Legal Outsourcing (LPO)

    Groundbreaking Ceremony Heralds New, Larger Integreon Facility in Fargo

    Penny Retzer (me) speaking at the groundbreaking ceremony in Fargo, April 14, 2014.

    Penny Retzer (me) speaking at the groundbreaking ceremony in Fargo, April 14, 2014.

    It’s an exciting time to be with Integreon. Business is booming and the company is expanding from all corners of the world to meet growing client demand for our award-winning legal, document, research and business outsourcing solutions.

    Location of the future Integreon facility at 3247 47 St. S. Opening November 2014.

    Location of the future Integreon facility at 3247 47 St. S. Opening November 2014.

    What started in 1998 with a handful of Associates supporting an investment banking client – with business services delivered from what was then a very humble office in New York – has today become a global organization with more than 2,000 Associates spanning five continents and 12 delivery centers, serving many of the world’s leading law firms, corporate law departments, financial
    Integreon breaking ground at its new location in Fargo.

    Integreon breaking ground at its new location in Fargo.

    institutions and professional services firms.

    As we’ve grown over the years, we’ve also expanded our operations to ensure we continue to support our clients with the highest quality services. This includes recently moving to new facilities in New York City and Noida, India, and opening an additional facility in Manila, Philippines. This week, we led the groundbreaking ceremony for yet another new facility, a building under construction in Fargo, North Dakota. We’ve out-grown our two existing Fargo buildings, so the plan is to open a larger one in November 2014. The new spacerfacility will enable us to consolidate operations into a single building, with room to spacergrow even more.

    Our Fargo Heritage

    We’ve been in Fargo for more than 13 years, and our growing presence has been one of the area’s best-kept secrets. The roots of our operation began in 2001, with University of North Dakota grad Peter Pantaleo. Peter, who was with a law firm in Washington, D.C. at the time, saw a need for specialized support services for law firms. He set out to start a business and was attracted to North Dakota because of its skilled workforce and the support offered to him by the Greater Fargo Moorhead Economic Development Corporation.

    Born as CBF Group in 2000, the business began operating with just two Associates. It was acquired in 2007 by Integreon, and now the team in Fargo has grown to more than 300 Associates. Along the way, we’ve expanded from our original 5,000 square feet of offices, to the 26,500 square feet we have today across two buildings. By the end of this year we’ll have 34,000 square feet in one new facility. This move further emphasizes Integreon’s commitment as a company to provide clients with a variety of 24/7 services from the US and abroad. Our ability to service customers from these different locations allows all locations to thrive, and gives our customers the choices they need for their own demanding businesses and clients.

    A Positive Impact to the Fargo Community

    Although I’ve described us as Fargo’s best-kept secret, we’ve made a strong impact on the lives of many of the people who live here. We’re a primary service sector business, which means that substantially all of our revenue is earned from outside of Fargo. And, as our business has steadily grown, we are almost always on the lookout for new hires. In fact, we anticipate 30 additional hires through the end of this year alone! In addition, we contribute regularly to our community through Integreon’s corporate social responsibility program. Not only do we take pride in how we add value to our clients, but we also strive to make a difference in the locales where our Associates work and live. It is an important part of our company DNA, and we encourage our Associates to live it every day.

    Our Award-Winning Fargo Team

    When it comes to business, the Integreon team in Fargo provides 24/7 service and support to more than 100 of the 250+ clients Integreon serves around the world. Services delivered from our Fargo facility include document processing; presentation services; marketing support; transcription; proofreading; workflow coordination; HR, administrative and secretarial support; legal document review and contract management. The team also collaborates almost daily with other Integreon colleagues around the world, including those in Mumbai, India; Manila, Philippines; Arlington, Virginia; and London and Bristol in the United Kingdom.

    An example of this collaboration is our contract management and review support for Microsoft Corporation. The Fargo team works closely with our colleagues in Bristol, who have considerable foreign language expertise, to support Microsoft’s 20,000 contracts per year in 14 languages across 125 countries. The quality of our work for Microsoft was recently recognized by the International Association for Contract and Commercial Management (IACCM), which presented Integreon with their 2013 Innovation Award for our delivery of “outstanding” service and support. A detailed case study of this program is available here. As a key delivery center for this work, I could not be more proud of my Fargo teammates for this great accomplishment!

    Our Microsoft account is only one example of the great work we do in Fargo. We strive to always provide exceptional service to every one of our clients, whether they are a small regional law firm or multi-national corporation. Other case study examples of Integreon’s work, and not just that of the Fargo team, can be found here.

    Watch the TV News Coverage

    Our groundbreaking ceremony earlier this week received some great TV news coverage across all of the local Fargo broadcast networks. Some of the reports I found online follow:

    Looking Ahead

    Fargo is an important location for our global company. We’ve had great success in growing our skilled workforce here and in serving our clients from this facility, which is why we’re continuing to invest here. The modern design and employee-friendly environment of our new facility will represent the Integreon brand, value and excellence that Integreon has built throughout the years. As I stood at our new site on Monday and as I look at the plan for our impressive new building, I am amazed at how far we have come, both in Fargo and as a global company. We look forward to the continuing success and growth of our business and to making a difference in Fargo and all the other local communities where we operate.

    Penny Retzer is the general manager of Integreon’s Fargo facility. She also serves as the global head of document services at Integreon.


    For a brief overview of Integreon and our global operations and business, watch our new video. My thanks to the Integreon marketing team for putting this together.

    Law Students, LPO and Embracing Change – an Insider Perspective

    Originally published in The Australian (Outsourcing is not a dirty word, July 26, 2013)

    Earlier this month, the Australian Law Students Association (ALSA) published its Position Statement on Legal Process Outsourcing (LPO) in Australia. This Statement raised some concerns about the proliferation of LPO and the impact on law students. I would like to give an ‘insider’ perspective on this.

