During this year in particular, partially because of the Presidential election, there has been a lot of talk about the negative side of outsourcing, especially offshoring. There is definitely a feeling by some Americas that offshoring is wrong, is somehow less than American. Which is strange, since so many of the jobs that have been offshored are to build the consumer electronics and staff the support services that just about every American uses. Corporations outsource because it lower the cost of the goods they sell, and if it is done well, improves the products we use. Even so, there are some Americans that only want to look at one side of the equation, and aren't interested in a fair evaluation. Of course, even these individuals are less supportive of protecting the jobs of one particular group: The LAWYERS!
Ever since Shakespeare penned the words, “The first thing we do, let’s kill all the lawyers,” there has been a strained relationship between citizens and the legal profession. However, the Bard’s famous words are often misunderstood. It was a villain, Dick the Butcher, that said these words. Dick is a murderer, telling us that lawyers are an impediment to the bloody revolution he desires. Here, lawyers are the heros of the tale. But that’s not usually the way we usually interpret this line. Instead, we are more likely to think that the courts are a bad thing. If you are a citizen or a corporation, you know that legal costs are incredibly expensive, and a costly lawyer doesn't even guarantee that you will get a favorable outcome. It’s ironic that our system of democracy was based on both the ability to elect officials and our right to seek relief from injustice in the court system. If we can’t afford to use the courts, we are losing our fundamental rights as citizens.
In the UK the legal system works a little bit differently, but both of our legal systems face the same problem. The cost of litigation is rising so quickly, that many citizens are losing their fundamental rights because they cannot afford to be represented in the court system. The honorable Sir Rupert Matthew Jackson put it this way, “In some areas of civil litigation costs are disproportionate and impede access to justice. I therefore propose a coherent package of interlocking reforms, designed to control costs and promote access to justice. “ Access to justice. That’s what our courts are supposed to provide. While Justice Jackson is looking for ways that the court system itself can reform, even greater benefits can be had by reforming law firms and legal departments.
Over the years various attempts have been made to control legal costs. There have been efforts to create “plain English” contracts, Paralegals were created as a lower-cost alternative to lawyers, and many state and federal efforts have been launched to simplify laws or limit the number and size of lawsuits. Despite these efforts, litigation has exploded in recent years. For example, patent litigation has increased by 230% since the 90s. In medical malpractice, the value of the awards nearly doubled in the same period. And the cost of each case is increasing, primarily due to changes in technology. Most lawsuits require evidence that used to exist in paper documents. Today, they exist in electronic documents that have proliferated as we all make use of email, instant messages, and other forms of communication that leave behind documentation. While we can expect growth in the number of emails until they peak in the next 5-10 years, we can expect much more rapid increases in, other forms of electronic communications (text messaging, social media, instant messages, etc.). All of these files and documents must be read and analyzed in order to be presented in court. E-documents may be the most significant driver in legal costs today.
That’s why Legal Process Outsourcing, or LPO, has been a major growth area in outsourcing. There’s a big gap between the work that lawyers need to do, and the technology that they have to support their work processes. Lawyers, more than other professionals, tend to be constrained by tradition. However, we’re reaching a tipping point where the gap between how lawyers do work today and how they should do it is so great, that first movers who adopt a truly leading edge approach will have an overwhelming financial and quality advantage. There are three main areas that are ripe for change:
NON-LAWYERS: Some of the work performed by lawyers, at lawyer rates, can be done equally well (if not better) by less expensive staff. For example, document reviews can be performed by paralegals, or student lawyers. Take it even further and these positions can be performed offshore. For a lot of basic filing, document review, creation of draft contracts, etc. it can be performed by offshore lawyers if necessary, but can be done by onshore paralegals in a lower-cost area. This isn't just a matter of cost. We know that critical functions like document review, are fundamentally broken processes. In reviews of real document reviews, the number of flaws and mistakes is extremely high. One study places the “quality” level of the average review as low as 50%. As long as these functions stay in the hands of lawyers, who need to perform a very wide range of functions, they may never be able to increase their expertise in document review. Likewise, a small law firm may not be able to retain all of the quality and project management expertise they need between reviews, and will constantly re-invent the wheel… a very inefficient and expensive wheel.
TECHNOLOGY: While technology has taken over many tasks in other fields, law remains far behind on the technology curve. This is due to the conservative nature of lawyers, and the rapid changes in the law and in the volume of work needed for litigation. Technology provides an incredible boost in productivity to just about any legal function. Document review is the perfect example. Technology created the vast number of documents that need to be reviewed, it’s only fitting that the solution should be through technology. There is a wide range of tools to simplify a Technology Assisted Review (TAR), and reduce costs. Even more importantly, computers have proven that they are more accurate than people when it comes to consistently finding the few relevant documents in a massive collection of document. Computers can also create transcriptions from voice recording, document management systems can efficiently file and retrieve court documents, and many applications designed for other professions can be successfully adapted to the legal world.
OUTSOURCING: Rather than performing the work in-house, it can be sent to domestic and offshore providers to be completed for a fraction of the price. A specialty outsourcer will not only be able to match the work to lower cost workers, but they will also have the expertise to understand and maintain the technology needed to create a very high quality and extremely low cost results. Smaller law firms and departments have fallen even further behind because they lack the IT staff and other specialists to keep up with leading edge innovations.
The rising cost of litigation has become the single greatest threat to democracy in the 21st Century, far more so than any concerns about outsourcing. We must find and employ better models for providing legal services if the average citizen is to retain their right to use the court system. A combination of outsourcing and effective technology can dramatically reduce the cost of litigation, and give us an efficient court system for the 21st century. Kill all the lawyers? Maybe not, but we do need to work with lawyers to make our legal system affordable again!