Legal associate vs. contract attorney

Most of the big companies that have a division that has some thing to do in legal outsourcing domain have begun with contract review and patent & contracts draft work. In the LPO domain these are the low hanging fruits. They are also not high margin activity. But it is easier to get in and grab a share of the pie. You can very well be a contract attorney with them.
But there are other specialized LPOs that are very quickly moving up the LPO value chain by taking up the ownership of document review. Document review, an essential part of ediscovery, is the biggest part of legal expenditure by corporates. Firms that were doing preliminary first level review and charging per document are now doing second level document review working on SLAs (service level agreements). LPOs are now discovering event chronologies, the concepts behind the data, the smoking guns and who's who in a litigation. LPOs still have a long way to go in terms of processes and scale. The consolidation wave is yet to hit the LPO market. But all the indications are that it soon will.

Economic slowdown and Indian LPOs

the recent slowdown in the US has caused the revenues of indian LPOs to rise by 200% in the past one year. Lawyers are one of the highest paid professionals in the US. The same work in India can be carried at 1/10th the cost. This link gives the list of top LPOs in India.

Another step in the ediscovery market consolidation

This announcement by FTI consulting adds another chapter to the consolidation wave in the ediscovery services segment. FTI is set to buy Attenex for 88$ million. This will roughly value Attnex at 3.5 as price to earning ratio. This is lower than what the ediscovery space norm is. Metalincs had 8-16x price to earning ratio. Stratify had 5-6x. Zantaz had 3.75. Guidance and Commvault trade on stock exchanges at 4-6x.
This may mean that the smaller ediscovery vendors that miss the consolidation bus might be at further risk of being devalued.

Lalit Bhasin in Mint argues for foreign law firms to be allowed to do business in India. India has the second largest pool of legal talent after US. The Indian legal services market is expanding and lawyers are donning various hats. Law firms here have collaborated with US law firms in giving legal advise to indian arms of several MNCs. As of now the foreign law firms cannot practice in India, but many of them, through liasons, do a backdoor entry. Perhaps it will be wise for India to open up to them and see the legal sector move to a new trajectory as did telecom and insurance.

Where BI ends unstructured data begins

when a CXO can get consolidated information in a tabular/chart form why would he look further. But that is because he is tracking those numbers and his job is to track. The level next to the CXO entails the job of finding and fixing the whys behind those numbers. And the next level of intelligence, derivative kind of solutions will be built to enable these executives. Think about a telecommunications company's sales manager who drills into the organization's BI system to discover that there is a high-correlation between delayed payment, high customer complaints and plan C for the cellphone connections that the company provides. So coming to the conclusion that plan C is the culprit the marketing team goes on the drive to switch people from plan C to B. After few months of effort and many plan switches they still find high rate of delayed payment, higher number of complaints and greater churn. The BI system could not have provided the cause AND especially in this case since the cause was different (not-obvious) the BI actually ended up misguiding. The cause was actually in the notes scribbled in the CRM system of the company and the escalation mails that the network department had received. The rate of call drop was alarmingly high; since plan C was the best selling plan, the correlation tied in with plan C.
Businesses are coming together (Autonomy and Zantaz, HP with Tower Software, Iron Mountain and Stratify) to bring in unstructured information into business intelligence. This is going to be a whole new turf for ediscovery and BI companies alike.

Review enabler

Document review forms about 60-90% of the ediscovery expenditure. Legal services market today stands close to $250 billion. Considering that 98% of the cases don't end up in trial we can easily conclude that the vast chunk of legal services market belongs to the discovery phase. And within ediscovery the lion's share belongs to document review.

So anything that can cut short the review, time and expenses, would always be welcome in the market. people have been trying different approaches like concept review, statistical review, metadata filtering, sophisticated keyword searches etc etc. to get around the review cost.
Legal process offshoring has gathered momentum as an off-shoot of that.