    To begin with, LPO is not the catalyst for law firms changing their recruitment strategies. Since the Global Financial Crisis, irreversible change has occurred within the legal profession – there will be no return to the pre-crisis status quo that facilitated year-on-year increases in law firm hourly billing rates, with no pushback from corporate clients. In short, clients are increasingly demanding better ‘value for money’ legal services. They are no longer willing to pay inflated junior associates hourly rates for routine, commoditised work that can be delivered at the same or higher quality by alternative legal services providers who specialise in it. As a result, Law firms are realising the barriers to growth under the traditional, leveraged pyramid model. Whether through LPO,  alternative business structures, automation and technology advancements, and/or other alternative legal service delivery models, such as those providing lawyers ‘on demand’, law firms are responding to change. To date, this change has been apparent to a larger extent in the US and the UK. Now, Australia is traversing this evolutionary path.

    How should law students respond to this change? Speaking as an Australian-qualified lawyer now employed by an LPO provider, I am a prototype for a new, alternate career path in the legal sector. Through this experience, I have gained on-the-job project management and business development skills that complement my technical and academic expertise. These skills can and should be identified and developed early in every young lawyer’s career. Academic institutions have a critical role in preparing law students for the real world of today’s legal practice. They should be arming their students with knowledge relating to different ways of working and/or alternate career paths within the legal sector. In this new world, LPOs are one of many new potential employers of tomorrow’s lawyers. In my opinion, driving change through the academic institutions should be the real focus of ALSA.

    ALSA also references the apparent ‘threat to security and confidentiality’ associated with LPO. This is a common misconception, often held by those new to the LPO industry. LPO providers place paramount importance on the security and confidentiality of client information. The leading LPO providers have physical and data security policies and procedures in place that far exceed those implemented by many law firms.  For instance, my employer, Integreon, has three levels of security: physical security at all offshore premises (access restricted via swipe cards); a strict data security policy for staff (no access to phones or internet at work); and legally binding contracts with all staff prohibiting the disclosure of confidential information. In addition, leading Australia organisations, including King & Wood Mallesons, Telstra and Rio Tinto conducted extensive due diligence into their chosen LPO providers, before their appointments. These appointments would not be in place if security was in issue.

    It is also a sweeping generalisation to assume LPO decreases quality. As, arguably, some law firms do not produce the same quality of output as others, the same may also hold true for LPO providers. However, in Australia, as we have seen around the world, law firms looking to engage LPO providers are extremely risk-averse and take a highly cautious approach to ensuring their appointed LPO provider meets a high threshold in relation to quality as well as security. A lesser-known fact is the stringent quality regimes LPO providers apply. Service Level Agreements (SLAs) are commonplace.

    LPO is not only about labour arbitrage; it is also about achieving continual process improvement and efficiencies, while producing defensible legal output. In this regard, the legal market is astute to the limitations of LPO for highly technical legal work, which I agree should remain the exclusive domain of law firm experts. Less technical legal outputs however, for example document review, can often be undertaken at the same or higher quality level output by an LPO provider.

    ALSA also raises the issue of the financial stability of LPO providers. This is not something endemic to the LPO industry. The fact LPO providers have, over recent years, been highly desirable targets for acquisition suggests the opposite. However if one is going to make the point that in partnering with an LPO company that this somehow increases the firm’s financial exposure, surely, to be balanced, one must acknowledge that it also provides financial security by turning certain labour costs from fixed to variable.  As law firms struggle with often spikey demand for services in an increasingly competitive environment, having the ability to call on LPO resources as a variable cost transfers the risk of under-utilisation from their shoulders to those of the LPO provider. This reduces risks for firms, enabling them to switch the tap on and off when required.

    I encourage ALSA to take the opportunity to delve deeper into the issue of LPO in Australia and consider the shape of the legal industry over the next 5-10 years. In my opinion, LPO and the variety of other alternative legal services providers operating in today’s legal market represent a tremendous opportunity for tomorrow’s young lawyers.

    Will Legal Process Outsourcers Acquire Law Firms?

    Although LPO might not these days be the darling of the press, I remain as bullish, in fact more so than ever about its prospects. The LPO industry has matured and transformed itself over the last 7-8 years, but that journey, that evolution has in reality only just begun.  In a recent interview with Managing Partner magazine I discussed the implications of the introduction of the Legal Services Act (LSA) on the LPO industry. The LSA permits external investment in and ownership of UK law firms. Click here to read the full interview.

    In short, I believe that the continued deregulation of the legal profession, following the LSA will act as a catalyst, propelling LPO into new areas of legal practice and even more innovative, groundbreaking delivery models.  While industry commentators appear fixated on the number of law firms applying for Alternative Business Structure (ABS) status, there has been little discussion to date about the interrelationship between ABSs, law firms and LPO providers in this rapidly changing legal landscape. How will the changes brought about by the LSA transform the LPO marketplace? As law firms examine their own operating models, LPO providers continue to grow, and ABSs become a commonplace fixture within the legal profession, questions arise over who competes with whom, and for what? Should traditional law firms view these changes as a threat or an opportunity?

    I was asked in the Managing Partner interview, as I often am, whether LPOs will apply to become ABSs or if they will seek to buy or invest in law firms? While I do not suggest that in the short-term LPOs will look to acquire law firms still constrained under the antiquated pyramid operating structure, it is entirely conceivable that some might go down this path in the future.  I can certainly envisage law firms hiving off their volume practice areas to LPO providers looking to expand into the high-volume consumer legal market. In the medium to longer term, as I mention in my interview…..anything goes!

    Read Full Article from Managing Partner (PDF)

    Bullish as Ever about LPO

    Four years ago hardly a day passed without at least one Google alert appearing in my inbox for an article extolling the benefits of LPO and predicting this nascent industry’s transformative impact on the legal profession. Today, I’m more likely to receive a notification of an upcoming London Philharmonic Orchestra performance than a positive news report on Legal Process Outsourcing.

    What’s more, over the last six months much of what I’ve read in the legal press has been prophesying the demise of LPO, referencing survey results that appear to show law firms overwhelmingly now engaging in captive operations. This despite a number of innovative law firms publicly announcing partnerships with LPO providers. When those surveyed come from within private practice, asking them whether their clients prefer captive law firm operations or third party LPO providers is a bit like asking the turkey to objectively cast a vote for the Christmas feast.

    So if we are to believe the legal press, then is it now time to pack up my LPO bags and move back into private practice, or are these reports of the death of LPO, as Twain might put it, greatly exaggerated?

