Offshore Document Review
Tusker outsources to India; $25 an hour for an attorney (Austin Business Journal, 18 April 2008) reports on an offshore document review that saved between 80% and 90% relative to the cost of an onshore review. These savings enabled a small company to take on Dell Inc.

Law Firm Leadership Training Spreads
Over the last few years, numerous national law firms have partnered with leading business schools to provide business training. This trend appears to be moving beyond major metro areas. Columbus law firm joins forces with OSU to create leadership course (Columbus Business First, 11 April 2008) reports that Ohio State University has “customized [a] new leadership development program” for Bricker & Eckler.

E-Discovery Convergence
Information Week (21 April 2006) reports in Oracle’s E-mail Organizer that “Oracle is moving into e-mail archiving [which] let IT managers organize, archive, and search e-mail from Microsoft Exchange, IBM Lotus Notes, and SMTP-based e-mail systems.” [See also Oracle Universal Online Archive.] With this type of functionality, corporations should be able significantly to reduce e-discovery collection and processing costs.

Open Source Law
I recently learned about The Online Compliance Consortium in the article Online AML Compliance in Managing Partner (March 2008). The OCC web site home page states “The purpose of the OCC is to help establish best practice and standards for larger law firms in the arena of compliance and specifically compliance training. Founded in 2004 through the collaboration of 14 of the UK’s leading law firms the Online Compliance Consortium has now grown to include over 70 the world’s largest law firms.” The article suggests that the group was formed by leading law firms to “share their experiences and concerns to create a common standard and a portfolio of training programmes for compliance.” Sounds like open source law.

In one of about every four hotel stays, I have to call tech support to get the net connection working properly. I waste a lot of time doing this. I can’t be the only one. Instead of going into gory detail, let’s look at some potentially interesting lessons for law firms:

• If you outsource a customer or client facing service, do NOT disown responsibility for it. I am a big outsourcing fan. Done right, it means improving service, not making it worse. To me, it feels hotels have outsourced AND disowned. This hurts their brand and repeat business.
• Both hotels and law firms provide a complex set of services. How do you decide what to bundle in the basic rate? Low-end hotels often bundle net access in the room rate; I’m not sure why high-end ones don’t. I occasionally choose a hotel based on free net access. Are law firms losing clients or prospects because they have unbundled too many services? I really don’t know, but it’s worth making a conscious choice.
• Metering a service is generally a prerequisite to charge for it. The fact that it’s possible to meter a service does not mean you should. Let’s not forget Skaddenomics (a famous 1991 American Lawyer cover story on Skadden Arps charging clients for coffee service).
• Everything I just wrote notwithstanding, the purchase decision is complex. With net connection problems pretty universal, loyalty programs and location still drives my hotel decisions. Since the core service offering drives decisions, improvements to extras may not be good investments.

All this leaves me concerned that in both hospitality and law, service problems will persist for a long time.

Cutting a Winning Edge in Law Firm Blogs, an article about large law firm blogs illustrates this point. A blog-less BigLaw firm’s spokesperson is quoted, re firm blogs:

“They take effort, we have to generate the content and there’s a big issue when you’re communicating with the public: Are you giving legal advice?” If you say something a reader interprets as advice, you’re then in a situation you don’t want to be in.”

Never mind that e-mail alerts, articles, and content for web sites all take effort to generate. And never mind that the firm has large amounts of content on its public web site that readers might interpret as advice. Is this firm already in a situation it does not want to be in?

Fortunately, the rest of the article is a pretty good and well-balanced view of the pros and cons of BigLaw blogs. It also includes practical steps to take to minimize risks.

Many answers are possible. Below, I set forth one model - a classic management consultant’s 2-by-2. On the x-axis, plot complexity of work, from low to high. On the y-axis, plot volume of work, also from low to high. Draw lines at the axes’ centers and you define four quadrants. The bottom-left is low complexity and low volume, the top-right is high complexity and high volume, and so forth.

Intentionally absent are specific measures. The idea is consider the right resource for each quadrant without worrying about detailed measures. In my analysis, the simplest legal problems (lower left) can be solved with checklists. Automation (e.g., document assembly or expert systems) can solve low to medium (and even high) complexity problems given high enough volume (required to earn an ROI on the upfront cost to develop the system).

