Throughout our coverage of the Georgetown University Law Center’s conference on “Law firm evolution” (click here), the hot topic of conversation was the recent development of entrepreneurial law firms.  As discussed by Richard Susskind in his book ‘The End of Lawyers?’ and our interview with him during the conference (click here), innovation is the driving force behind today’s global economy.  Successful law firms advise clients on their legal options but they also have the experience and resources to assist clients with coordinating and managing a wide range of service providers such as project managers, deal brokers, accountants, linguists, strategy and management consultants, market experts and valuation experts to name a few.

No firm personifies this more than the Washington, D.C. law firm, Kalbian Hagerty LLP.  Headquartered in the nation’s capital, Kalbian Hagerty LLP has an office in Abu Dhabi, United Arab Emirates, and a strategic alliance with a prominent law firm in Riyadh, Saudi Arabia.    With decades of international experience and a global perspective, the attorneys at Kalbian Hagerty provide diversified legal services to its clients in practice areas such as banking, defense, engineering, construction, health care and securities law. The Firm’s expertise in the Middle East has made Kalbian Hagerty the go-to law firm for legal work in the Persian Gulf.     

This Wednesday, April 28^th, Kalbian Hagerty managing partner, James R. Hagerty, is the lead presenter at the highly prestigious Army and Navy Club series breakfast, this one entitled “Doing Business in the Gulf”.  We caught up with Jim at his D.C. offices: 

Project Counsel (PC):  Jim, our thanks in providing us time to chat with you.  We know your travel schedule is hectic. 

James Hagerty (Hagerty):  Greg, it’s a pleasure.  ProjectCounsel.com and ThePosseList.com are both on my reading list so I am happy to sit down with you and discuss trends in the industry and developments in the practice areas our firm is involved with, especially our Middle East practice. 

PC:  Jim, to start, please give us an overview of your firm’s work. 

Hagerty:   Kalbian Hagerty is an international general practice law firm with corporate, transactional and litigation/dispute resolution capabilities.  Our clients include public and private corporate groups, family offices, government agencies, partnerships and high net worth individuals.  Our international team of attorneys regularly collaborate on client matters and also serve as transnational business facilitators, delivering counsel and overseeing transactions that bridge foreign cultures and international legal systems. 

PC:  And your practice areas are quite diverse, yes? 

Hagerty:  They are.  In the Middle East, our practice includes market entry advice, regulatory advice, contract negotiation, dispute resolution representation, joint venture structuring, international tax planning, and agency issues. 

PC:  One of factors that made Kalbian Hagerty successful in the Middle East is discussed by author Richard Susskind in his book and it was also emphasized again and again during the Georgetown University conference:  value. 

Hagerty:   Exactly.  Quite honestly, being focused and cost-conscious is not new to us.  We know that in order to thrive in today’s competitive marketplace, we must add value to each client’s business.  We seek to understand the workings of our client’s business and to anticipate our client’s needs.  And that is what has gone a long way in building our reputation in the Persian Gulf and elsewhere as a competitive and unique law firm.  Our competence along with emphasizing value has given us the privilege of advising and representing some of the world’s most discerning businesses. 

PC:  Your take on the “new new” world in the legal market? 

Hagerty:   I think Susskind makes some valid points.  I believe that the niche international law firms of the future, will be superbly schooled and genuinely expert in the related disciplines of law, culture, linguistics and business.  Because of this, these firms will be able to deliver value promptly and efficiently to clients.  Some lawyers have an image of the adversarial “client warrior” and that concept has dominated historical ideals of the lawyer.  But while zealous commitment to client advocacy remains one of the core norms of the U.S. legal model — and our law firm — the punitive cost of litigation (or arbitration) have prompted many clients to emphasize team work and conflict resolution rather than protracted litigation and dispute. 

PC:  So Kalbian Hagerty has actually been ahead of the curve? 

Hagerty:   We think we have.  Those law firms that are changing or streamlining their business now are probably the most forward-thinking firms.  Experience is essential to becoming a successful entrepreneurial lawyer. But I would say that the landscape of the future for most lawyers in the United States is going to be extremely different.

PC:  Tell us a bit about working in the Persian Gulf. 

Hagerty:    My partner, Haig Kalbian, has been working in the Gulf since 1984 when he graduated from Notre Dame Law School.  Many of our lawyers have lived and worked in the Middle East for decades.  Kalbian Hagerty opened its office in Abu Dhabi in 2003 when not many were aware of Abu Dhabi, Dubai or the United Arab Emirates.     We also work in Saudi Arabia, Bahrain, Qatar and Kuwait.  

PC:   Have you noticed growth in the number of US law firms opening offices in the UAE and the Middle East? 