    Although LPO might not these days be the darling of the press, perhaps predictably I remain as bullish, in fact more so than ever about its prospects. The LPO industry has matured and transformed itself over the last 7 years, but that journey, that evolution has in reality still only just begun. Let’s set aside for a moment the steady revenue and headcount growth across the LPO industry (albeit not as spectacular as some early forecasters predicted). Instead let’s look at the growth in law firm captives and the pace of technological innovation which some perceive as a threat to the very existence of LPOs.

    Law Firm Captives vs. LPO

    It is in my opinion an overly simplistic sound bite for the legal press to portend trouble in the LPO waters due to the increased prevalence of law firm captive operations. The very presence of these captives is good news for the legal market generally, and shows that law firms now understand the need to respond to corporate pressure for (1) a suite of options in providing support to their clients, (2) lower cost and innovative pricing models, and (3) process improvements. I view these moves as an explicit endorsement of the LPO approach. It is the LPO (not the law firm) mantra of unbundling legal services that is fast becoming the norm rather than the exception. Innovative law firms are following in our footsteps. Once unbundled, more work will move to lawyers in lower cost locations. Whether these lawyers work for a law firm, law department, or LPO provider, the point is that an increased percentage of the global legal services spend will be funneled in this direction.

    Here it is important to note that neither LPO providers nor law firms can individually deliver the holistic, end-to-end services corporate clients are now demanding. While some within private practice argue that those law firms with captive LPO units can do so, I disagree. Law firms with captives only go so far. Running a captive center, especially offshore, requires a scale that only the largest law firms possess. In addition, LPO typically offers several other advantages over a captive. These include better capacity utilization by aggregating demand across many clients; conversion of fixed to variable costs; ongoing investments in technology and continuous improvement; expertise in delivering performance with service level agreements (SLAs) and metrics; and of course business continuity assurance with multiple delivery locations.

    Let’s focus on that last differentiator for a moment. Global Delivery Platforms (including onshore AND offshore) are quickly becoming a prerequisite for in-house counsel demanding 24/7, “follow the sun” multi-lingual support. While a near-shore or onshore law firm captive is demonstrative of BigLaw’s belated recognition that an alternative legal services delivery model is indeed required, it is hardly an end game for those LPO providers offering a true global delivery capability.

    A common misconception held by proponents of captives is that working with a third party LPO provider means loss of control. In my view, control is more about governance than ownership. For example, some captives are “out of control” because they have not been properly set up with SLAs and rigorous metrics. Conversely, a proper SLA and governance structure can in fact give the law firm more control over a third party LPO provider than they might typically have over their own staff.

    Technology: Disruptive or Harmonious for LPO?

    It is indisputable that developments in technology assisted document review, automated contract meta-data abstraction, and document assembly technologies are speeding up or significantly reducing the necessity for manual labor. Some might argue that this technological innovation represents a challenge to LPO. Again, I disagree. LPO is no longer a pure labor arbitrage play, and frankly hasn’t been for several years. A more accurate description of LPO would be that of an operating model built upon a best practices framework, with process efficiency, quality control and enabling technology at its core.

    Yes it’s true – the days are quickly fading in which huge teams of attorney reviewers tackle hundreds of thousands – or millions – of seemingly unfiltered documents. My colleague and Global Head of Document Review at Integreon, Julie Hanna succinctly states in her article, What Does Predictive Coding Mean for Managed Document Review, that, “the rationale for the dour predictions about the role of human review seems predicated on an extreme hypothesis that pits computers against humans with little consideration for practical realities.” Although LPOs have emerged over a relatively short period of time to grab a significant piece of the document review pie, it is still, to this day, the standard modus operandi of many corporate legal departments to rely on their outside counsel for support. Integreon and other leading LPO providers are constantly developing, testing, and refining innovative technology assisted review (TAR) workflows to lead to smarter review processes. Many years from now, when we look back at the development of e-discovery and document review, the AmLaw 200’s traditional “associates in the basement” approach will be one long consigned to the history books with future industry commentators reminiscing with incredulity, asking themselves, “Did we ever really handle e-discovery and document review this way?” So who will in-house counsel increasingly turn to for support? As clear as night follows day, it will be the LPOs.

    Technology is an incredible enabler. I cannot stress that enough, and those that embrace technology as integral to their offering will succeed. At Integreon the first port of call for any engagement involving the review of a large volume of contracts (often triggered by the implementation of a contract lifecycle management system, or post acquisition, or as a response to an audit) is to determine whether automated meta-data abstraction and field population technology can speed the process and reduce the costs associated with a purely manual review.

    So why is it then that the tone of the conversation has changed? Well clearly some within private practice tend to view LPO as an encroachment upon their turf. They like the way things used to be and endeavor to translate the current trends into the language of yesterday. Perhaps this is nothing more than an acknowledgment that what the naysayers thought was a passing fad, is clearly here to stay. As the proverbial “they” are wont to say, “if you can’t beat them, join them.”

    I believe and always have believed that innovative law firms that truly embrace LPO as an opportunity to differentiate their firm will actually enhance their own brand and gain market share as a direct result. The reason that I remain more optimistic than ever about LPO is that I look back over the relatively short lifespan of this industry and I’m remarkably proud of how far we’ve come and all the change we’ve driven across the legal profession. From an industry that was characterized in its early years by numerous entrepreneurial startups, operating primarily out of India alone, LPO is now an integral part of the legal services delivery spectrum.

    It is entirely plausible that LPO providers might one day look to acquire major law firms in the UK now that external investment in law firms is permitted or, perhaps more immediate on the horizon is that the much vaunted law firm captive operations will increasingly be touted for sale to the most logical acquirers, the LPO providers.  As the rollercoaster of legal services innovation, after a sluggish start continues to pick up pace, not only will LPO providers be along for the ride, we’ll have front row seats.

    Corporate Update on Integreon from the Desk of CEO Bob Gogel

    By Bob Gogel

    It has been nearly two years since I joined Integreon as Chief Executive Officer and during that time we have implemented a significant, positive transformation in the Company, with a focus on continuously improving how to better serve and delight our clients.

