The Hokey Cokey, whose words I bastardise for my title, proves to have national variants, rival sources and alternative meanings, not all of them positive. You can fight about that among yourselves. All I want from it is the idea that legal work (the work in support of a legal function, I should perhaps say) is heading in two directions. Some companies are taking more in house, others are distributing it. Most will “shake it all about” this year. An article by Xerox Litigation Services puts eDiscovery / eDisclosure software and services into the mix.
Sometimes a batch of related subjects comes at you at about the same time, making it easy to assume that the subject is on everyone’s lips. That may, of course, be a false conclusion derived from the fact that we select our sources to reflect our interests – the websites we visit and the people we follow on Twitter will have been chosen because their interests (though not necessarily their opinions) match our own. Nevertheless, if a subject recurs, there is probably something worth investigating.
A theme which came up recently for me, in different places, was about how companies get their legal work done and how law firms deliver services at a cost which is acceptable to the client whilst giving them a profit. Professor Richard Susskind has long sneered at law firms whose response to downward pressure on fees is simply to knock 5% or 10% off their hourly rates. We have moved beyond that to serious thought, by both companies and law firms, about who should do the work and where it should be done. The answer to these questions may involve thinking afresh about the distribution of work within the company or firm; it may involve collaboration with outsiders who can perform discrete functions in a way which reduces cost whilst maintaining quality.
Most of the sources which come my way are likely to have an eDiscovery / eDisclosure or litigation context, but the subject obviously goes wider than that. A US article from Xerox Litigation Services and Bryan Cave, whose self-explanatory title is Corporations moving into the eDiscovery drivers’ seat, is my destination, but my route to it goes via UK articles, none of which are specifically focussed on litigation. Like the Hokey Cokey, the ideas turn up in broadly similar form in different countries. We say “Cokey”, they say “Pokey”; we say “eDisclosure”, they say “eDiscovery”; the broad concepts are the same.
You put your left leg in,
Your left leg out:
In, out, in, out.
You shake it all about.
You do the hokey cokey,
And you turn around.
That’s what it’s all about!
All I am borrowing from the song (apart from a headline which might catch the eye) is the idea that legal work is travelling in both directions – some being taken in house, some being distributed to others – and that the result is shaking things up. I don’t mean anything apocalyptic here – you won’t find me (yet) predicting the death of law firms; the shaking is not of earthquake proportions, but more akin to shaking a jar of coloured sweets; the original neat stratification of colours (aka “in house” versus “external” functions) becomes mixed up.
In an article in the FT headed Majority of in-house lawyers look beyond traditional law firms (free access, registration required), David Morley, senior partner at Allen & Overy is quoted as saying “Companies are seeking out innovations in the way they procure, use and interact with providers of legal services”. There is an introduction to A&O’s report on the subject here. A&O and Herbert Smith Freehills have led the way on this in litigation terms by setting up document review centres in Belfast, using junior staff to work on research for major deals as well as on the high-cost and low-value components of litigation. It is not just law firms who have lighted on Ireland; eDiscovery provider NightOwl Discovery has recently opened a hosting centre north of the border in Dublin.
I was pointed to the FT article by a tweet from Tim Bratton, formerly General Counsel at the FT, but now with Lawyers on Demand, a company whose business is matching up the fluctuating needs of companies with the increasing wish of lawyers to work outside corporate or partnership structures. My next exhibit in this thematically-linked sequence is an article by Tim Bratton published in the Lawyer on 23 May with the heading, Advise, don’t execute. Its theme is captured in the words “…keeping the high level strategic advisory work in-house and outsourcing much of the day-to-day ‘doing’ of other work”. That ‘other work’ covers a wide range from complex to routine to repetitive. As well as the distinction between “advising” and “execution”, Tim Bratton distinguishes between “business as usual” work and work where the lawyers can make the most impact on the business. LOD lawyers are used for peaks and troughs in demand, but also for the “doing” which otherwise requires full-time staff or the use of external law firms. It leaves the in-house team free to concentrate on the advisory work.
