However, in an upcoming acquisition financed by a UK bank in the FTSE 100, the lawyers carrying out due diligence are in fact from India.

NewGalexy, a Mumbai-based company with a small office in London and three FTSE clients, is one of a small but fast-rising crop of Indian companies handling outsourced legal due diligence.  Robert Glennie, NewGalexy’s founder, says the company offers the same quality of legal support work for half of the cost charged by top firms in London’s legal establishment. NewGalexy pays salaries of $12,200-$21,000 to lawyers in India qualified to UK law practice standards.

The trend illustrates how the conservative legal profession is finally joining other highly paid professional services sectors and using offshore outsourcing.

Although foreign law firms are not allowed to set up office in India, many have a "transaction-based" presence in the country and the bigger ones are exploring setting up in-house or “captive” offshore centers to process their global litigation support services.

Liam Brown, chief executive of Integreon, a US-based offshore services provider with 900 staff in Mumbai, says top law firms in the US and UK are under pressure to cut costs by centralizing their often disparate practices and reversing the practice of farming out litigation support work to costly external lawyers.

The logic is not only cost, he adds.  As in many of areas of professional services being shipped to India, notably investment banking, outsourcing frees up highly paid staff to focus on the “valued-added” work their expensive education was designed for.

One area of fast growth for legal outsourcing companies is so-called “e-discovery” services where lawyers scrutinize voluminous quantities of emails to find black holes or the embarrassing idle disclosures that could unravel a transaction.

Mr. Brown estimates that the global e-discovery market is worth $1.5 billion and growing by a third annually.

Integreon recently bought an e-discovery unit from US-based Bowne for about $5 million and is confident of achieving revenues of $50 million from the acquisition in three years.

Such is the expectation of the growth of offshore outsourcing by legal firms that Integreon is positioning itself largely as a legal services entity. It is lining up another acquisition that should lift the share of its legal services revenues from 20 per cent to 70 per cent.

Mr. Brown says such legal focus will prepare the company for a move into intellectual property, possibly via an acquisition in a sector where valuations are racing ahead.

For example, south Indian-based Office Tiger, an early mover in offshore legal and other services, strengthened after a joint venture with US legal consultancy Hildebrandt International in 2004, was bought last month by American printer R.R. Donnelley for $250 Million, a multiple of 45 times its 2005 earnings.

Mr. Glennie, who formerly ran the legal arm of professional services firm KPMG, said NewGalexy was also winning work from multinationals.

Such in-house legal teams were increasingly burdened by the arduous, large-scale compliance work demanded by Sarbanes-Oxley legislation, but find it expensive to farm the work out to traditional law firms.

US and UK companies therefore regard the India option with relief, with advantages that give it an edge over other low-cost offshore locations. Educated Indians speak English, but generally not French, German or Japanese.

And since most international contracts are governed by English or US law, the potential volume of work that could be done from India is huge.

ValueNotes Database, an Indian research company, predicts legal services offshoring will employ 24,000 people in India by 2010 -- a 10-fold increase from today.

Forrester Research, a US-based research group, forecasts that, by then, 39,000 US legal jobs will have been shifted to low-cost countries.

The Big Four accountancy firms, which compete with law firms for some types of work, are beginning to feel the heat from India-based competitors. Ernst & Young, for example, recently offered to do some post-acquisition "tidying up" work for a FTSE-I00 manufacturer -- for a fee of hundreds of thousands of dollars. The client told E&Y that the same work could be done at much lower cost in India, and gave the job to NewGalexy.