    It gives me great pleasure to let you know that we, at Integreon, pride ourselves on consistently providing you with the high quality, reliable and cost-effective solutions you have come to expect from us:

    • Our services in the areas of e-discovery and litigation support, document review and legal process outsourcing (LPO) are used by law firms and corporate legal departments every day so that they can better serve their own demanding clients.
    • Our portfolio of research and analytical services is comprehensive and proven and we offer clients a unique spectrum of services. Our insightful approach to research, business information and financial analysis generates remarkable results for our corporate, financial services and consulting firm clients.
    • Our document services business unit works hand-in-hand with law firms and corporations to improve their document processing, administrative and desktop publishing operations. We enable our clients to make strategic, business-minded improvements while offering service gains from any of our global 24×7 delivery centers.
    • Our business services offerings are aimed at removing the costs and distractions of non-core activities for professional services firms and corporations. Integreon continues to provide a full suite of business services to our clients; procurement management, knowledge management, finance and accounting, shared library, IT services, human resources, marketing and business development.

    Integreon continues to grow, and I’m really excited about our prospects as a leading provider of value added services to our clients. The following will give you a sense of who we are.

    Continue reading…

    Conversations from LegalTech 2013

    Going to LegalTech, for me, is like going to a high school reunion. This year was my 13th LegalTech (East Coast) and I think it has to be my favorite conference of the year – although there is one coming up in Zurich regarding data privacy that by mere locale could trump LT. It is the one time of year that I am guaranteed to see every person I have ever worked with in the last 16 years. 13 years of booths, sessions, parties – they’ve all kind of blended together over the years – so that I can’t really distinguish one LegalTech from another.

    What does stand out for me each year are the conversations I have with people – colleagues, clients, competitors, partners, and friends. The themes of these conversations set the tone for the coming year.

    Past years’ themes have been:  Online Repositories – wouldn’t it be great if there were case folders and batch printing available on the Internet?; Production Management – how do we solve this problem of having to deliver the same docs to multiple parties and can we deliver docs in some other form than paper?; Document Review – is there a cheaper way than using law firm attorneys?; Offshore and Onshore Outsourcing – should we do it and why India?; Litigation Readiness – what can we do to be prepared for discovery?; Early Case Assessment – how can we gain case insight earlier in the process?; Concept searching and intelligent batching – what are these things people are calling “concepts” and how do I use them?; And of course, Predictive coding.

    This year’s topics were both reassuring (because we’ve been working on solutions for them) and surprising (because perhaps naively I thought they’d been fully addressed in the past).

    In no particular order, here are the themes of the discussions I had this year:

    Project Management

    • Almost every client (law firms and corporations) that I spoke with mentioned the need for experienced, knowledgeable project managers. Since e-discovery is getting increasingly complicated to manage, having competent, consultative PMs, both internally and externally, is essential to their success. Now, this isn’t the first time I’ve heard this, and I’ve always believed it to be true, but looking at the complex workflows and the constant customization we tend to offer to our own clients at Integreon, it may be truer now than ever before. I’m reminded of the days of my first online Review engagements, when clients struggled with learning DT Search and navigating in a database, on top of having to read through tens of thousands of documents linearly. There was just so much to learn. I feel like we are there again today, in the ‘so much to learn’ phase and PMs really need to be able to effectively guide their clients along this increasingly complex path.
    • PM turnover was also a big topic this year because every e-discovery provider struggles with keeping their PMs happy. PMs today have really hard jobs – they have 18 hour / 7 day a week jobs full of difficult and complicated cases. Projects don’t stop because its after 8pm or on a Sunday afternoon – issues can and do come up at odd times. The PM’s job is essential, and yet still undervalued or unappreciated by some. The pressure to succeed and always be available can burn out a PM. At LT, what I heard is that every client fears this burn out above most other things that can go wrong on a case, second only to inadvertent production. Losing a PM who has gained trust, who can be relied on without tremendous QC, can be a serious blow to a client’s workload. I was told that the very idea of a trusted advisor leaving is one of the most depressing things that can happen during a case. We, as employers in an industry where great PMs are essential, need to make it a priority to help our PMs learn, grow and balance their workloads to avoid burn out. It is also incumbent upon us to create a clear career path for growth and professional development.

    In-house Technology Centers

    • One of the themes I heard from both law firms and corporations alike is that they are evaluating what they will do next with technology. Six or seven years ago decisions were made to bring technology in-house in order to drive down the cost of processing and hosting. Seven years later the technology (infrastructure) is old and they are struggling with the question of what to do next. Options I heard were:
      • Upgrade to new software/hardware
      • Find a managed service arrangement where they have bulk all-you-can-eat deals in place or preferred pricing deals with high volume capacity
      • Source work on a project basis with service providers, like they were doing before their investment in technology
    • Many clients were saying they won’t be able to justify investing in new technology when the last seven years have shown that they cannot recoup their costs from previous investments. It will be interesting to see which route people decide to take.

    Data Reduction Strategies

    • I also had several conversations regarding the volume of projects crossing my clients’ desks and the ever increasing volumes of data involved in each one. Many corporate clients, and their outside counsel, are struggling with ways to drastically reduce data and document sizes in collections, processing, hosting and review. Not only are the costs associated with discovery in large-scale projects so high as to elicit audible gasps at budget review time, corporate clients also struggle with multiple, simultaneous projects where aggregate costs are eliciting even greater gasps.
    • We have recently analyzed our past processing cases and seen that we have been successfully reducing raw data, on average, by 90% or higher. Gone are the days of 70% reduction – it just isn’t a viable option anymore. And this steady reduction has been achieved through standard deduping, search terms and date filters alone. We get much higher results (95% or higher) when we add in data analytics prior to review – removing file types, refining terms to avoid garbage, identifying highly non-Responsive custodians early through term reporting and other measures. Making even a small effort at the start of a case to understand the data and strategize on reduction techniques can reduce data sizes and dramatically bring down costs.

    Predictive Coding – this is the year!

