19 April 2017 – Waaaaaaay back in 2009 we wrote that even with contract attorneys providing law firms the opportunity to cut their bills/its costs with respect to e-discovery, the expenditures can still be prohibitive, particularly in high-cost regions like D.C. and New York where the cost to house document reviewers on a contract basis is higher than elsewhere in the U.S. As we have reported in numerous posts, besides the state-of-the-art technology driving costs down, the drive to cut costs has led corporations and law firms to seek other ways to cover their e-discovery work — without sending it overseas.
We wrote about “farmshoring” – a development of staffing projects in preferred locales that the industry calls the lower cost “on shore” centers.
NOTE: it was started by IT industry backing the 1970s. Most companies did not wish to offshore work and ship jobs overseas to reduce costs so they explored domestic rural locations. While the cost of living and labor wages in rural areas could effectively compete with the labor savings touted by offshore providers, it was the avoidance of offshore troubles such as cross-cultural confusion, transnational legal woes, and time-zone differences that was at the heart of its appeal.
That has become even more the case today. For example, a large amount of D.C. and NYC contract attorney work has moved to areas like Atlanta GA, Columbus OH, Houston TX, Miami, FL and Nashville, TN – smaller metropolitan areas where pay rates are lower but the quality is just as high.
But the areas that have seen huge spikes in work are the Metro Detroit area and the Charlotte/Raleigh NC area.
And it is not just the private litigation/investigation work. The Federal government work is moving, too. Yes, antitrust and merger work will remain in D.C. … several large D.C. firms told us that D.C. contract attorneys are often more familiar with the federal practice issues they need to be resolved in antitrust/merger work … but Federal government investigations and financial services work and civil litigations are being delegated out of D.C. to Federal agency satellite offices.
NOTE: what is growing in D.C. are Federal government contractor positions offered by numerous staffing agencies and legal vendors, as well as directly via Federal government agencies (we now have 18 Federal agencies posting jobs directly with us). These tend to be paralegal positions/law clerk positions that pay anywhere between $24 and $36 an hour and involve document review work, due diligence review, and assorted litigation support assignments.
In a recent presentation at a IQPC corporate counsel event on e-discovery, one GC noted:
we are all re-thinking our cost-saving strategies, and expanding it to ask not only who is performing document review, but where. Companies are starting to accept that the location of the contract lawyers is irrelevant. The quality can be found all over. There is nothing magic about the D.C. contract attorney pool.
His department has made it a policy to avoid DC and NYC for contract attorney work.
And so a significant upswing to these “on shore” centers — to U.S.-licensed lawyers in less expensive areas of the country. And areas with a wealth of law schools, and a varied supply of legal skills and legal services capacity, so housing document reviews is not as expensive as other regions.
Which is why we’ve recently seen a 50+ lawyer document review in Chicago, a 45+ attorney document review in Raleigh, and a soon-to-launch 50-100 attorney document review in the greater Detroit area.
It also explains why The Posse List membership roster … we average 85 new members a week … has shifted (percentage wise) to Florida, Illinois, Michigan, and North Carolina and away from D.C. and NYC.
We’ll keep an eye on this trend.
Gregory P. Bufithis is the Founder & Chairman of The Posse List. He has over 25 years of experience in intellectual property law and digital media in the U.S. and Europe.