Hagerty:  Yes.  The number of international offices has grown exponentially the last two years especially.    The economic downturn has forced many US businesses to look overseas for work.  This is especially pronounced in the real estate, construction and related professions such as civil engineering and architecture.    Asia continues to attract U.S. firms and new offices continue to open in Beijing, Hong Kong and Shanghai, China, and other major hubs.     

PC:   And more competitive. 

Hagerty:  [laughing]  Yes, the pool is a lot more crowded than when we started.  But that’s the key.  We have been present in the Gulf for decades and our strength in that region rests on our unique capability to fully navigate and bridge international legal systems and understand the cultural and legal dimensions of diverse business transactions.  This enables us to provide both our Middle East and international clients with unusually comprehensive solutions to their global business challenges.   There has been phenomenal growth in the region but we have grown with it. 

PC :   And the overall environment in the region? 

Hagerty:   The situation varies by country and in the UAE by Emirate.    Dubai’s economy, which is largely dependent on the property sector, is in very tough shape.  It will take years for it to fully recover from the downturn in the property market which apparently has not yet bottomed out.  Abu Dhabi, because of its oil wealth and more diversified economy has slowed down but is still developing quite quickly.  The Abu Dhabi real estate market has stabilized.  The UAE government has stepped in and is pursuing a number of infrastructure and public works contracts including airport expansion, road construction and a huge nuclear power program.  Saudi Arabia’s economy has weathered the financial crisis well and its fast growing economy and large population presents a significant opportunity for US exporters.  Bahrain is a financial services powerhouse and Qatar, while small is growing quickly and presents attractive opportunities. 

PC:   How about direct government work? 

Hagerty:   We assist our clients with public tender processes which are now mandatory in most cases, similar to our system of public contracts. In many of the open tender processes are these days divided into independent and smaller sub-projects which enables even small to medium sized companies to compete in them. Finally, local companies and authorities are keen on buying western technologies and solutions.  We assist in all those endeavors. 

PC:  I noticed on your website that you have the Foreign Corrupt Practices Act (FCPA) in Arabic.  Your firm actually reviewed and provided input to the U.S. Commerce about that, yes? 

Hagerty:   Yes, we worked closely with the U.S. Commerce Department to translate the FCPA into Arabic and then we had to gain approval from the U.S. State Department of our translation before we could post it to our web site.  

PC:   Your view on FCPA issues in the Persian Gulf? 

Hagerty:  The Department of Justice and the Security and Exchange Commission are investigating and prosecuting alleged violations of the FCPA more aggressively than any time since its enactment in the mid-1970s.  The increased competition caused by the worldwide recession will put more pressure on US businesses seeking to win contracts overseas to so anything they can to win the business.    Businesses in the energy and medical equipment areas and those who contract with foreign governments should be particularly sensitive to FCPA and anti-boycott laws.  

PC:   Jim, many thanks for your time. 

Hagerty:   Greg, always a pleasure seeing you.  If you or your readers have any follow-up questions, please send them to me at jhagerty@kalbianhagerty.com.

For information about the Army and Navy Club breakfast series (see website by clicking here) contact Michelle Morse, Manager – Membership Services, at 202.355.0505 or mmorse@armynavyclub.org.

Our coverage of “Law Firm Evolution:  Brave New World or Business As Usual?”, a conference held March 21-23, 2010 by the Georgetown Center for the Study of the Legal Profession.  For all our posts on the conference click here.

Reported by:   Gregory P Bufithis, Esq.    Founder,  ThePosseList.com and ProjectCounsel.com  

The dinner/panel discussion was titled “What is our legacy to the next generation of lawyers?” and featured as the keynote speaker Richard Susskind, IT Adviser to the Lord Chief Justice of England but best known for his book “The End of Lawyers?”   In his keynote address he spoke about the evolving and fluid spectrum of legal services categories, the deep and rapid technological advances changing the law firm business model, and the “decomposition of legal tasks” into component parts.  For our full video interview with Richard click here.

The remainder of the panel was composed of Paul Lippe (Founder and CEO, Legal On-Ramp), Mark Harris (CEO and Founder, Axiom), Jeffrey W. Carr (Vice President, General Counsel & Secretary, FMC Technologies Inc.) and John Palfrey (Henry N. Ess III Professor of Law; Vice Dean, Library and Information Resources, Harvard Law School; Faculty Co-Director, Berkman Center for Internet & Society). 