    • The collective feeling is that this is the year that predictive coding will stop being a hot topic and start being a hot practice. The choice this year will be not ‘should I employ a predictive coding workflow’, but rather ‘when should I employ it and which technology and workflow best suits my needs?’. People seem optimistic on this point, almost euphoric, especially the providers of predictive coding workflows. We, the preferred partners of the world, have long been proselytizers of Technology Assisted Review (TAR) workflows that heavily rely on human leadership, but this year we will turn into experienced project managers and consultants; we will lead a new generation of review attorneys into the bright realm of intelligent solutions; we will provide exciting and valuable workflows contingent on embedded use of mathematical algorithms and statistics; we will, we will, we will!
    • Law firm and corporate clients alike were also insistent that this is the year they will start using these workflows. The fact that judges are now getting involved in the decision making process is leading to a fear potentially even greater than that of not looking at every document. The idea that one may be involved in a matter where the judge mandates use of these workflows could prompt firms/clients to get some prior experience under their belts and test out different methodologies so that they can advocate for the ones they like best, rather than being the less experienced player who has to go along with decisions they do not quite understand.

    These are all the themes I think will prevail for Integreon this year. I believe we will see the need for more investment in advanced PM training and more PMs added to our team overall, more clients who previously invested in technology turning again to outsourced solutions, higher focus on data reduction strategies and data analysis prior to review, and increased use of, not just interest in, Predictive coding workflows.

    2013 should prove to be a milestone year for the fast evolving field of e-discovery!

    Disclosure Costs – Can Legal Process Outsourcing (LPO) Be the Hero of the Big Bang?

    With the implementation of the UK’s Jackson Reforms in April 2013, litigants will be faced, among other things, with the spectre of unparalleled scrutiny by the courts on the costs of disclosure. The upcoming Civil Procedure Rule 31.5 and existing e-Disclosure Practice Direction 31B are the key provisions. As Lord Justice Rupert Jackson pointed out, they “fit neatly together” to give the court more power to supervise and control the disclosure process to ensure it meets the overriding objective of a proportionate and cost-effective disclosure.

    Under the new rules, the courts are empowered to select from a menu of potential disclosure orders.  They will give directions at the first case management conference that will focus disclosure on the real issues between the parties.  It will be more important than ever before to demonstrate that a proportionate and cost-effective disclosure strategy has been put in place.

    Under new CPR rule 44.4(5), costs incurred are proportionate if they bear a reasonable relationship to:

    1. the sums in issue in the proceedings;
    2. the value of any non-monetary relief in issue in the proceedings;
    3. the complexity of the litigation;
    4. any additional work generated by the conduct of the paying party; and
    5. any wider factors involved in the proceedings, such as reputation or public importance.

    Further, parties will now need to present an estimate of disclosure costs prior to commencing proceedings.  Ultimately, it is the parties’ lawyers who bear the burden of ensuring costs are proportionate and reasonable, and that the case is properly managed to meet the budget. Effective case management will be critical to adhering to the case strategy and keeping within the budget, as parties may not recuperate costs that have not been reasonably or proportionately incurred.

    Neil Mirchandani, a partner in Hogan Lovells’ Financial Services Litigation Group, states that, “We have saved clients millions of pounds by outsourcing first level review where appropriate, including outsourcing to India with Integreon. It is undoubtedly one of the main options available to help reduce the costs of linear document review.”

    While leveraging advanced e-Disclosure technology tools will play an increasingly important role during the litigation process, there will be little opportunity to escape from a degree of manual document review. Automation can help to facilitate workflow, particularly for larger size data volumes, but there is still no such thing as a fully automated review.

    With the cost savings associated with outsourcing manual review, the question arises whether, save in extenuating circumstances, a budget for the entire review to be run internally by the law firm will pass muster with the courts. Will the courts make outsourced managed review an imperative, more than just an opportunity to leverage cost-effective, experienced resources?

    LPO solutions including managed document review are provided under a model that by its very nature minimises risk (through extensive documentation, governance, performance metrics, key performance indicators and service level agreements). Routine work is delivered by individuals who specialise in these activities.

    Assuming a top tier LPO provider has been selected, the document review will be significantly more cost-competitive and also comparable (dare I say, better?) in terms of productivity and quality.

    Vince Neicho, Head of Litigation Support at Allen & Overy, notes that, “[A&O] continue to recognise legal process outsourcing solutions are an important part of our ‘Suite of Options’ available to our clients. In addition to review on regulatory matters, this option is especially important in litigation, where we work with Integreon, as the efficiency of the disclosure process is a top priority of the court’s cost management agenda.”

    By using a credible and experienced LPO provider like Integreon, litigants and their lawyers will benefit from:

    • Cost certainty and predictability through per document / per project pricing.
    • Choice of global delivery locations, including onshore delivery from the UK (particularly London), and allowing for a multi-shore “follow the sun” approach for around-the-clock progress.
    • A more efficient review as deep domain expertise will ensure that the best strategy, expertise and technology are employed for each project.
    • Consistent high quality results achieved through a highly structured document review process built to industry best standards, with added quality control.
    • Scale and resources to provide and manage centralised document review holistically across the entire universe of an organisation’s data or a data set common to several organisations by leveraging the work across multiple related matters (for example, banks investigated by the regulators over the manipulation of the London Inter-Bank Offered Rate (Libor) and leverage that work across multiple matters.  This avoids the re-examination of the same data set and ensures consistency across matters, which is critical for defensibility, and vastly improves efficiency and cost-savings.
    • Credibility from working with a provider that is recognised by prominent industry analysts like Gartner, ValueNotes, the Black Book of Outsourcing and Frost & Sullivan, among others.
    • Access to resources with foreign language skills.

    Pioneering firms, such as Allen & Overy above, Simmons & Simmons and Hogan Lovells (to name a few) identified the benefits early on, adopted LPO, and now watch as both economic reality and regulation drive what was previously thought of as an innovative option to quickly becoming the norm.  Perhaps the Big Bang (the Jackson Reforms) may not be the catalyst of change as it is commonly presumed, but rather a facilitator of change that is already well under way.

    LegalTech New York

    I will be speaking about the Jackson Reforms next week, including considerations from a US perspective, on Wednesday, January 30th from 3:45 to 4:45 PM Eastern Time at the LegalTech New York conference. Joining me will be Chris Dale (The e-Disclosure Information Project) and Steve Couling (kCura, an Integreon technology partner). Our moderator will be Integreon’s Juliet Hanna. The Jackson Reforms will be one of three topics covered during our Super Session at the conference.