Two articles in the Lawyer, by editor Catrin Griffiths, cover a slightly different aspect of dividing up the work. Her article, published on 20 June, is called Can the collaboration trend work in favour of the mid-size firm? The theme here is market segmentation which in this context covers both the appetite of corporate clients to work with different legal services providers for different tasks and, as a corollary, for law firms to stick to the things which they are good at, at which they can make money and which (by implication) they are interested in doing. One of the lawyers is quoted as saying “If you get it right then you accept there’s certain aspects of a job or a client’s work that you shouldn’t be doing and you need to find a way of resourcing that makes sense”. Another says “know your market, stick to it, and maintain discipline”. One firm divides work into “straightforward low value work and complex high-value transactions”, subcontracting the lower value work out to “a select group of provincial firms”; the result gives the client a mix of quality and lower prices.
Another Catrin Griffiths article, published in the Lawyer on 16 June, is called Out-of-London is the new London which looks at the way law firms are distributing functions to “add-on offices”. I fielded a US law firm enquiry this week about regional centres with a suitable combination of sensible costs, staff availability and transport links. Last week I had a call which included the assertion that all work with a high eDiscovery component goes to London; if that is right, then clients have a long way to go in their analysis of the best and most cost-effective ways to get the work done. These things are not direct corollaries to each other, but they point in the same direction.
Not all components of an overall task may require to be done by a lawyer. Litigation, and specifically eDiscovery / disclosure, is a good example of a component of litigation whose characteristics include, among other things: that it is high in cost and low in value to the client; that it may require specific skills and tools which are not present at every firm; and that the flow of work is uneven but often urgent when it happens. This brings me the article to which I referred in opening called Corporations Moving Into the E-Discovery Driver’s Seat by Matt Mohwinkle of Xerox Litigation Services and Joy Holley of Bryan Cave. Its theme is that there are two approaches to the execution side referred to by Tim Bratton which, although diametrically opposed in form, both follow from a more thoughtful approach from companies as to how work is done and by whom.
One of the models is the outsourcing of certain litigation tasks to a single provider or a panel of providers, allowing the corporations to “leverage the specialised services of vendors and maintain their focus on the big picture case strategy rather than scrambling to meet the demands of fast-paced discovery deadlines”. The opposite, but equally interesting approach, takes more of the eDiscovery process in house; companies are increasingly concerned about security and confidentiality so that cost control is not the only reason for bringing this type of work in-house. The security point arises partly because many companies are chary of their lawyers’ ability to protect data against the ever-increasing threats from hackers and other bad actors – lawyers are “the soft underbelly of Amercian cybersecurity” according to one recent commentary – and partly because every transfer of data raises privacy concerns.
If you detect that the Xerox Litigation Services / Bryan Cave article is even-handed as between General Counsels’ options, a glance at their respective websites will show that they are ready to help corporate legal departments whichever way they want to go. Xerox XLS offers everything from behind-the-firewall installations of its Viewpoint litigation software controlled entirely by the user, through to a fully-hosted model in which Xerox XLS have a consulting component designed to relieve the company and its lawyers from the mechanics of eDiscovery; a company or law firm can choose, as a policy or case by case, how much or how little of the work is done in house. General counsel can take his or her pick depending on a range of factors which include control, available resources, risk and security as well as pure cost.
Meanwhile, Bryan Cave’s commercial litigation page says that they “embrace alternative fee structures that align our interests with our client’s interests and give our clients predictability with respect to cost”.
The present round of tough pressure imposed by corporate clients on their lawyers appeared rather brutal. GC’s budgets had been cut at a time when there was more work to do, and they simply passed on the cuts. It all felt like Herr Flick’s Gestapo version of the Hokey Cokey (from ‘Allo ‘Allo – you can find it on YouTube) which goes like this:
You put your left boot in
You take your left boot out
You do a lot of shouting
And you shake your fist about
You light a little smokey
And you burn down the town
That’s what it’s all about
As Susskind noted, however well it was dressed up, many law firms reacted as the town burned down by simply cutting their rates, laying off staff and battening down the hatches. As appears from the articles referenced here, we are now seeing more imaginative approaches: there are those which specifically address litigation and eDiscovery / eDisclosure (the Belfast review operations, the Xerox-XLS range of software and services, the Bryan Cave commitment to align their interests with those of their clients): we see the broader concepts summarised in the articles by Catrin Griffiths; we get the business model of Lawyers on Demand, something which will, I suspect, be iterative and self-fulfilling (the model reflected a demand and the existence of the model will generate further demand).
Many law firms and eDiscovery / eDisclosure providers are not merely passive players in this shake-up. Many seem actually to relish the challenge. That’s what it’s all about at the moment.