Have Wilson Sonsini Read "The End of Lawyers?"

I thought I would make an extremely brief observation following my review of today’s legal blog watch and several other postings. Both Richard Susskind’s Harvard address and the Wilson Sonsini “term sheet” announcement appear to have been referenced repeatedly on most legal blogs throughout the course of the day. None of the postings I have read though appear to have linked the two newsworthy items together. Law.com’s legal blog watch even had the Wilson Sonsini piece following immediately after the Susskind review, but failed to comment on the “coming to pass” of one of Professor Susskind’s “predictions”.

Those who have read Richard Susskind’s thought provoking book “The End of Lawyers?”, or listened to the Harvard address will be aware that he repeatedly ponders the legal profession’s journey, and indeed the pace of such a transition, along a continuum, from bespoke legal services to commoditization. He argues that law firms have to date been slow to package their expertise for clients to use for themselves.

Professor Susskind foresees a future where only those firms that proactively innovate along such lines will in the long run be successful. Within the next ten years, the internet will be the first port of call for those seeking out legal advice and assistance. Whether the search and procurement will be through social and/or professional networking, online legal services, auctions, open sourcing, or some other methodology, is yet to be finalized. However, for an upcoming generation who cannot recall life prior to the internet, this will be the standard modus operandi for obtaining legal advice.

I am unaware if the Wilson Sonsini Term Sheet Generator is the first example of its kind, however, I can guarantee it certainly won’t be the last. What surprised me was the lack of any connection made between the Susskind posting on legal blog watch and their subsequent Wilson Sonsini announcement coverage. The Term Sheet Generator is a computerized service that walks users through about 100 questions to create a term sheet outlining the financing terms and conditions of a business agreement or deal. This initially originated as an internal tool for Wilson Sonsini lawyers to rapidly generate draft term sheets, which they would then polish up and then deliver to their clients. I applaud the firm for taking such a proactive approach and reexamining exactly how they deliver value to their clients.

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Panel Speakers Confirmed for FT Legal Process Outsourcing Roundtable

A quick reminder to my readers, that the Financial Times Global Outsourcing and Offshoring Conference is taking place at the Andaz hotel, London, 27-28 April.

The Legal Process Outsourcing roundtable is being held on April 28th. Confirmed panelists include senior figures from leading U.K. and global law firms and LPOs.

Panelists include:

Mark Ross, Vice President of Global Sales and Marketing, LawScribe, Inc.
Nigel Emmerson, Partner, Dickinson Dees LLP
Iain Monaghan, Senior Partner, Pinsent Masons LLP
Bavita Rai, Partner and Head of Litigation Operations, Weightmans LLP
John Croft, President, Global Sales and Marketing, Integreon Managed Solutions, Inc.

The roundtable will provide attendees with practical insight and case studies addressing the substantive concerns surrounding LPO, including selecting which services to outsource, sourcing a service provider, and structuring an LPO outsourcing agreement. Speakers will share their ideas on the dramatic changes taking place in the legal profession, the ethical implications specific to LPO, and the most effective LPO operating strategies before, during and after the implementation process.

If anyone would like further information on the conference or the roundtable feel free to contact me directly.

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LPO, a Band Aid or an Innovative Solution?

The posse list blog reports today on an interview provided by Tess Blair, head of the e-data group at Morgan Lewis discussing LPO in the context of the e-discovery arena. She is quoted as saying:

“We’ve heard; for example, talk over the last several years of off-shoring or legal process outsourcing. That addresses the labor issue. Do we want to pay domestic contract attorneys, or law firm associates versus, perhaps, lower cost legal professionals and others offshore - India, the Philippines, where have you, to do this work? I think that only gets us part of the way there …………….My firm, for one, is moving away from hourly billing. We’re doing all-in pricing for our discovery work so that they get one bill and they’re told upfront what it’s going to be when a discovery project is launched. Those two pieces are much more important than some of these other band-aid type approaches like l.p.o”

According to Blair the real problem is that of volume. If you pay a lower hourly rate, but the size of the document set is still excessive, ultimately the cost sustained will remain significant. She advocates solutions including new technologies, new approaches and a move away from the traditional billable hour. Makes sense, no?

Of course it does. However, to label LPO as solely concerned with exploiting the labor arbitrage benefits, available through leveraging talent in India or the Philippines, is both untrue, and evidence of a lack of recognition of the innovation that LPO has brought to the table.

Blair comments that her own firm is moving away from traditional hourly billing for document review, and providing all in pricing for e-discovery projects. Now I don’t want to be accused of “blowing my own trumpet”, however, having been involved in LPO, long before the acronym itself existed, I reference the opening paragraph of my article, Time to Stop Time Recording, first published over three years ago.

“Clients are demanding greater transparency of charges, pushing law firms to change their old ways and move to fixed fees and offshoring. In the future, the success of your firm will depend on how you embrace new technology and how you approach offshore legal services, shared knowledge and fixed fee charging.”

I’m sorry, but who led the cavalry charge on innovative e-discovery and document review pricing models, from a practical perspective? It was the LPO industry. Well over a year ago, in February 2008, LawScribe launched synerge (a revolutionary, per document, end-to-end e-discovery and document review service). Integreon followed shortly thereafter with their doctane service offering. Pangea3, Mindcrest, Clutch, American Discovery and other leading LPOs all offer per document pricing.