Off to right, for complex work, I assume lawyers are the right resource. But then there’s the big middle ground of medium complexity work at low or high volumes. Here, I suggest, a combination of paralegals, other professionals, temp lawyers, and offshore lawyers. Note that in general, shaded areas intentionally overlap.

Each person likely would draw the circles / ellipses elsewhere. The point is to use this approach to think about and discuss what resources to deploy to solve legal problems.

How many clients have systematically thought about their portfolio of legal problems and the optimal resource mix? Perhaps most general counsels intuitively choose the right resources for all their problems. I suspect that going through this or another systematic exercise / analysis might identify cost savings.

[I have previously proposed a different two-by-two framework for assessing investments in legal technology.]

I could not attend the American Lawyer rankings preview webinar today but found an excellent summary by Adam Smith, Esq. at The AmLaw 100 for 2007: “Flash Report”.

The new American Lawyer web site will soon post more information.

Update (1040pm EDT, 29 April 2008): See The 2008 AM LAW 100: Lessons of The Am Law 100 (American Lawyer, 1 May 2008). As of now, the only chart I can find on the web is RPL [Revenue per Lawyer] Ranks 1998-2007. Have some fun: copy and pasted the entire table into a spreadsheet so you can sort and analyze.

Update - Sponsored Link (1 May 08): Click here to buy the 2008 AmLaw 100 downloadable file. Now you’re really talking fun.

I blogged about the idea of open source law four years ago. Lawyers Open Their File Cabinets for a Web Resource (New York Times, 27 April 2008) reminds me of that idea. The article focuses on JD Supra, which stocks “a free, virtual law library by persuading lawyers to do something highly unusual: to post examples of their legal work online for use by one and all, no strings attached. Many of the documents are articles and newsletters that can be understood by ordinary mortals who want more background on a legal issue, or who would like to find lawyers with expertise in a particular area.”

JD Surpra moves the market closer to the open source model by providing a sharing platform. Several steps are still needed to get to the web-based collaboration, iterative improvements, and free sharing of a true open source approach. My March 2008 blog post, New Collaborative Web Sites for Legal Market reported on JD Supra, as well as Legal Onramp, which is more geared toward the B2B market.

Inhouse counsel frequently express concern about escalating legal costs. They can’t reduce demand so they need to find cheaper ways to deliver advice. Is an open source approach a realistic cost-saving approach now that the platforms to support it exist? Of course, there are many reasons not to pursue the concept: it’s a bad idea, lawyers have not done it in the past so why should they do it now, the free-rider syndrome, and lack of incentives to share. On that last point, I will leave it to others to ponder why whole communities of software developers happily share work product and lawyers do not. [I think the answer involves more than just confidentiality.]

I began writing about legal outsourcing (onshore and offshore) five years ago. Since then, the LPO market has grown. There have been countless articles in both the legal and general press (the most recent being Contract with India: Legal outsourcing, Financial Post, 25 April 2008). And the number of LPOs as tracked by Joy London and me is now over 100.

Another positive sign for a market is when established players enter it. Infosys and Wipro are two of the largest and most successful outsourcing companies in India. On April 28th, the Economic Times reports in Wipro logs on to LPO services that Wipro “has started offering legal process outsourcing (LPO) services.” As Wipro notes on its LPO web page, “With growing focus on profitability and cost reduction by corporations & law firms, things are beginning to change - and, like in many industries, outsourcing is playing a key role.” Earlier, on 5 Nov 2007, the Economic Times reported in Law & order: Infosys to foray into LPO business. (See the Infosys LPO web page.)

It will be interesting to see the impact of these well-established companies on the LPO market. Both Wipro and Infosys have great brand equity in business process and IT outsourcing. It’s not obvious, however, that this brand equity counts for much with general counsels. What may matter more are the relationships both have with with CIOs, CFOs, or COOs and whether introductions from them effect CLO decision-making.

