Peer to Peer Magazine

June 2011

The quarterly publication of the International Legal Technology Association

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Page 74 of 143

Clients’ Work he deal sent a clear message that legal process outsourcing (LPO) is very much a part of the permanent legal landscape. Additionally, a growing number of clients are trying to determine how much and what types of work can best be be sent to third- party LPO vendors, and law firms worldwide are realizing that they cannot continue to function by simply hoping LPO will fade away. Others are curious to see if other major legal publishers will emerge with competing LPO offerings and, in doing so, if they will begin competing with their own law firm clientele. Regardless, LPOs have already created competitive pressure — which will likely now increase — and are projected to have an even greater impact on how commodity legal work will be handled by 2020. T Meanwhile, the Great Recession and the continuing recovery have brought about a “new normal” that has challenged and accelerated changes to the law firm model. Perhaps the biggest long-term challenge, however, is the question of what type of work should be done by law firms. The answer will most likely have the largest impact on the profitability and structure of law firms in the future. Disaggregation Is Inevitable Up until a few years ago, clients would ship just about anything tangentially related to legal to their firms. Little regard was paid to cost effectiveness or efficiency. Clients generally felt comfortable with the quality of the work, and viewed the additional value of having the law firm imprimatur as worth the expense. Today, however, increasing cost pressures — coupled with advances in technology-enabled collaboration — have clients asking whether using expensive firm attorneys is the best and only way to get work done. While all agree that law firms are the right choice to provide strategic legal advice (e.g., setting and executing litigation strategy, reviewing complex mergers and 76 Peer to Peer Competition for Your New The acquisition of Pangea3 by Thomson Reuters has many in the industry continuing to raise questions about the growing role of alternative suppliers of legal services, such as the legal process outsourcers. by Michael D. Bell of Fronterion LLC and Bradley S. Blickstein of Blickstein Group acquisitions, studying tax matters), an increasing contingency of clients are realizing that much of the “downstream work” can be done much less expensively, often faster and sometimes better by sources operating outside the auspices of a law firm. For example, the unprecedented proliferation of electronic documentation and email throughout the business world has caused an explosion in the amount of documents to be reviewed as part of the discovery process. While it makes sense for experienced litigators to determine the guidelines that can be used to determine if a document is responsive, many find that lower-level staff or outside resources can be deployed to follow those guidelines. Already clients have largely turned from using expensive law firm associates for these types of reviews, and instead are relying on the law firms to manage less expensive contract attorneys. Many types of “commodity” work can be done outside of big law firms via technology and contract attorneys, such as contract life-cycle management, patent portfolio updates and legal research. People, Process and Technology Legal process outsourcing firms are known for providing low-cost professionals, typically in overseas locations. But LPO vendors are not simply “international staffing companies;” instead, they consider themselves specialists in commodity legal work and they combine people, process and technology in their approach. Legal technology companies, by their nature, try to solve every problem with technology, but the best technology is not always enough. Staffing agencies, by their nature, provide teams of low-cost people who can do a great deal of work at a low hourly rate, but are not necessarily focused on efficiency and typically leave day-to-day management to the client (or law firm). Both have their place, but can really only be considered tools. Through the combination of low-cost staff, innovative technology and a systemized project management approach, LPO vendors

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