Paul Lippe (panel moderator) started us off with his presentation “Is There A“NewNormal” For Law?” and made a great analogy with Lewsi and Clark and Google Maps.  The essence of his point:  the law firm model is like Lewis & Clark:  just go out and explore.   For the rest of world that “gets it” …. well, they use Google maps.  Paul’s point is quite simple:  law firms have always insisted “we are different” but they are missing the boat and need to realize that their way is gone and they need to do what so many other businesses (and the law is a business) have done to become successful.  Paul spoke of the “new normal”  and the and how different structures will delivering legal services. 

Paul had several themes:

1.  In law, the attitude has been “more is always better”–smarter, more credentialed people working more hours in bigger firms; for clients “better is better.”  In the new normal, the theme will be alternate staffing, as clients and firms show that there are a great array of folks who can deliver outstanding work product in different organizational settings.

2. In law, prices have only gone up; for clients, prices of lots of goods and services (including the ones they sell) have gone down. In the new normal, the theme will be predictable pricing, where clients and firms share a reasonable expectation of price and value, and work together to meet it.

3. In law, the attitude has been “what we do is so complex it can’t be measured.” Meanwhile, clients have grown accustomed to measuring everything. In the new normal, the theme will be defined quality, where work product will be assessed according to explicit, outcome-based criteria.

4.  In law, the emphasis has been on “bet the company” matters, driven sometimes by Eliot Spitzer (pre-scandal) and his ilk. For clients, every day is a “bet the company” day due to intensifying global competition. In the new normal, the theme will be client intimacy, where firms do a better job of enabling success and preventing failure (including pre-empting “bet the company” scenarios altogether) by being more tightly integrated with and knowledgeable about clients.

5. In law, the way to do things is usually “how it’s always been done”; for clients there is a relentless questioning of “how can we do this better?” In the new normal, the theme will be technology enhanced services, where new tools enhance, but don’t displace, smart lawyers, enabling them to work better.

6. In law, the attitude toward innovation has been “if it ain’t broke, don’t fix it”; for clients the underlying awareness has been “somewhere a 26-year old is inventing something that will blow up your business.” In the new normal, the theme will be process innovation, where firms and clients find ways to do work better, faster, and cheaper.

For Paul’s full presentation click here.

For Mark Harris, the demand for corporate legal services broadly segments into three categories: 

1.  experience

2.  effciency

3.  exceptional events

The legal demand that arises from exceptional events are urgent, episodic, material to the overall corporation and can require rare expertise. !ese events are often handled by hierarchical, heavily infrastructured and expensive firms.

The legal demand of experience is of moderate urgency, material to the internal business unit, and requires sophisticated legal training and skills, industry expertise, and integrated knowledge of the client’s business.  This work is often handled by in-house counsel or firms such as Axiom or boutique or regional law firms.

The legal demand of efficiency is high volume, quasi-legal in nature, and can require process expertise.  This workload is often handled by paralegals, temp attorneys and LPOs given that efficient workflows have been established to best suit the needs of the company.

Jeffrey Carr is, to say the least, a visionary general counsel.  In a way, his message is also simple/basic:  ”we are not lawyers.  We are business people with legal training forged into a cohesive legal team committed to the success of FMC Technologies through focused effectiveness, relentless efficiency, constant improvement, creative disruption and unyielding integrity”.   He spoke about the FMC legal “tool box” which involved numerous vendors, teams and technologies and (roughly) broke down like this: 

*  Integrated matter management –Serengeti

*  Performance based pay –ACES

*  Early case assessment –Decision Pro

*  Streamlining process –P-Card, Serengeti, Sharepoint

* Driving Performance –Meaningful metrics & Snapshot

*  Delivery/Execution –Project & monthly MPR

*  Leveraging internal knowledge –Sharepoint

*  Leveraging external knowledge –Legal On Ramp

*  Leveraging resources –“Cook Book”; Guidelines

*  Leveraging time/space –Webex; Telepresence

*  Continuous Improvement –L2A2

He ended with what may become the quote for the legal industry:  “If you dislike Change, you’re going to dislike Irrelevance even More”  (U.S. Army Chief of Staff, Gen. Eric Shinseki)

For Jeffrey’s full presentation click here.

John Palfrey (author of an excellent book Born Digital: Understanding the First Generation of Digital Natives and among other roles director of Harvard’s library and co-chair of the IT committee)  came with a clear understanding of the competition and global shifts affecting law firms.

He said that the competition for clients and the best talent in lawyers (especially new, young ones) is getting increasingly fierce.   This competition will also lead law firms to explore a broader range of strategies and business models than ever before.   The ecology of types of firms will get increasingly mixed.   A truly consistently first-class firm will continue to be able to charge a premium and will succeed.   But not all law firms can be consistently first-class across all offices.