Furthermore the “O” in LPO stands for “outsourcing” not “offshoring”. None of the aforementioned LPOs are restricted to just the Phillipines or India. Whether through wholly owned subsidiaries, dedicated delivery centers, joint ventures, or strategic partnerships, all are capable of providing a “best shore” or “blended shore” solution. Yes, the labor cost in India and the Philippines is lower; however, to intimate that this is all that LPO brings to the table is to be sorely mistaken. Cutting edge technologies, stringent security (above and beyond what is prevalent in the vast majority of domestic based law firms), and innovative solutions including non linear review, multi-shore operations, and fixed pricing, are all commonplace within the leading LPOs.

I am always happy to entertain discussion on the merits of offshore vs onshore, hourly vs fixed price. While I’m delighted that increasingly I am stumbling on articles from progressive figures within the AmLaw 200 corridors of power, discussing alternative fee arrangements, make no mistake about it, LPO opened the door for these firms to walk through.

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Future of the Legal Profession: Two Different Points of View

Interesting to note the disparate views expressed in two articles I read today.

Richard Susskind, leading legal evangelist, prophesier, technology guru, and renowned authority on future trends impacting the legal profession, provided the keynote address at this year’s ABA Techshow in Chicago. Legal Blog watch expertly sums up Professor Susskind’s session and I encourage you to check out Robert Ambrogi’s excellent posting. I will however paraphrase the main points:

• The current economic crisis will fundamentally alter the legal terrain.
• Clients want more for less. i.e. more legal services for less cost.
• Collaborative social networking tools will transform the delivery of legal services.
• Legal services are being commoditized.
• Legal services are being unbundled with constituent tasks outsourced.
• Advances in technology will fundamentally alter the delivery of legal services.
• The delivery of legal services will fundamentally change.

On the other hand, Morrison & Foerster Chairman, Keith Wetmore, clearly does not subscribe to the increasingly prevalent view, that the current economic downturn will leave the world’s top law firms irrevocably changed. The MoFo Chairman is quoted in thelawyer.com as stating that:

“I think it’s wrong to say things have fundamentally changed”

According to the article Mr. Wetmore’s position can be summarized as follows:

• The economy will grow again and when it does clients will need lawyers to advise on that growth.
• The basic law firm model will continue largely unchanged.
• Law firms’ operating models are based on a number of assumptions, one of which is annual attrition at circa 20-23%.
• Current layoffs are a result of a slackening in demand for legal services coupled with a halt in attrition.
• 85% of a law firm’s expenses are salaries and rent.

Mr. Susskind is preaching to the choir as far as I’m concerned. What I find illuminating however, is the faith demonstrated by Mr. Wetmore in the traditional law firm modus operandi. Maintenance of the operational status quo is apparently an option. This is despite 85% of operating expenses being salaries and rent, and a recognition that to function effectively, not only must there be a growing economy, but also ongoing high rates of attrition.

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LPO and India News Roundup

At the excellent Strategic Technology Blog,Ron Friedman references EDD consultant Conrad Jacoby’s proposition that ABA Opinion 08-451 opens up the proverbial hornets nest for BigLaw. Jacoby quite rightly reminds us that the due diligence steps incumbent on US attorneys supervising offshore legal outsourcing, defined within the Opinion, are of course simply a minimum requirement for any legal work which would otherwise be deemed the practice of law, delegated to an underling, whether domestically or offshore. Ron takes this line of thought one step further, and goes on to question whether BigLaw in-house document reviews would actually pass the ABA Opinion’s stipulated due diligence and supervisory standards.

Elsewhere, Lalit Bhasin, the President of the Society of Indian Law firms (aka King Canute), is once again heard taking a swipe at the inevitable liberalization of the Indian legal sector. The Economic Times of India, reports Bhasin as stating:

"The demand for opening legal services sector in India does not come from Indian businesses or professionals or even foreign multinational companies…. the demand comes from foreign lawyers and particularly those from the U.K.. It is obvious that the U.K. is witnessing a negative growth so far as legal profession is concerned. Accordingly, India and China offer good prospects -- but the problem is that, in India, the legal profession is not a business and it is not up for sale."

Stating that the legal profession is not a business, displays a lack of appreciation of the reality of the global profession within which we now all co-exist. The leading UK and US law firms have woken up to this harsh reality over the last 6 months. It is simply impossible to separate the law from the economic forces that impact every other professional services industry. The lack of reciprocity, which Bhasin references, for Indian attorneys wishing to practice within the UK or US, is also a false comparison. This is purely a protectionist stance, nothing more, nothing less. I have always argued for a leveling of the playing field for domestic Indian firms, prior to allowing foreign firms to practice within the country. I blogged about this in January, when I discussed the recently passed LLP Act. I wrote at the time:

“Originally introduced in January 2006, the bill itself will not liberalize the legal services market. However, assuming the necessary secondary regulations are passed, it will enable Indian law firms to form LLPs with no limit on partner numbers and allow foreign firms to form their own India LLPs.”

Now that the playing field, to a large extent has been leveled, it is only a matter of time before the floodgates open and some of the major foreign firms formally set up shop within India’s borders.

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