    Shifting Momentum in Legal Profession Favors Innovation – Findings from FT Innovative Lawyers

    FT Innovative LawyersEven before the onset of the global financial crisis in 2008, corporations and their in-house legal departments were under considerable pressure to do more with less. The great recession exacerbated this pressure and accelerated the exploration of innovative legal services delivery models. Perhaps an overarching measure, common across many legal departments has been to wherever possible ensure appropriate alignment of limited internal resources to specific legal tasks, given the complexity of those tasks and the skillset required to complete them.

    For litigation and other matters, similar pressure has in turn been placed on outside counsel to deliver greater value for less cost. A growing number of law firms now emphasize their core competencies (i.e. advisory services) while finding innovative ways to more efficiently support non-core functions (i.e. electronic discovery or volume legal work such as document review).

    Now four years since the financial crisis first began, we’ve witnessed what can only be described as a veritable revolution in the sourcing and deployment of personnel and technology resources in the legal field. The profession has seen growing interest in and adoption of predictive coding, legal process outsourcing (LPO), more collaborative types of relationships between corporations and their outside partners, and various alternative ways of doing business or structuring fees. This seems to mark a momentous shift from only a couple years ago when much of the legal world still held reticence over the use of such novel approaches.

    It has never been clearer to me than at this present time that the business and practice of law is changing. More legal professionals than ever are embracing new ways of operating and delivering legal services to their clients, whether this be in-house legal serving their internal clients within their business or law firms serving their corporate clients.

    This trend has been nowhere more apparent than it was at this year’s annual FT Innovative Lawyers Awards. Events were held on both sides of the Atlantic, on October 4th in London and then on November 28th in New York. The judges for both events took a broader perspective on legal innovation than has been typical of featured themes from previous FT events (such as last year’s focus on Bold Thinking). Innovation now seems less “wild west” and more an expected part of doing business. (See Legal Process Outsourcing: has it reached a tipping point? for a look at how the trend applies to LPO.)

    FT Innovative Lawyers Awards Dinner in LondonSeveral of my Integreon colleagues and I attended the FT Innovative Lawyers awards dinners held in London and New York (we are the headline program sponsor). As each of the winners were introduced and accepted their awards, it occurred to me that despite the variety of innovations, a commonality was the goal of achieving high quality results as efficiently as possible for the work performed. This seemingly straight forward objective has spawned a multitude of new constructs for how organizations operate and deliver legal services. (See Contract Management – A New Collaborative Legal Services Delivery Model for an example.)

    During the FT awards research process, well over 500 submissions were assessed by the FT judges, including the results of a survey given to both the applicants and their client references. The survey results support the notion that current momentum in the legal profession now favors innovation.

    • Two thirds of respondents identified the delivery of greater value at less cost, improved efficiency or better fee arrangements as top demands being placed on corporate counsel today.
    • Three quarters of respondents reported that the volume of regulatory issues and government investigations has increased.
    • Three quarters of respondents indicated that during the past two years outside counsel have innovated to meet the needs of their corporate clients, most commonly by some form adaptation (such as changing behavior, culture, structure, products) or by instituting new fee arrangements or cost saving practices.
    • Two thirds of respondents indicated that legal process outsourcing would become more important over the next five years.

    For further insight into the trends, winners, and specific innovations highlighted in this year’s FT Innovative Lawyers program, I encourage you to read both of the following special reports published by the Financial Times:

    For questions about either of these reports or to learn how your organization can participate in our 2013 program, please contact Integreon at ftil.support@integreon.com.

    To wrap up, I want to thank all of the law firms, in-house legal teams, and individual lawyers who participated in this year’s FT program. I also want congratulate those who were recognized for their innovations in this year’s awards. As a leading global LPO provider, Integreon has long been at the forefront of legal innovation, as acknowledged by Chambers Global and in other respected publications in the field. For years we’ve worked with both law firms and corporations around the world to help them implement innovative practices in areas such as discovery and document review, contract management and review, and other types of work. This includes the application of technologies that can facilitate more efficient workflows and improved quality assurance. As I look to the year ahead, I believe we will continue to see even more lawyers applying fresh thinking to the business and practice of law.

    Contract Management – A New Collaborative Legal Services Delivery Model

    In this post Mark Ross, Integreon’s Vice President of LPO, and Carla Goldstein, Chief Strategic Innovations Officer at AmLaw 100 firm Seyfarth Shaw, provide an account of how an initial meeting between their organisations led to the birth of a collaborative law firm/LPO contract management legal services delivery model.

    Republished with permission from The Global Legal Post’s LPO Handbook 2012/2013.

    A Great First Date

    Earlier this year, on a blustery Chicago morning, an executive team from global legal process outsourcer Integreon arrived at the offices of AmLaw 100 firm Seyfarth Shaw. Integreon had recently made the strategic decision to sponsor the Financial Times Innovative Lawyers awards to show their support for those firms who listened to the issues and challenges of their clients and decided to break the mould and change the way they work.  Seyfarth, long acknowledged as a poster child of law firm innovation for creating SeyfarthLean, an adaptation of Lean Six Sigma for the legal industry and embracing it across their practice groups, had been recognized by the FT as one of the top 10 most innovative law firms in the U.S. The Integreon team had been eagerly anticipating this meeting in the hope that the FT’s endorsement rang true.

    From both sides of the table there was an immediate meeting of minds around the notion that the legal profession was changing and would never return to the old status quo.  The LPO executives listened intently to Lisa Damon, National Chair of Seyfarth’s 350 Attorney, Labor & Employment Practice Group and member of the firm’s executive committee, while she described what the firm’s leadership defined as a perfect storm galvanising change in the legal profession.

    “Unrelenting cost pressure, disaggregation, commoditization, globalization, and technological advances are forcing firms to reevaluate their business models and implement innovative solutions in order to deliver cost-effective, high-quality legal services to their clients. We believe that first-movers who embrace change will be better able to meet the demands of their clients, and gain a competitive advantage,” said Damon.

