In today’s turbulent economy, corporate litigation clients are expecting the highest-quality legal services while demanding creative cost cutting solutions.   In-house counsel and finance departments are closely examining legal budgets and slashing unnecessary costs and questioning going through all expenditures with a fine tooth comb. An area that is continually stunning in house counsel is the shocking cost of large-scale discovery and the review and processing of electronically stored information (“ESI”). 

An entirely new industry is exploding in response to the need for more cost effective solutions. Business professionals armed with sophisticated technology are creating a perception in the marketplace that clients can either choose between expensive and old-fashioned methods employed by law firms, or outsource the work to companies using efficient and low-cost alternatives. 

So, how are these consultants prying work out from underneath us?  They are capitalizing on two hefty shortcomings in traditional law firm operations:

1. First, that as unapologetic luddites, we are embarrassingly slow to embrace new technology.

2. Second, our time-honored and cherished hierarchy of junior associates, of counsel and partners is no longer always the best way to staff large document review cases.  As a result, these shrewd legal consultants, technology specialists, staffing agencies and legal process outsourcing companies are all grabbing the attention of our clients with unsupportable claims that they possess the secret key to dramatically reducing litigation costs by as much as 90%. 

What gives?  Why are there hundreds of new companies convincing our clients that they can do a better job in litigation than we can? 

First, there is no question that the legal industry has failed to maintain pace with the technological advances enjoyed by the rest of the corporate world.  We are constantly adjusting and reacting to the developments made by our clients rather than anticipating them.  We greatly undervalue our information technology departments and routinely shun any suggestion that technological savvy is an occupational necessity.  But as a profession that bills our time hourly, we must understand and exploit every tool that could possibly reduce the time we spend doing our jobs.  In other words, we can’t just know what to do; we have to know the best way to do it. 

Second, the explosion of ESI has amplified one aspect of litigation in particular; the review and analysis of massive volumes of information, most of which is only marginally relevant to the issues in the underlying litigation.  Contrary to what the outsourcing industry wants us to believe, this drudge work is nothing new to the legal industry.  For years, junior associates have been paying their dues sorting through dusty cardboard file boxes in warehouses.  What’s changed is the sheer volume of information that needs to be evaluated, and the speed at which the courts expect us to produce it.  Most large law firms have failed to adjust to this change by restructuring staffing models appropriately.  Instead of meeting our client needs with an assortment of attorney capabilities at a wide range of hourly billing rates, we have insisted on charging standard associate fees.  Our stubbornness makes us vulnerable to charges of over-billing and susceptible to lower-priced competitors.  

Finally, it is worth noting that the brainy consultants making these claims slyly dismiss ultimate responsibility and accountability for any work with which they assist.  What they don’t advertise is that they are completely unqualified, not to mention professionally prohibited, from delivering final sign-off (i.e. completing) any document review or discovery project.  Therefore, the prices they quote are never the actual cost, just a portion of the total cost. 

As lawyers, it is high time for us to wake up and adjust our professional training and firm organizational structure to meet the needs of our clients. Change is never easy but better that it comes from within the law firms rather than forced upon us as profession.  Clients should not have to choose between competent representation and reasonable costs.  We need to face this issue not just so we can keep our clients, but because it is our professional and ethical obligation to do so. 

(Hardinger & Tanenholz LLP is a Discovery Counsel law firm based in Washington, DC.  More information about their unique practice can be found at www.hardingerlaw.com).