One view is that U.S. firms will have to adopt a “more internationalist approach” as business continues to head East.  Without an Asia strategy (China and India in particular), no firm can have a leading global practice over the next 10 to 15 years.  The big challenge will be integration of cultures in global practices.  One challenge: developing international skills and dropping the baggage of a colonial past.   The litigation business is much higher for the U.S. firms than for big European firms; and litigation can be huge in the local US market.  There is less need to fish in other ponds for big US firms as there is for European firms, for instance.  What it means to be a “global law firm” is an elastic definition.  

Reported by:  Gregory P Bufithis, Esq.    Founder,  ThePosseList.com/ProjectCounsel.com 

If only we had been listening to Richard Susskind these past 5 years.  He knew before all of us where we were headed.  It was in his 1996 book The Future of Law wherein he claimed that the law would be transformed by IT.  The book generated enormous interest and influenced public policy-makers and top managers in law firms around the globe.  Many of its predictions have already come to pass.   Our legal market melt-down merely accelerated the pace.    But we all know him best for his monumental book The End of Lawyers?: Rethinking the Nature of Legal Services  published in 2008 wherein he said there will be:

1.  an evolving and fluid spectrum of legal services categories: bespoke (one-off, customized or tailored), standardized (drawing upon precedents, process or previous work), systematized (reduced and applied to automated systems), packaged (systematized services exported to clients) and commoditized (packaged services so commonplace as to have little or no market value).

2.  deep and rapid technological advances (of the disruptive kind) which will lead to major threats to various aspects of the traditional law firm business model, those technologies being such as automated document assembly, relentless connectivity, the electronic legal marketplace, e-learning, online legal guidance, legal open-sourcing, etc.

3.   the “decomposition of legal tasks” into component parts that can be delegated to various sources (unbundling) such as in-sourcing, relocating, offshoring, outsourcing, subcontracting, etc.

And this is a mere sampling because we have not sufficient space to discuss the book’s full content.  These points (and more) were discussed  by Richard and others at the conference as well as the prospects of private equity buying stakes in law firms and legal service providers.

But did we speak enough about technology, the development having the most transformative effect on the legal industry?  Richard opines on this and other topics in my interview below:

Logik is one of the more extraordinary companies to come onto the e-discovery scene.  A dynamic company, they derive their name “the formal systematic study of the principles of valid inference and correct reasoning, and; the interrelation or sequence of facts or events when seen as inevitable or predictable.” Or, as in today’s parlance: they’re a lean, mean e-discovery processing machine”.

Located in Washington, D.C., in beautiful loft space across from the National Portrait Gallery, the company counts AM Law 100 law firms and Fortune 500 corporations as its client base.

We had the opportunity to spend a few hours at Logik’s corporate headquarters talking with Andy Wilson.

TPL: Both you and your co-founder, Sheng Yang, were in school together at Virginia Tech, but you didn’t really know each other until after school, correct?

AW: Correct. I actually started college as an English major but moved to Computer Science, graduating with a degree in Business Information Technology in 2001. Sheng and I did meet briefly at Virginia Tech.  We both worked at a web design company for a few months, but we didn’t really know each other.

TPL: But straight after school you went home to Kentucky and tried “the entrepreneurial thing” and did independent web design.

AW: Yep. After a year in Kentucky, I realized I wasn’t really in the right place to launch my web career, so I headed to D.C. (proceeds from my tax refund check happily in hand) and began to interview with a multitude of government agencies. The government was in a hiring frenzy with respect to tech/web people. Thing was, as I cruised the various floors of endless cubicles (think “Dilbert” here), I said to myself, “Andy, do you really want to do this?” and the answer was a clear “No.”

TPL: And an opportunity popped up at Driven?

AW: That’s right. I was hired at Driven as a “techie,” which I did for several months before moving into sales. At the time, Driven specialized in various aspects of litigation support including digital reproduction, paper discovery, scanning, copying, printing and graphic design. It was not “e-discovery” per se, but it was fascinating because we sold the accounts and the projects, and we actually did the scanning, printing, blowbacks, etc.

It was incredibly long hours, but I was in my early twenties and didn’t mind. I was able to bring in a few top AM Law 100 law firms in my first year, generating about $1 million in sales over my first 12 months. And it was at Driven then I reconnected with Sheng.

TPL: And an idea was formed ….

AW: Yep! I wanted to go into application development, to create an easy and scalable software platform to do eDiscovery processing. And I found in Sheng a kindred spirit. But, at the time, Driven did not want to become a software company, so we parted ways and Sheng and I went off to start an eDiscovery processing company.

TPL: With an idea … but no clients.