    This article, co-authored by Mark Ross, Integreon’s Vice President of LPO and Carla Goldstein, Seyfarth’s Chief Strategic Innovations Officer, is an account of just one output from that initial meeting – the birth of a collaborative law firm/LPO contract management legal services delivery model.

    The Contracts Problem – As is.

    At the core of today’s business-to-business landscape, contracts effectively define the rules of the road.  The typical Fortune 500 or FTSE 100 Corporation maintains tens of thousands of active contracts while operating under the domain of burgeoning regulatory compliance. Concurrently, the in-house legal department budgets are under ever-increasing scrutiny with the mandate to General Counsel being simply to do “more with less.”

    General Counsels are hesitant to spend already constrained Outside Counsel budgets on the high volume, and what is perceived as lower risk, contracting process. The internal organisations demanding contracts support (sales, procurement, and supply chain) are less interested in the reliability of the outcome, in terms of compliance and risk tolerance, than the speed of getting a deal done. However, despite the apparent disconnect between the legal department’s priority outcome of minimising risk and those of the internal business units, in today’s market outside counsel is typically only used on the largest, most valuable contracts. On the occasions when outside counsel is engaged to support high volume contracts, the legal review process is far from efficient with outside counsel allocating inappropriate resources, given the complexity of the task at hand.

    The current staffing model for contract generation, negotiation and management for many corporations is still predicated on a method that is both labour-intensive and cost prohibitive through utilisation of expensive in-house legally trained resources. In the last 20 years, internal departments have also started hiring their own lawyers and paralegals to supplement the support or perceived lack thereof from the legal department. Whether sitting within a legal department team or in an internal department’s quasi-legal team, many lawyers are simply over-priced to be performing the review and ongoing management of the company’s high volume, lower complexity contracts.

    As far as workflow and technology are concerned, the situation is little better.  The usual modus operandi involves a contract requester sending an email or perhaps completing a template and emailing it to those individuals he or she believes are appropriate to do the work. Without a formalised process, relationships can come into play, with email requests for legal review sent to the individual whom the requester “likes dealing with.” Often these emails may be missing necessary information or may fail to contain relevant attachments. In-house lawyers then red-line and negotiate the terms via email. These lawyers are responsible for handling the entire document workflow through email, with little or no capability to track the status of each transaction. Contracts are finally signed in hard copy, then scanned and attached to shared drives, although frequently the legal department has a lack of visibility into whether or not a contract has been formally executed and if so, where it is stored.

    Often there are no formalised processes, standard templates and accepted language or back-up provisions for routine contracts or guidelines for turnaround times involving these contracts.  Even companies with defined service-level agreements (SLAs) in place frequently don’t have the mechanisms to enforce them nor the incentives in place to make them work. Over-allocated in-house lawyers are unable to meet the expected SLAs, and this creates a conflict between the business client and the legal department. While the work product is up to the business client’s expectations, the client remains dissatisfied with the timeframe for delivery.  At best this approach can be described as an antiquated model of resource allocation that leverages technology not designed for the task at hand. At worst, it reflects an inappropriate allocation of resources and no formalised processes or management of the ongoing rights and obligations under the applicable contract. The outcome is a costly and inefficient use of internal resources, with the company’s risk tolerances failing to be adequately captured in the final contractual documentation.

    Two Heads are Better than One – the Joint Solution

    Owing directly to the processes presently in place within most in-house legal departments contracts generate overwhelming amounts of administrative burden on the in-house lawyers and their support staff. Because law firms have not historically focused on efficiency, appropriate resource allocation and continuous improvement, they are often not suited to handle the review and effective management of a large portfolio of the more standardised contracts with cost efficacy. Fortunately this is not the case with Seyfarth.  The firm has long recognised that the disconnect between a legal department and the internal business units, coupled with inefficiencies in processes, left substantial ‘white space’ for innovative law firms.  It was the SeyfarthLean way of thinking that facilitated the firm’s exploration of whether it could provide a corporate legal department with an end-to-end lifecycle of contract review and management services.  Seyfarth’s approach and over-arching culture demonstrated to Integreon that here was a law firm that not only talked the talk of innovation but also walked the walk.

    However, the inescapable fact remained that a significant proportion of the work involved in contract lifecycle management still ranged from administrative to routine in nature. In order for a law firm to capture some of this white space, its offering would need to be coupled with that of an appropriate legal provider partner.  For routine contract administration, creation, review and negotiations, that perfect partner is an LPO. The law firm’s expertise, coupled with the LPO’s engine room as a joint solution, becomes affordable and desirable for contracts from the least complex and low risk to the most complex and high risk. Both Seyfarth and Integreon were convinced that a combined solution would empower GCs to outsource a greater volume of contracts, and this would facilitate in-house lawyers to be better able to focus their time on more value-added work.

    Shortly after this first meeting, Integreon and Seyfarth began scoping out the broad parameters of the joint solution. The 30,000 foot premise would be the deployment of law firm lawyers for high level review and negotiations, teamed with LPO lawyers and paralegals for mid to lower level negotiation, review and administration. The combination of the legal expertise of a leading AmLaw 100 firm and a state-of-the-art contracts workflow tool, together with expertise in global legal services delivery, process-based development and transition from a leading LPO provider, would offer the corporate legal department a service that was far greater than the sum of its parts.  Aspects of contract review, red-lining and negotiation that could be process-driven, would be, with the legal services provided primarily by the LPO provider, out of either an offshore or onshore delivery centre.  Quality control (over and above that provided by the LPO), customised work, escalation and necessary strategic input would be delivered by the law firm.

    By bringing both an LPO and a law firm together there would also be a consensus in defining what is and is not suitable for either party. Seyfarth would triage the range of contracts flowing from an organisation in order to match the appropriate level of legal resource to the required level of review. Seyfarth’s workflow portal would systematise the agreed upon disaggregation and triage of the work to either Seyfarth or Integreon depending on the complexity and risk. Work could range from ‘pure LPO,’ delivered solely by the LPO, to more complex situations where a portion of the work, the quality assurance, or in some situations all of the work, would be performed by the law firm.

    Integreon and Seyfarth Joint Solution Workflow

    Click on image to ENLARGE.



