Legal advice will be vital to an outsourcing revolution that will see up to two million jobs leave developed countries for the developing world in the next five years, a seminar organised by the London office of US firm Latham & Watkins heard last week.

Chris Gentle, accountancy firm Deloitte Touche Tohmasu's research director, told the London-based seminar that Deloitte's research showed $356 billion (189 billion) of the financial services industry's cost base will move away from the US, the EU, Switzerland and developed Asian locations, such as Hong Kong and Singapore.

The chief beneficiary will be India, he said, but other countries that will mop up the work include Australia, China, South Africa and Malaysia.

He said that outsourcing was expected to grow dramatically and to expand from those sectors - such as wholesale banking and insurance - which currently use it, to include sectors such as retail banking.

Some law firms have also started to outsource back-office functions to India.

Mike Corran, the director of strategic resourcing at Lloyds TSB, told the seminar that lawyers are key to the potential success or failure of outsourcing.

He said: 'You need to find a lawyer who has experience of outsourcing because they are a huge support to the enterprise.'

He said this was critical in India - the fastest-growing outsourcing market - where finding a local lawyer on the ground is 'quite a challenge' because of local restrictions on foreign lawyers' practising rights.

Jeremy Fleming