Litigation Support: The Last Area for Corporate Law Department Consolidation?
The understandable recent media spotlight on Artificial Intelligence transforming the practice of law (e.g., The New York Times’s noting Goldman Sachs’ estimate that 44 percent of legal work could be automated) has obscured a less shocking but still crucial milestone in the evolution of legal work management best practices.
According to the Association of Corporate Counsel’s Law Department Benchmarking 2022 report, the majority of corporate legal spend is no longer on outside counsel, but on the inhouse legal team itself.
The distribution of legal spend varies with company size: large companies continue to spend more on outside counsel than inhouse, but the overall statistic on majority spend validates the increased role and capabilities of a company’s directly employed lawyers. I’ve written previously on the steady growth of outside counsel empowerment. Faced with ongoing pressure to reduce the overall rate of legal spend – despite an increase in risks and in compliance complexity – the corporate law department has now reached a tipping point, at least as measured in dollars.
One area still lagging in leveraging and centralizing outsourced legal services is in the engagement of litigation support providers: the independent, non-lawyer professionals essential to the collection, establishment, and storage of evidence to establish rights and resolve civil disputes in courtroom proceedings. The early, eDiscovery portion of the litigation process has already undergone law department centralization as inhouse – rather than outside counsel – now commonly hire national professional providers. Law departments hire the data search and collection companies, rather than relying on less nimble and less-tech savvy law firms and partners to engage eDiscovery companies (or even ill-guided attempts for the law firms to do the eDiscovery themselves).
In case the historical trend is not persuasive enough, here are five reasons why a corporate law department should consider leveraging litigation support services via a pre-determined arrangement, rather than relying on their outside counsels’ contracting on ad hoc, case-by-case basis on their behalf.
1) Geographic Coverage with Consistent Quality Assurance
National providers have a comprehensive, geographically dispersed stable of experienced court reporters, translators, record retrieval specialists, and litigation support professionals, vetted and ready to assist.
Keep in mind that court reporters, as officers of the court, are independent contractors that must remain “fair and impartial” regardless of which of parties to the dispute have hired them. In some states, this understandable ethical requirement of impartiality is over-extended to restrict contracting on another than case-by-case basis. But even considering those protectionist fiefdoms, a national provider, sensitive to jurisdictional restrictions while firmly upholding court reporter impartiality, will be better able to provide in a timely way uniformly high quality, experienced reporters, rather than relying on a law firms’ ad hoc choosing. For a corporate law department, a national provider with full geographic capabilities eases the search, vetting, travel, and overall cost significantly, and provides clear and predictable costs and timetables for the non-lawyer professionals needed.
2. Development and Deployment of Technology
Corporate entities are not subject to the non-attorney ownership restrictions of law firms. National providers of litigation support professionals are also not subject to the small-scale operations limitations of smaller entities. Instead, they have the focus, business structure, and resources to invest, develop, and implement technology and processes that meet market demands and improve the litigation process.
This permits national providers to create and deploy efficient tech-enhanced services, particularly as the Covid-accelerated acceptance of remote efficiencies provides a new market need for digital-based solutions to supplement in-person proceedings. Advances in voice recognition and speech-to-text technology are similarly gaining acceptance, even as the labor market for court reporters is declining. Scalable technology is bringing down the costs and speeding up the process for civil dispute resolution in a just-in-time moment.
3) Wide and Deep Experience
National providers supply a complete roster of experienced professionals on a wide-ranging variety of cases. This high volume of differentiated legal work coordinated for clients provides a database of experience that accelerates the development of efficient processes and best practices.
National providers can also leverage this front-line data to assist corporations in developing more detailed early case assessments and more efficient litigation strategies, as well as fine-tuning efficiencies and responding to new market needs in evidence and testimony collection.
4) Centralized Coordination of Services
Before the final curtain in the often-long-playing drama of a legal proceeding, a corporate party to a lawsuit will need to assemble a huge cast of outsourced professionals. Court reporters, videographers, consultants, translators, record retrieval professionals, trial technicians – all need to perform essential work as directed by counsel and the law department. These discrete services are efficiently engaged through a centralized provider, streamlining the search and vetting for specialists, coordinating work, scheduling, and payments, and allowing outside counsel to focus on legal strategies.
The centralization and leveraging of discrete legal disciplines with a single point of contact economizes costs, communications, and timelines. A national arrangement simplifies the process of counsel’s requesting, tracking, and accessing court documents and records. A national contract offers not just a single point of contact, but a centralized online platform for standardized ordering with clear pricing and immediate accessibility for court reporting and record retrieval needs. This reduces the administrative burden and communication issues that may arise from dealing with multiple providers or with outside counsel management of third-party providers.
Because the discovery process in official proceedings requires corporations to entrust sensitive data to outside counsel, law firms and service providers utilizing discovery process data remain prime targets for cybercrime.
In fact, the 2022 ABA Cybersecurity Tech Report notes that 27% of law firms experienced a form of security breach. In the same way that small and medium size law firms often do not have in-house IT and security specialists to stay up to date with cyber security defense, the smaller or regional litigation support providers often fail to have the dedicated, proactive resources and internal controls necessary to mitigate threats. Hackers will look for the weakest link in the litigation process to obtain sensitive material, and extended parties are often just that less-than-secure link. Also, HIPPA compliance standards, incident responses, and disaster recovery plans are often beyond the smaller provider’s capabilities, and vetting the security of a smaller provider on a case-by-case basis, or by the managing law firm itself, is impractical.
Legal services will constantly evolve to meet market needs, including incorporating technology and processes that advance efficiencies, even if the risk-adverse mindset of attorneys delay rapid or wholesale adoption. But it is important to remember that for all the success law departments have had in incorporating business operations, upskilling capabilities, and leveraging inhouse work to lower legal spend, there’s still room for continued consolidation in the contracting and administration of litigation support services that had previously been relegated by them to outside counsel.