AW: Yep, no clients – we had nothing to sell yet! (laughs) Sheng and I spent about a year writing code and our business plan, living off our credit cards, my wife’s salary… and working from my dining room. In the spirit of Steve Jobs, Apple and his garage!!

TPL: And then enter … Superior Glacier, your first client.

AW: Superior Glacier is an end-to-end litigation support provider focused on marketing in New York, Chicago and Washington, D.C. They first came to us through a friend of a friend. We were expecting the usual “tell us about Logik” – you know, a simple introductory meeting. Which we did on my couch. But then they whip out this DVD and say “Well, we are having issues with this data, what can you do with it?” So, we loaded it up onto our server (and quite frankly we were a little apprehensive thinking “Man, I hope this works!”) and we ran it through the software we developed: Gridlogik™.

TPL: And, of course, Superior Glacier was more or less expecting your response to be “We’ll get back to you in a few days…”

AW:  Exactly. Except our software went through its paces and produced the results they were looking for in about 30 minutes. All the files were accurately processed, converted, numbered and exported with ready to import load files.

TPL: And you blew them away.

AW: Pretty much, yes. I don’t think they were expecting two guys in a dining room to solve their eDiscovery problem, but we did.

They had been working on this data set for almost two weeks with no results. We pointed out the problems they were having and how our software identified and fixed them. After they thoroughly rummaged through the output to confirm the results, we got to talking about pricing. They were used to the industry standard, which at the time was to charge based on the number of gigabytes the data extracted to, post processing. (Note to readers: Data extraction is the process of breaking down structured and unstructured data into individual records or documents. For instance, saving attachments from emails as their own documents or extracting files from .zip files is considered data extraction. This process is time-consuming and can result in the original data set exploding in size, often doubling and sometimes tripling from the original size.)

We had then, and still do, a very simple pricing model. We built our technology in a way that allows us to price eDiscovery on the original, non-extracted data size. We engineered a data-mapping algorithm that quickly identifies all documents in a data set without actually extracting it. Basically, it’s our secret sauce. So, this attractive pricing model coupled with a new technology that was very capable got Superior Glacier thinking. They sent us our first “real” project the following week.

TPL: And they paid you $40,000?

AW:  Just about, yes. Sheng and I were singing and dancing. We thought “wow, we really are onto something here!” All of our start-up costs were covered and we had enough money left over to buy some more servers.

TPL: Ah, yes, the giddy feeling from the first paying client.

AW: In fact, they flew us up to New York to discuss a potential acquisition. Then we KNEW we had something! However, we took the road less travelled, so to speak, and decided to keep Logik between Sheng and I. Superior Glacier is still a client today and we help them on a few legacy cases.

TPL: I imagine you have had a number of companies who want to license your technology (which we think can usually end badly, resulting in “brand smashing,” among other issues).

AW:  There have been a few companies interested in licensing Gridlogik, but we have always turned them down. Right now we are a business-to-business services company. If we licensed our software, we lose control over technology and become only a software company. If someone else used Gridlogik and made mistakes, that would negatively affect our reputation and our brand. We always want to do it right.

TPL: So, we have a very happy Superior Glacier. And then Fried Frank comes on board.

AW: The DC litigation manager at Fried Frank had some complex processing problems that involved unified communications, specifically Bloomberg data. (Note to readers:  for some background information on unified communications click here).

While analog is somewhat easy to analyze and parse, unified communication offers one enormous text file. Meaning, you need to know how the software created the file and requiring you to break out the metadata, and so on. It’s much more complex. In the case of Fried Frank’s client, they had about 20 gigabytes of this stuff that needed to be reviewed. And of course, we were eager to do whatever we could to help our new client. So, we modified Gridlogik to quickly parse and piece all the data together into a reviewable format similar to what they were getting with Outlook email reviews. We finished the project in less than two days and the client was very, very happy.

TPL: And this led to Fried Frank referring Williams & Connolly, who referred you to Finnegan and Henderson, etc., etc.

AW: Exactly. We have done very little direct marketing. Almost all of our business, both for law firms and direct corporate clients, has come from referrals. Granted, it’s a somewhat slower customer acquisition process, but we find it beats cold-calling any day, and we’re fortunate to have very loyal, happy clients.

TPL: Tell us a bit about the first work for Finnegan — without mentioning the actual corporate client. You know, confidentiality and all that.

AW: Well, Finnegan had been working with a vendor (client’s choice) who had totally screwed up the data processing on a high-profile matter. The vendor had worked for months on it. There were missed deadlines, incorrect deliverables and poor communication throughout. Obviously, this would frustrate anyone, so Finnegan decided to look elsewhere for help. Logik was recommended to Finnegan by one of our clients and we ended up winning their confidence after processing some sample data. In under two months we re-processed all the data, matched up the already coded documents, and re-produced the data in a much cleaner and consistent manner. And with that, Finnegan become a happy client of ours, too.

