Legal Process Outsourcing - MCS Management Services

Legal Process Outsourcing Outsourcing Offers New Ways for Law Firms to Improve Efficiency & Profitability

September 2012

Growth of e-Discovery

• In 2006, the legal industry adopted into law the e-Discovery amendments to the Federal Rules of Civil Procedures.

• More than half of the 50 states have implemented rules for electronically stored information (ESI) and electronic data discovery.

• While legal administrators believe e-Discovery will improve efficiency and profitability, it has added complexity, as well as infrastructure and staffing costs.

Litigation Support Services • With adoption of e-Discovery, litigation support services have been stretched

beyond capacity even at the biggest law firms.

• Some large firms are hiring chief knowledge officers to manage the non-IT portion of e-Discovery.1

• This is not an option for small and midsize firms, forcing them to find alternative

means for conquering e-Discovery challenges.

Enter Legal Process Outsourcing

Rise of Legal Outsourcing • The practice of legal process outsourcing (LPO) appeared around 1997.

• By 2010, it was estimated that less than 15% of law firms had outsourced

any activities.

• A survey of corporate counsels reported that the overwhelming majority had not used legal process outsourcing but were either researching or starting to use it for the first time in 2011 or 2012.2

• However, corporate legal departments comprise the lion’s share of the LPO market, which was estimated at US$857 million in 2011.

• The explosive growth of e-Discovery is making it impossible for the legal industry to keep up without outsourcing.

• Several factors make outsourcing litigation support services good business: • Laws concerning outsourced work in the legal industry have been clarified. • The federal cost-recovery statute was amended.

• Outsourcing no longer means offshoring. Onsite, non-employee staffing

gives law firms outstanding control over the work.

• It is cost effective.

Legal Outsourcing Today

• In its formal opinion 08-451, the American Bar Association approved the use of outsourced legal and ancillary services to support a core legal team.3

• That same year, an amendment to the federal cost-recovery statute changed the

wording of 28 U.S.C. §1920(4) to include practically all copying of any relevant materials, not just paper duplication.

• These decisions opened the door for lawyers to increase the use of e-Discovery and other technology-based processes. • This has increased the workload for technology specialists in practice support and drive more firms toward outsourcing to keep up.

(C) MCS Management Services 6

• The legal process outsourcing industry has changed significantly since it began. • Outsourcing doesn’t mean the same thing as offshoring.

• Outsourcing doesn’t mean that services are provided offsite.

• The trend is to provide onsite, non-employee staffing. This is not the same

has hiring a temp.


Value of Outsourcing • Bringing outsourced litigation support in-house is typically a long-term (one year

or more) arrangement.

• It allows a law firm to benefit from highly skilled technical specialists without adding headcount or making a large investment in training.

• This contains backend costs such as health insurance and other benefits, while allowing the firm to keep up with growing demand.

• It gives leadership close control over technology staff, which is often the underlying reason that outsourcing is discounted.


• Onsite staff can be monitored every day.

• LPO providers stress a systematic approach and cost reduction.

• LPO providers rely on industrial disciplines that include: • Process improvement and metrics • Service level agreements • Formal governance plans • Lower cost of labor • Defined accuracy rates and progress reports4

• This is typically more oversight and process structure than most firms provide their own employees.


• Outsourcing litigation support makes financial sense for midsize firms and corporate counsels because:

• Lawyers are able to focus on more high-value tasks. • Studies have shown highly-skilled, highly-paid employees underutilize their

qualifications/experience when saddled with low-value tasks that are below their pay grade just because there’s no one else to do them.5

• This is often the result of austerity measures that

include cutting litigation support staff.

Financial Sense


• The legal industry is grappling with many issues that are changing their operations and, in some cases, eroding their profitability.

• There is more pressure than ever to grow profits today.

• Emergent technologies and broadening applications for e-discovery are putting pressure on managing partners to adopt or fall behind.

• By outsourcing litigation support services, law firms and corporate counsels can gain control over their technology burned, empower their lawyers to focus on law and effectively maintain their margins.

Conclusion


References

1. Raths, D. KM innovators lead change in the legal field. KM World. February 2012.

2. ALI Report. Corporate Counsel: Agenda 2012. As reported in Law Technology News, February 2012.

3. Jacoby, CJ. ABA Outsourcing Opinion: What it Means to You as a Litigation Support Professional. Litigation Support Today. February 2, 2009.

4. Friedman, R. The Impact of Legal Process Outsourcing (LPO) You Might Not Have Noticed.” Law Practice Today. January 2012.

5. The LPO Program. 3rd Floor, 85 Broadway, New York 10006.

Company Background

MCS Management Services is a leading provider of on-site business support services, including

mail center operations, shipping and receiving, records management, document and print center

management, in-house litigation support, managed print services and related professional services.

Over 30 Years of Business Support Experience

Women-Owned Business Enterprise (WBENC)

96% Client Retention Rate since 1993

Senior management team of experts has an average tenure of over 15 years