I reported several weeks ago that I had been solicited to write an article about the future of Biglaw firms. But it was actually better than that: The invitation came from the “Sunday Review” (formerly “The Week In Review”) section of The New York Times, which is a pretty cool place to ask you to write.
Unfortunately, and apparently unbeknownst to the editor of the “Sunday Review” section, the Times ran a “DealBook” section on the fate of large law firms before my ditty could appear in print. This preempted my article (or at least that’s what the editor said, although maybe she was just sparing my feelings). So instead of having a piece in the NYT, I’m just another schlub typing away at Above the Law.
But if I took the time to write a 1,200-word piece on the future of big law firms, then I’m sure as heck going to get some use out of it. So here you are: “The Assault on Biglaw,” by yours truly, which damn near appeared in the Sunday Times….
In light of the possibletrouble that may lie ahead for large law firms, it should come as no surprise that some of them are battening down the hatches. One way to prepare for a tough economic climate is to reduce one’s expenses. And one way to reduce expenses is to conduct layoffs, of attorneys or of staff.
But the work, the work that generates revenue for firms, still needs to get done. One way of reducing expenses while still getting all the work done is to outsource certain functions to an outside service provider. This effectively gets job positions “off the books” of the law firm, which no longer has to pay salaries or benefits for the lawyers or staffers in question; the law firm just has to pay the vendor. (This could be viewed as a form of financing; as you may recall, cash-strapped Dewey used vendors for many services — vendors who are now its creditors in bankruptcy.)
Let’s learn about the latest firm that is reducing the ranks of its staff in favor of relying on an outside company….
I guess Lexington, Massachusetts, wasn’t quite desperate enough to offer a big firm a better deal.
Last month we told you that Biglaw firms have encountered success in putting offices in small cities staffed with non-partner track associates and back office personnel.
The trend now continues with Bingham McCutchen’s announcement that they are opening a “Global Services Center” in Lexington, Kentucky. The center will eventually house 250 employees who will handle administrative support functions for the firm. Some current Bingham employees will be given the option of relocating from Boston to Lexington.
Hmm… this reminds me of another person who went from Kentucky to Boston and then back to Kentucky. “Newbury Street isn’t walking through that door, Bingham staffers. Quincy Market isn’t walking through that door, and Fenway Park isn’t walking through that door. And if they did, you’d still be living in Lexington freaking Kentucky.”
Oh, I kid. In all seriousness, though, and from the firm’s perspective, in-sourcing is clearly the way to go…
Here’s the thing about these “onshore,” “insourcing” operations: they are successful. Ridiculously successful. In an article in the Pittsburgh Post-Gazette, Orrick chairman Ralph Baxter called the decision to open the Wheeling center “one of the smartest decisions we’ve ever made for the firm and our clients.” And that’s coming from a man who made the smart decision not to merge with Dewey Ballantine.
That’s why every Biglaw managing partner, and every law student thinking of taking out hundreds of thousands of dollars to go to law school, should pay attention to what’s going on in Wheeling…
Over the summer, we wondered: what can law firms do to prepare for a possible double-dip recession?
One obvious answer: firms can “right-size” themselves, by making sure that they are as lean and as mean as they can be. And this seems to be what has been happening over the past few months.
We haven’t seen much in terms of lawyer layoffs lately, but staff layoffs are another story. In fact, on the staff side, we seem to be looking at a trend of firms reducing their permanent staff positions in favor of outsourcing.
Hot on the heels of support staff layoffs and on-shore outsourcing efforts at O’Melveny & Myers, we have news of another law firm doing the exact same thing. Except this law firm has figured out a way to do it with half the tears and way less relocation angst.
Oh happy Indian man, you know this globalization trend works both ways, don't you?
Protectionism is a song as old as time. We do it, and other countries do it to us. Every country is trying to figure our how to maximize the benefits of globalization without making their own people join a frenzied “dey tuk er jerbbbs” mob.
And that’s fine. This economic competition is good for standards of living all across the world — unless, of course, it leads to nuclear war.
But sometimes the lack of global reciprocity can become maddening. Take the outsourcing of legal work. For years we’ve been talking about how entry level, “document monkey” jobs are going from junior Biglaw attorneys to cheaper workers in India and a few other countries. Ever since the American Bar Association changed its rules in 2008 and allowed American legal work to be done offshore, competition from India over low-end legal work has been a key factor for those who care about the future of Biglaw.
And yet India remains a closed legal market to U.S. and British firms. Western firms are not allowed to do legal work in India, even though Western firms and clients are free to send work to India at the cost of American jobs.
Does this mean whoever keeps an eye on the Indian legal economy is doing a far, far better job than our own American Bar Association? Sure. But it’s hardly breaking news that the ABA is ineffective.
What’s far more newsworthy is that this fundamental inequity between the two legal markets might be changing — not because the ABA is magically getting its act together, but because Indian authorities might be willing to stop being a$$holes….
While at the Legal Technology Leadership Summit, I attended the panel entitled “Legal Process Outsourcing and Insourcing.” As I mentioned on Twitter, when I go to conferences I enjoy attending the panels that are most likely to cause pain and suffering among junior attorneys. It’s kind of my thing.
Usually, anything involving outsourcing is a good bet to make junior attorneys scream expletives at God before drinking themselves into a stupor. But this panel was surprisingly positive about the future of Biglaw attorneys in a outsourced world — and not just the career associate types. The panelists saw a future for regular partner-track associates with dreams of a better tomorrow.
Of course, even under the rosiest of scenarios, Biglaw firms will lose money as more companies outsource, but corporate GCs don’t so much care about that….
The information age we live in can be a blessing and a curse. Few fields demonstrate this truth more persuasively than the realm of electronic discovery.
During a panel here at the Legal Technology Leadership Summit on the theft and exfiltration of intellectual property, the panelists discussed the exponential growth in information densities, the increasing importance of IP, and the challenge that evolving technology presents to the governing legal frameworks. As one panelist noted: “Technology leaps, the law creeps.”
What does rapidly changing technology mean for the e-discovery world? And what are some considerations that in-house lawyers should keep in mind when responding to e-discovery requests?
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