I am swimming against the tide. In Making the Case for Change (ABA Journal, April 2008), the sub-article Case Evaluation: Too much em­phasis on a quantitative ap­proach often misses key factors by Louis M. Solomon of Proskauer criticizes over-reliance on decision trees: “An overly numerical approach to case evaluation has serious limitations. Formal case evaluation seeks to achieve an optimal identification of possible outcomes, but perfection in the process cannot be achieved. An unthinking use or overuse of mathematically driven case evaluations does not serve clients well.”

Beyond complexity, Solomon lists three limitations of decision trees:
1. Overemphasis of quantifiable factors
2. Discounting small probabilities
3. Inadequate consideration of the client’s risk tolerance

He closes, however, by acknowledging its potential value, especially to dispel fuzzy thinking and statements like “you have a good chance of winning.”

I’m not a litigator and I don’t know the right answer. But I view this technique as I do drugs, devices, or medical procedures. What does the evidence say? I’m not sure enough litigators and clients have used decision trees properly and compared alternative risk assessment methods to reach an empirically sound conclusion. Sure decision trees are hard and have limits. But for cases about money (and most are), what is the better approach to assess risk and set up a framework for discussing decisions? If achieving “perfection in the process” is the standard, we may as well give up at the outset. The fact that doing risk analysis is hard may mean lawyers need more training, not that they should ignore a potentially valuable technique.

A Rees Morrison blog post alerted me to this article. In a separate post, Law firms, law departments and the asymmetry of concern about money Morrison concludes that “firms and departments exhibit an imbalanced focus on money. Where many people outside focus on increasing money, relatively few people inside – and only part of the time and reluctantly at that – focus on holding the line” Perhaps if inhouse counsel were more concerned about holding the line, they’d eagerly employ decision trees. Have they even used risk analysis enough to say it’s not worth the effort?

Well you can. Doing so has been easy for quite some time as I reported in Something for Nothing? Enterprise Relationship Discovery (30 May 2007).

If you are in large law firm knowledge management, marketing, or business development, it should now be easier to persuade management to buy enterprise relationship discovery software. Email Software Delves Into Employees’ Contacts (Wall Street Journal, 21 April 2008) reports on this category of software. “Companies are rolling out software that allows them to mine their employees’ emails and electronic address books for contact information, in a bid to make it easier to establish relationships with potential clients and others.” The article reports that Contact Networks “is used at about 40 law firms, including Skadden, Arps, Slate, Meagher & Flom LLP and Weil, Gotshal & Manges LLP”.

Few firms like to be first to try something new. A mainstream media report on something means it can’t be all that new. And with two named AmLaw 100 firms as customers and 38 other law firms (and that is just for one product), other firms risk missing being in the middle of the adoption curve, where they usually prefer to be. How long before partners grill the CIO, CKO, or CMO about why the firm does not have this type of product?

On Friday, I was a panelist at the NALP annual conference plenary session, The Future of Law Practice: Trends, Predictions, and Imperatives. Some panelists predicted big changes, from a re-working of law schools, to a resurgence of solo practitioners, to a return to values. [Since I was a panelist, I could not blog this one in real time!]

At the same time, Georgetown University “Future of the Global Law Firm” symposium [PDF], reported on in some detail by Adam Smith, Esq in Georgetown Conference on the Future of the Global Law Firm: First-Hand Report. Likewise, much change predicted.

Yet this weekend, as I read Corporate Counsel and Law Practice Management magazines, I was struck by the number of articles that could have appeared - indeed actually did appear - with similar advice 5, 10, or 20 years ago. If things are changing so fast, what are the indicators? Allowing law firms to go public in Australia and the UK may lead to big things but the jury is still out.

And where are the clients in this discussion? Adam Smith, Esq’s list of attendees includes not a single general counsel. If they were not invited, what does that say? If they were but did not come, what does that say? Skimming the NALP attendance list (1300+) I saw only one inhouse law department represented.

Other than Marc Chandler of Cisco, who rightly gets a lot of PR for changes the Cisco law department is making, where are the articles about inhouse counsel doing things a new way? Convergence? Been there, done that, and it may not be working all that well anyway. Alternate billing. Under discussion since at least 1990.

I am still waiting for clients to exercise their market power in a big, new way. Without that, I think it’s more of the same.