I drew attention recently to an article on outsourcing from a law firm perspective, written by George Rudoy on 1 December on the Georgetown Law site and called To Insource or to Outsource. I suggested that it was worth reading, not simply because of George Rudoy’s position (he is Director of Global Practice Technology and Information Services at Sherman and Sterling LLP) but also because of his long-standing role in education on a discovery matters. The article focused on the factors to be weighed in deciding what work to handle in house and what to send out and, more specifically, on the technology, strategy, process and skills needed to handle each new case appropriately.
Now Debra Rozier of Integreon has picked up on the same article, agreeing generally with George Rudoy’s assessment and adding “two more cautionary notes of our own, one around technology, the other around pricing.”
Integreon’s business, of course, is the provision and management of outsourced services, including e-discovery, so their gloss on Rudoy’s article is unlikely to tend towards in-house solutions. To be fair, Integreon manages to maintain an objective viewpoint in their commentaries on the market – it is relatively easy for me to write objectively across the full range of solutions, but rather harder to do so if your business involves selling one particular approach. Integreon seems to carry it off, I suspect because its people are genuinely interested in the market as a whole.
Nevertheless, and inevitably, the notes of caution which Debra Rozier’s article add to George Rudoy’s piece are ones which point towards outsourcing at least part of the functions of e-discovery / e-disclosure. Factors which she identifies pointing in this direction include:
- The difficulty of estimating the return to be made on a law firm’s long-term investment in technology when they cannot anticipate either gross volumes for the year ahead or the extent to which clients will take part of the discovery process in-house.
- The expense of the upgrades which vendors release with increasing frequency and which bring in new learning requirements as well as further investment.
- The possibility that the strategy of offering clients “something extra” or” “hidden discounts” may fail, partly because the enhanced service brings with it the corollary of a new service level to meet, and partly because “clients may not realise they are receiving a discount”.
This last element – that law firms may be increasing their own risk and cost without corresponding benefit in new work or fees – comes across as a make-weight argument compared with the first two points. It would indicate a marketing failure rather than a strategic or technology one if the clients were not aware of the options being considered in respect of their work. A discount so hidden that the clients do not notice it seems fairly pointless.
One cannot blame Debra Rozier for the additional weight given to the benefits of outsourcing or, (depending on your viewpoint) the risks of not doing so. Every firm which wishes to maintain its place as offering litigation and related services must at the least weigh up the pros and cons of the different approaches to the kind of work which they wish to win. The only mistake, as I have said often, is not to think about it at all. The Rudoy and Rozier articles should be compulsory reading for anyone responsible for managing and marketing a litigation department in 2010.