TPL: You do a pretty large amount of work for a major top 3 accounting firm, yes?

AW: We do, yes. That work is mainly for rapid “banking-related” document productions to the government. They also work with us on more complicated Lotus Notes projects that they would rather outsource to us. It’s a great working relationship that we value highly.

TPL: Tell us a little bit about your work with predictive coding, that is, the capability to use a small set of (partially) coded documents to predict document coding over the complete corpus. I believe Recommind has done a lot of work in this area.

AW: Sure. Predictive coding is going to be big in the next few years. It makes sense, considering the volume of data lawyers have to review in a finite time frame. To get our feet wet in this space, we participated in the 2009 TREC legal study. It was fascinating and quite challenging, but we learned many useful methodologies to help our clients use advanced machine learning techniques to apply predictive coding to their documents. Like everyone, we are new to this area, but we are putting more resources into it in the coming year. We’re pretty excited about it.

TPL: As we discussed, the big “new new” thing all of last year — at every event we covered — was early case assessment and winnowing relevant data down to reduce the number of documents to review.  As the stats bear out, it is the most expensive part of the process.  But now we have predictive coding, plus the work being done in computer assisted review as evidenced by Patrick Oot and Anne Kershaw’s study “Document Categorization in Legal Electronic Discovery: Computer Classification vs. Manual Review “, plus the work being done by Google and Microsoft on auto-categorization or auto-coding.  Are we headed down the path to where machines can be statistically proven to be as accurate as human review?  Is the technology getting to the point where we can also winnow out the eyeballs — contract attorney reviewers?

AW: There’s too much value in humans to take us out of the equation. Technology is just a means to an end, and I don’t think we will see document review sans humans in our lifetime. I do see document review teams getting smaller, focused and more tech-savvy, like your “special ops” reference. With the right set of tools, a small number of tech-savvy attorneys can rip through massive amounts of data in a very short amount of time. The days of expensive linear review are numbered.

TPL: But the legal industry is… to put it mildly … risk adverse. Despite the lamentations of Richard Susskind and Jordon Furlong that the law profession needs to understand the tectonic changes that are occurring, and that change will only come slowly.

AW: “Risk adverse” is definitely putting it mildly, but smaller, younger and more agile firms are starting to sprout up, willing to take on traditional practices with new billing structures and a willingness to use technology in the best interest of the one paying the bills: the client. This follows a similar path as Logik – a small, fast-paced and lean company that can deliver results in a new way using new tools and methods. Things change, and to stay prime you have to stay on the wave of that change.

TPL: In Malcolm Gladwell’s book Outliers, he mentions Skadden, Arps as an example of a firm that has taken an opportune period of time, and some cultural advantages, to give it an edge. He also talks about the “10,000 Hour Rule.” Sort of reminds us of Logik, yes?

AW: I think so. The 10,000 hour rule is an interesting concept. Basically, it comes down to timing, perseverance and practice, practice, practice. We were fortunate to start our company at the right time, just when eDiscovery was starting to get hot in 2004. We persevered through very tough times trying to validate our market and our existence being a niche processing player. And we got a lot of practice. In the first few years, we focused just on eDiscovery processing, exposing us to many unique situations that our competitors haven’t even come across yet. Unfortunately, it meant I saw my wife for maybe only two hours a day for a year. But you do what it takes to succeed. It was a lot of hard work, but also very fun.

TPL: You now have a multimillion dollar business, all done with 14 employees. But you are expanding. Given the nature of your operation, I imagine you need to consider “culture matching” to a great degree.

AW: We do. We have been looking to add an additional eDiscovery project manager … and, in fact, we advertised via The Posse List and got a great response, thank you! Fitting into the culture is super important to us. Logik isn’t for everyone, so it’s tough to find the right person. And we don’t compromise based on someone’s resume. We encourage people to check the website at logik.com for openings.

TPL: Ok, now, a key question: your Logikbot mascot, symbol [shown above] … just what is that thing?

AW: Ha! Logikbot. Well, he’s both, really. Logikbot is a metaphor for who we are; a small team of smart and motivated people offering great technology and service, taking on the established big vendors, we call them BV2000′s. Unlike many companies in this space, we embrace the fact we are small and nimble. It’s a big advantage for us, so there is no reason to act all big and mighty. Our clients and our work speak for itself. Logikbot is akin to the main character in Rudy… who doesn’t want to root for the little guy?

TPL: And this new site you have created called eDDstuff.com. That’s charity-driven, yes?

