transcription,

paralegal services, etc.

Legal ResearchInformation gathering, Prior art

searches, litigation support, etc.

Analysispatent drafting,

Landscape analysis, contract drafting,

etc.

Basi

c

Apti

tude

Apti

tude +

Exp.

Hig

h A

pti

tude +

In

ter

Dis

c. E

xp.

Process

Peop

le

Delivery Quality CRM

PATENT SERVICES

Disclosure Development

IP Research andAnalysis

ApplicationPreparation

Filing andProsecution

Portfolio Maintenance

Licensing &Commercializatio

n

Litigation

Innovation/ Idea Generation

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HUMAN RESOURCE SKILLS

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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

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EXAMPLES

Computer Input Device

Search method

Robotic Arm

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KEY SKILLS

Communication Written and oral

Legal Region specific; case law updates

Technical Cutting edge technology

Project management Time critical

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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

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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

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EMERGING TRENDS

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CAPTURING VALUE

Expertise

Process

Delivery

Organization

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EXPERTISE

Higher up in value chain Ex: litigation

Domain expertise Ex: telecom

Niche services Ex: patents

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PROCESS INTEGRATION

Enable self-service Automation Increase efficiency

Transparency/ confidentiality/ security

Increase interaction and engagement; value addition

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DELIVERY

People

Mode

Onsite

Onshore Offshore

Online Offline

+

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ORGANIZATION

Structure

Incentives

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EXAMPLE

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US Office US

India

EP

JP CA AU

HK

CN

IN

US

CN/IN Office

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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

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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 prosecutionPortfolio maintenancePortfolio review and analysis

Prior art search

Agreements

FTO/ Landscape/ Infringement/ Validity Research & Analysis

Open source analysisLicense Agreements

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CHOOSING AN OFFSHORE PARTNER

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CAPABILITIES

Team

Track record

References

Pilot/Test cases

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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

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PROCESS AND INFRASTRUCTURE

Process and Technology infrastructure Defined and Repeatable processes Metrics/SLAs Automation

Security/confidentiality measures Physical, Technology & legal

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QUALITY

Consistency

Multi-step quality check

Multi-layer?

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SUMMARY AND Q&A

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