    The Whole is Greater than the Sum of its Parts

    The benefits and value proposition of a joint solution were immediately apparent to Seyfarth and Integreon. By working together on a holistic contract lifecycle management offering, the partnership offered clients AmLaw 100 legal expertise coupled with an extensive LPO global delivery platform. Corporate legal departments would benefit from the win-win of leveraging an LPO’s lower cost onshore and offshore resources with the added assurance of quality control, supervision and ownership of the work product by a leading domestic law firm.

    Seyfarth and Integreon recognised that often a corporate client does engage an LPO directly, and in doing so makes a “risk versus reward” decision, considering the potentially smaller pot from which any damages awarded following a successful claim could be drawn. Under a combined law firm and LPO offering, when working under the supervision of a law firm, it would be the law firm that retained overall responsibility for the work product. The law firm, not the LPO provider, would be engaging in the practice of law while the LPO would be providing support services. Under the joint solution model, the work product would require minimal to no review from the corporate client who would also benefit from a much higher level of professional liability insurance coverage.

    One of the main drivers in creating an LPO relationship is to relieve the burden from in-house lawyers of the time demands of these high volume/low complex transactions.  Although many corporate legal departments start the outsourcing journey with the best of intentions, over time the internal legal department champions get pulled on to other pressing engagements and the level of involvement on the part of the client can and should wane. This diminishing degree of involvement however can prove detrimental to the longer-term success of the outsourcing relationship as the LPO will not be provided with a high level of touch and review by the corporate client. By working under the ongoing supervision of a leading law firm, which has its own vested interest in the ongoing success of the engagement, the polar opposite scenario will occur. Over time the LPO team will benefit from the added value of the law firm’s quality control and supervision so that they in turn are able to handle an increasing array of more complex tasks.

    The changing face of legal services delivery

    Across the spectrum of legal service providers there are a few genuine disruptive forces and agents of change driving the vision of a highly collaborative and streamlined approach to legal services delivery. Contrary to early concerns that LPOs would compete directly with law firms, it has become abundantly clear to Seyfarth and Integreon that the most effective model is a true symbiotic ecosystem in which law firms and LPO providers both play crucial roles. LPO providers do not “practice law” and are not true alternatives to law firms. Within this global legal ecosystem, in addition to practicing law, law firms provide critical oversight, supervision and, only if and when needed, bespoke, premium legal advice.

    Neither LPO providers nor law firms can individually deliver the holistic, end-to-end services corporate clients require. While one could argue that those law firms with captive LPO units can do so, it is in fact difficult for them to accomplish this as cost-effectively as required by their clients. Under a new collaborative model, however, law firms can work with LPO providers to expand their offerings and deliver a complete, end-to-end approach, providing the appropriate level of legal services required for a particular work product. Although Seyfarth is ahead of the curve, there are a growing number of law firms who are increasingly taking new solutions to clients in partnership with LPOs.

    Legal Process Outsourcing: A Viable Alternative or The Ethical Choice?

    The legal profession’s governing bodies can often find themselves the target of overly harsh criticism. Yet I have personally been pleasantly surprised by the ongoing endeavors of the ABA’s Ethics 20-20 Commission over the last couple of years. Their examination of and guidance on the ethical and regulatory impact on the profession from advancing technology and increasing globalization, including outsourcing, is both well researched and welcome.

    Recently there has been a fair amount of press surrounding Opinion No. 362 issued by the D.C. Bar.  The crux of the issue discussed in this opinion centers on whether e-discovery companies (in my world LPOs) step over the line and engage in the unauthorized practice of law (UPL). This Opinion and the Opinion of the District of Columbia Court of Appeals Committee on the Unauthorized Practice of Law do provide some useful, albeit not novel, guidance as to how to avoid UPL. However, one throwaway sentence in this opinion gives credence to those who level accusations at the profession’s governing bodies for being antiquated in their approach. If the starting point of any analysis is as described in the quote below, then I cannot help but feel frustrated. I quote directly from the opinion:

    “When such organizations operate in conformity with the ethical mandates discussed herein, they may present a viable alternative to traditional marketplace offerings.”

    To describe LPO as a viable alternative to traditional offerings is missing the point.  Many years from now, when we look back at the development of e-discovery and document review, the AmLaw 200’s traditional “associates in the basement” approach will be one long consigned to the history books with future industry commentators reminiscing with incredulity, “Did we ever really handle e-discovery and document review that way?” Unlike the “traditional” offerings, LPO is an operating model built on best practices, with process efficiency, quality control and technology at its core. LPO enables legal functions to be standardized and unbundled. LPO solutions including document review are provided under a model that by its very nature minimizes risk (through extensive documentation, governance, performance metrics, KPIs and SLAs). Routine work is delivered by individuals who specialize in these activities.

    Any credible LPO provider understands that work must be carried out under the supervision of in-house or outside counsel who must retain the overall responsibility for the work product. It is the law firm or in-house counsel and NOT the LPO provider that is engaging in the practice of law. We are providing support services, not legal advice.

    Let’s take this one step further. Rule 1.5 of the ABA’s Model Rules of Professional Conduct is clear that not only shall a lawyer not charge or collect an unreasonable fee, they shall not “make an agreement” for one. Given the requirement not to charge an unreasonable fee, is a US law firm under a duty at the very least to inform their clients of the LPO option for certain routine, commoditized legal tasks, such as document review? Working with the premise that LPO document review is significantly more cost-competitive and also comparable (dare I say it, better?) in terms of productivity and quality, then if one doesn’t inform a client of the LPO option, how does this sit with one’s ethical obligation not to charge or make an agreement for an “unreasonable fee?” Is it also reasonable to assume that billing anything approaching AmLaw 200 junior associate hourly rates for first pass document review could be deemed as “an unreasonable fee,” given “the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly?”

    I warmly encourage the professional bodies on both sides of the Atlantic to continue to study the impact of outsourcing, globalization and technology on the legal profession. However, it is crucial that those providing guidance do not commence their study from the starting point that, just because a given activity has historically been handled in a particular way, that this traditional approach is somehow a utopian standard of ethical practice to which others should aspire.

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