AW: Absolutely. We’re really happy that eDDstuff.com is a fun, charity-driven destination. We figured the eDiscovery industry needed funny and witty t-shirts, so we created about nine different designs from “eDiscovery ninja” to “eDiscovery nerd.” Ten percent of every purchase goes to a local DC charity, with the rest going to the vendor who makes the actual products. It’s been a huge success since we launched it and the orders have already started coming in.

TPL: Andy, it was a pleasure chatting with you. We appreciate the time you’ve taken.

AW: This has been great, let’s do it again soon. We have some very interesting things coming out in 2010 that we think your “special ops” team will really like.

In Part 1 of our Trends series (click here) we provided some brief observations on trends we see in the contract attorney market and e-discovery market based on our conversations and meetings over the last few weeks. 

Here in Part 2 we concentrate on going solo/freelancing,  and building a website/blog.  In Part 3 this afternoon, we discuss how to get published and market yourself. 

Our earlier posts have addressed the changing legal landscape and new paradigm as outlined by such writers as Richard Susskind (click here) and Jordan Furlong (click here) we have touched upon how/what contract attorneys can do/need to do to stay employed and what type of “exit strategy” they can employ to improve their lot.  For all our posts on the subject click here.

But let’s discuss some of these “exit strategies” in more detail,  with a focus on “going solo” and doing a blog.

Note:  we are going to mention a number of lawyers, vendors and web sites below.  The Posse List receives no compensation or referral fees for these suggestions.  These are sources we have discovered via LegalTech and ABATech and by conversations we have had via Twitter and other social media venues, as well as personal contacts.  We provide links and other information so you can contact these sources directly and do your own due diligence.  

Going Solo in a New Economy – where do you start?

As Jordan Furlong says in his most recent post (click here)  the legal profession is going to go through a crisis, one triggered by a growing buildup of law school graduates who can’t find work with legal talent demand narrowing to lawyers with proven skills and/or experience.  

Like many other industries, the legal profession is being forced to make changes in a 21st century economy. Since 2008, law firms shed 10,000 associates, and these jobs aren’t likely to ever return.

For contract attorneys, besides the fall off in work, the technology keeps getting better and better (an issue we covered here) and as a result project teams are getting smaller and reviews shorter.  A few law firms told us they are dealing with smaller litigation budgets,  the “lopping off” of potential litigation issues that law firms and clients were initially willing to examine, and assumptions that early case assessment will find most of what they need to focus on.  

So, while there is an uptick in work due to regulation and compliance projects, most of these jobs aren’t coming back.  This dynamic has proved true in past recessions as well, with fading industries pushed to the brink during downturns before others emerged to create jobs when economic growth inevitably resumed. Why should it be any different for the law industry?  But with job losses so enormous over such a short period of time, the latest crisis challenges the traditional American response to hard times.  And the next decade was always going to be difficult.  As retirement beckons for the middle-aged “bulge” in many national populations, governments have been facing an expensive demographic transformation.  The economic crisis makes the outlook only worse.

Whether you’re a contract lawyer, a new grad or a laid-off associate you’ve got to take charge of your legal career.  And even if you are currently employed, shouldn’t you have a “Plan B” at the ready?   Granted, hanging your own shingle is a risky option but it is one that many of us simply may have to take.

So where do you start?  Luckily enough, you start tomorrow.  Two of the “gurus” in the how-to-go-solo business are Carolyn Elefant (click here)  and Susan Carter Liebel, founder of Solo Practice University and author of the Building A Solo Practice blog (click here) lead a free teleseminar tomorrow (June 9^th) at 12 noon titled ”Going Solo in a New Economy” and will talk about: why starting a law firm doesn’t have to be your first career choice but maybe your only career choice;  why you don’t need a years worth of savings to start a law firm, nor may you have the luxury of a years worth of savings, etc.  For full registration details click here. 

Look, no one said it’s easy and we know many Posse List members have a boatload of debt and other issues.  But don’t buy into the many myths associated with starting a practice and ignore the positives.  Think about a “Plan B”.

And if you can’t do the seminar take a look at Carolyn Elefant’s book Solo by Choice  and or another excellent book  by Jay Foonberg titled How to Start and Build a Law Practice.

And coming up June 24 Carolyn teams up again with Julie Tower-Pierce, author of Staying at Home, Staying in the Law for their second workshop PinkSlips, Detours and Re-Entries.  We’ll have more on this later today in Part 3 when we discuss how you can get published and “brand” yourself.

To sum up this section, we have a very good article on The Posse Ranch written by Susan Cartier Liebel and she takes you through all the reasons why “going solo” is doable.  For the article click here.

