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According to Legal Technology News, the volume of litigation is rising but the amount of money being spent is falling. LTN quotes Robert Ingato, general counsel at CIT Group Inc., said the drop in cost comes from better use of data to target how the money is spent. New York City is using the same idea to manage the cost of litigation by expanding the number of lawsuits.

Wait a minute... NYC is saving money by spending more time in court? Big corporations and municipalities are lawsuit magnets; they get sued often, and each case is expensive. For each case, a decision must be made if they fight, or settle. Every organization uses a different set of criteria to decide when to pay and when to pursue, but in the past, the criterion was based on very imprecise data. Senior decision makers might set the rules for pursue or pay based on their experience years (decades?) earlier, when they spent more time in the court than the boardroom. This outdated and arbitrary data has led to higher legal bills for clients and corporations.

Today, law firms are using databases that provide more precise data on the potential cost of a lawsuit, especially e-discover and document review costs. Cost data is then compared against the probability of wining or losing a suit, based on the specific metrics of the case. NYC is now pursuing cases that were once settled early in the process. However, a big part of the cost of litigation is discovery and document review, and these costs are driving the pursue or pay decision. But those costs are about to change.

Technology Assisted Reviews (TAR) are far more efficient and much less expensive. New standards and new court findings are moving the courts towards more TAR and fewer obsolete Linear (or manual) reviews. That will slash the cost of review, and move more municipal and big corporate lawsuits back into the court. Which means that staff lawyers can spend more time on issues of law, and more of the discovery / document review work can be outsourced. The combination of more lawsuits, and more e-discovery, there is going to be a boom in ediscovery firms that specialize in TAR.

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In the last blog we learned that, after a series of well publicized industrial disasters, Walt Disney Company has decided to leave Bangladesh. Other major firms have decided that they are going to stick it out, and try to drive change in Bangladesh. However, different firms have decided to try different approaches.

A coalition of outsourcing clients from the US and Europe... including H&M, Benetton, J.C. Penny, Zara and the Gap... are working together to negotiate an agreement on fire inspections and building safety. This represents a historic example of industry negotiation, which shows that for all its problems, Bangladesh still has significant value to these retailers.

Walmart, the world largest retail store, is taking a very different approach. With 279 locations in Bangladesh producing goods for Walmart, they want to directly manage any changes and are committed to personally inspecting all manufacturing sites within six months. Unlike the industry agreement that the coalition is negotiating, Walmart's inspections carry the potential for contract cancellations.

Which approach is best? It depends on the company. Disney's decision to leave Bangladesh may be based on information that the public doesn't yet know about. However, merely leaving a country with problems without changing your approach to outsourcing won't make any lasting changes. The coalition approach may be the best for companies with a smaller investment in a country. Walmart's "take charge personally" approach makes sense for a massive outsource, especially after the supermarket scandals in Europe; supermarkets failed to personally test their "beef" products (or wanted to know their contents?), but easy to use DNA tests were available and were eventually used to expose the widespread use of horse-meat and other "banned" products.

Leave, do it yourself, or join the crowd... each is a legitimate approach. Depending on your needs, each approach may be the right one. But any approach to continue operating in Bangladesh, or any other country without robust and well enforced worker safety regulations, needs to include active management or monitoring. Otherwise, your firm just might end up on the cover of your favorite newspaper, in a story that you would have prefer to to have featured your competitors!

Photo: © Microsoft Corporation

The Walt Disney Company has decided that Bangladesh lacks enforcement for the basic safety regulations it needs for any location where they or a partner will conduct business. Disney is in the process of winding down production, and finding new locations for manufacturing. Is the problem Bangladesh, or are the repeated industrial disasters in Bangladesh a problem in outsourcing?

As stated in other blogs, the textile industry has a bad reputation when it comes to safety. In the US it was a textile disaster in New York City, the fire at the Triangle Shirtwaist Factory, that started the industrial safety movement a century ago. Just as the tragedy in Sandy Hook focused attention on the epidemic of gun violence in the US, so too did the death of nearly 150 textile workers galvanize a movement for safer working conditions. In Bangladesh, the building collapse has gained the most attention, but just a few weeks earlier 150 workers died in a fire, and a few days ago a smaller fire in another factory was fatal.

While the building collapse that killed over 1,000 works is understandably at the center of the discussion, fires have traditionally been the cause of large-scale industrial accidents in the Textile industry. Dust from fiber cuttings, flammable fabrics before they are fire treated, and storehouses filled with raw textile fibers all make fires easy to start if the facilities are not kept clear or do not have good fire safety features.

Disney's reaction is understandable, and it may be that the conditions in Bangladesh are too great for them consider other actions. However, if Disney is attempting to improve worker conditions, they might learn from the model that Apple is following in China. Foxcomm, the firm that manufactures the iPhone and other goods with the Apple brand, was abusing workers and underpaying them. Instead of breaking their contract amend moving the work, Apple continued to engage with Foxconn. Today, there are better working conditions and worker wages have nearly doubled.

Was worker safety the key to Disney's decision to exit Bangladesh, or will their procurement process just lead them to the next lowest-cost provider, in another country with weak worker safety laws? Keep reading this blog and find out!

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The latest cyber crime is a $45 million-dollar bank robbery. This is one of the biggest bank heists in history, bigger than anything Jesse James or Butch Cassidy ever imagined a robbery of this size! It is also THE bank heist of the 21st century, because of it's blending of cyber and bricks and mortar techniques. Let's see how it all went down!

According to Fox News, these criminals gained access to the systems that controlled the credit cards for the two Middle Eastern banks, one of which was the National Bank of Ras Al Khaimah PSC. Armed with credit cards that were altered to have unlimited credit, teams of operatives around the world went to hundreds of ATMs and made thousands of withdrawals, filling duffle bags and backpacks with wads of cash. This virtual/reality project could have used a better HR department. The team members working the ATMs weren't very sophisticated. The team in New York was photographed at every ATM, and didn't bother with disguises or even covering their faces. Team NYC is already in jail.

What makes this story particularly interesting is the way the robbers could create "unlimited" credit cards. Rather than hacking through the bank's firewalls and taking control of the bank's servers, they had a different idea. They applied for jobs at ElectraCard Services, in India. The bank that were robbed had outsourced credit card services to ElecraCard. The robbers believed that it would be easier to get the access they needed to the credit card system if they wokred at the outsourcer, rather than the bank. Apparently, they were right!

Did the banks intend to transfer the rights to setting credit card limits to an outsourced credit card processing firm? Probably not. But when you don't examine your systems, or put the time you need into security planning when you outsource, or if you simply look for the lowest cost "total outsourcing" agreement you can find, you're looking for trouble. Or in this case, trouble is looking around the world to find you!