Legal Process Outsources
Outsourcing is an effective cost-saving strategy when used properly. It is sometimes more affordable to purchase a good from companies with comparative advantages than it is to produce the good internally. An example of a manufacturing company outsourcing would be Dell buying some of its computer components from another manufacturer in order to save on production costs. Alternatively, businesses may decide to outsource book-keeping duties to independent accounting firms, as it may be cheaper than retaining an in-house accountant.
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Legal outsourcing refers to the practice of a law firm obtaining legal support services from an outside law firm or legal support services company. When the outsourced entity is based in another country the practice is sometimes called Offshoring . Legal Outsourcing has gained tremendous ground in the past few years in the United States. Legal Outsourcing companies, primarily from India, have had success by providing services such as document review, legal research and writing, drafting of pleadings and briefs and providing patent services.
In-house law departments of major multinational corporations outsource some of their work in order to save costs. While it will not be prudent to list those firms here for confidential reasons it is expected that as they move to save costs they will outsource more work. Initially, the Asian subcontinent were targets for different types of outsourcing with the legal field gaining traction. However, in recent years the so called “near shore”, “back-door” “specialized legal firms” have sprung up to satisfy law firms and corporations that demand quality and confidentiality.
Legal Process Outsources
Advantages
Most firms and corporations outsource primarily for cost saving measures and this is considered the biggest advantage for legal outsourcing. While an attorney in major legal markets such as the US charge at minimum 250 dollars for work, countries that are offering legal outsourcing may charge a fraction of this. Some countries, especially in the sub-continent have gained prominence due to the fact that some of their attorneys with higher degrees work at meager salaries. This has attracted major corporations to outsource some minor and less sensitive work in their legal departments. Another advantage is turnaround time
Legal Process Outsourcing of First Level Document Review
Over the last several years, the proliferation in electronically stored information (ESI), such as email, instant messages, electronic documents and data on handheld devices, has drastically changed the litigation practice. As a result of this data explosion, the complexities associated with performing first level document review have accordingly increased, and with them, the corresponding costs
KPMG estimates that first level document review encompasses anywhere between 58% and 90% of total litigation costs. This is a huge piece of the litigation costs pie. Therefore, companies are quickly working to identify strategies to control and reduce these costs. As such, interest and demand is growing in legal process outsourcing (LPO) that allows for economies and efficiencies in first level document review. This article explains the basics of first level document review, why to consider outsourcing this function and how to go about selecting a service provider to work with.
First Level Document Review: What It Is
The primary purpose of first level document review is to review documents and determine whether or not they’re “responsive” or “non-responsive” as they pertain to a specific legal case or issue. In essence, first level document review forms part of the discovery phase of litigation. It is performed prior to producing and after receiving documents pursuant to a legal “Request for Production of Documents.” It’s the initial review phase that helps narrow the document set to a responsive and workable data set for later, more senior review.
Typically in litigation, vast amounts often numbering in the millions of documents are routinely being reviewed by teams of law firm associates, contract attorneys and paralegals, in an effort to identify whether or not documents are:
- Relevant to the case at hand
- confidential
- Privileged/protected
- “key,” or “hot.”
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The Technology Fix
Technology has been a mixed blessing in the litigation cost-hike dilemma. On one hand, the growing amount of ESI is a large part of the problem. For example, well over 90% of all current data is being produced and stored electronically. People are storing and producing more ESI because the costs associated with it are practically nonexistent. Therefore, as ESI increases, so do the hours and expenses associated with first level document review.
TOn the other hand, the last 10 to 15 years have seen a dramatic transition that has allowed technology to play an integral role in the document review process. Gone are the days when attorney and paralegal teams gathered in large rooms or warehouse-style environments (known as “war rooms”), meticulously going through bankers’ boxes filled with paper documents in preparation for litigation. Instead, the war rooms have transformed into computer-filled rooms where teams of people are armed with electronic platforms and technological solutions in an effort to identify responsive data.
However, even with the best technology and electronic discovery (e-discovery) practices, the truth of the matter is that robust technology can only do so much. It is understood that current industry e-discovery best practices can reduce a data set by as much as 70%. But, like many litigation cases to date, even after performing e-discovery best practices, what if that data set still consists of 25 million pages to review?
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Inefficiency drivers in first level document review are the drivers behind LPO. These include the following.
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Costs
Current US practices have law firm associates, contract attorneys (typically hired through staffing agencies), unlicensed law school graduates and paralegals performing first level document review functions. The billing structure for these services is still akin to traditional per-hour law firm billing, although at a discounted rate. Many times, billing is comparable to what a mid-sized law firm bills for its associates.
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Inconsistencies
This is not to say that the individuals performing first level document review are directly inconsistent. Rather, inconsistencies are inherent in the current domestic model of document review. US practices lack constant and consistent teams to perform document review.
Typically, teams are rounded up and dismantled on an as-needed basis using attorneys, paralegals and law school graduates that are often undergoing transition themselves, having moved to a new city, searching for employment or awaiting bar results. This, in turn, has created a “day laborer” mentality, powered and weighed down by a constant “turnover” of first level document reviewers. For example, it is not uncommon for document review teams to start with 40 to 60 individuals and during the course of the project to lose over half of the original team
With costs and inconsistencies in mind, high document reviewer turnover has not only affected the consistency of first level document review projects, but has led to an inefficient model of “train and retrain,” ultimately exploiting valuable client resources and time.
The India Solution
As US litigation costs soar, LPO provides a solution for alleviating first level document review inefficiencies. And India is proving to be a country that many companies are turning to for its large and skilled workforce.
In terms of LPO, India possesses the following desirable characteristics:
- Political and economic stability with a high – quality, low – cost and flexible workforce
- One of the largest pools of English – speaking graduates in the world.
- English as the language of instructions in law schools
- Time differentials that allow for around-the-clock document review.
- Advances in technology that allow for remote and secure document review.
- The ability to maintain a constant and consistent team of trained individuals at reduced costs
Collectively, these factors, in addition to established processes and procedures (discussed below), support a recipe for reducing inefficiencies in document review.
Processes and Procedures of LPO
The primary success factors for first level document review LPO in India rest on detailed and measurable processes and procedures. To be successful, your LPO service provider must be armed with the following:
- A team with a proven track record.
- One of the largest pools of English – speaking graduates in the world.
- Attorneys from the best law schools in India.
- Legal staff managing projects both domestically and in India.
- Intricate understanding of the US legal system, with continuous training and education.
- Identifiable and measurable quality control measures.
- High-level management skills and operational experience.
- Best-in-industry e-discovery technology, tools and processes
- The ability and willingness to stay apprised of e-discovery case developments and nuances.
- Legal staff managing projects both domestically and in India.
- Intricate understanding of the US legal system, with continuous training and education.
- Close collaboration with clients (company/law firm) and case-specific legal training.
- Close collaboration with clients (company/law firm) and case-specific legal training.
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