An explosive combination:  blogging and social media for solos and freelance attorneysBlogging and social media: scores of Posse List members are utilizing them and doing great.  We have received As a solo or freelance attorney, it can be a  powerful marketing tool.  As the experts say “ignore blogging at your peril; blog poorly and you’ll pay for it.  Do it well and the results might shock you”.

Ok, so much for the marketing pitch.   But it’s true. Now, if you have a lot of time on your hands (and sometimes we do) and you scan the web you’ll find that that to increase the power of your blog to reach clients and peers by at least a factor of ten, stir social media into the mix.  And by “social media” we are using a catch catch-all term that refers to a host of different kinds of web services with a strong social interaction component.

In these services, you identify people as friends of yours, and they do the same for you (sometimes they’re called friends, sometimes they’re called followers, depending). And then, you do what friends do: you be social, you share stuff:

• On YouTube you share videos 
• On Facebook  you share pictures, updates, vieos, etc.
• On Twitter you share “tweets” which are short updates and chats
• On  LinkedIn you share business and career stuff
• On  Delicious you share web pages you like
• On Scribd you share documents
• On Slideshare you share slide shows.
• On Blip.fm you share music

Serendipity and word-of-mouth are both powerful events that happen on the web all the time. The more possible ways there are for someone to come across you online, the more likely it is they’ll end up on your blog. If they’re reading your blog, it’s more likely you’ll get even more links and traffic. It’s also more likely you’ll get more clients and have a higher status among your peers.

Why is this? Because traffic and links confer authority. They are a silent endorsement. Google understands this. That’s why they measure a web page’s authority based in part on how many other authoritative web pages link to it (this is called PageRank). A high amount of authority and PageRank means your blog will rank higher in a search.   Rank higher in a search means you’re more likely to get traffic, and the circle is complete.

When you have a dozen social media profiles in addition to your blog, do you know what the search page at Google looks like when someone searches on your name? The entire page is filled with links to you! Every one of those links eventually leads back to your blog… and that’s the idea.

Each social media interaction, each social media profile page, is a signpost pointing back to your blog. Those signposts guide people to you in a way nothing else can, because they’re essentially word-of-mouth marketing. If you weren’t participating in social media, those signposts wouldn’t exist.

Paid advertising simply cannot compete with this, because no matter how much you spend, paid advertising can never achieve the level of trust inherent in a link someone posts for their friends on Facebook saying, “you HAVE to read this!”

Your blog is like a hub in the center of a wheel. Social media profiles, links, shared content, and other activities creates spokes which radiate back to the hub, leading to it.  Without those spokes, your hub has very few paths pointing to it.

You don’t want your blog to be an isolated island with no bridges leading to it. You want it to be like Grand Central Station with people coming at it from everywhere.  A strong social media presence makes this far more likely in a much shorter time.

If all the social media possibilities seem overwhelmingly endless, don’t worry. The point of entry is where ever you happend to start.  I would suggest Twitter and LinkedIn to start.

But if you really want to learn the specifics about successful blogging and social media for lawyers, then you have to check out with these guys: Blawging Lawyers.  The whole purpose of Blawging Lawyers is to show you exactly how to do this, step by step.  If you need help designing and building your blog check out G2 Web Media which is a blog consulting, coaching and design group headed by Grant Griffiths.  We have scanned and chatted with scores of “blog mavens” on the web and these guys are the best. 

Note: these vendors and others will be offering  special events and special packages to members of The Posse Ranch which has a separate mailimg list.  To join go to The Posse Ranch (click here) and get on the mailing list via the link in the upper right hand corner. 

Coming up in Part 3:  how to raise your profile, “brand” yourself, market yourself and get published.

Gregory P. Bufithis, Esq.   Founder and Chairman, The Posse List

We covered Richard Susskind’s speech at the ABA TechShow (click here) and we had previously covered his thoughts in our “Changing Legal Landscape” series (click here).

Today’s Legal Blog Watch reports on a trend of BigLaw being dumped for lower-priced boutiques following the lead of DuPont and adding firms with 300 or fewer lawyers to their rosters of outside counsel — saving as much as half compared with what they would pay larger Wall Street firms.

But as the Legal Blog Watch report says “No question, companies still turn to the old standbys for those bet-the-farm cases. More and more, however, they are turning to mid-sized and even small boutique firms to handle their outside work. But interestingly — and here is the part that fits squarely with Susskind’s comments — work is not being doled out on an all-or-nothing basis”.

For the full Legal Blog Watch article click here.

Keynote speaker Richard Susskind “wowed the crowd” and he was usual best.  We saw him last year in London shortly after his book The End of Lawyers?: Rethinking the Nature of Legal Services was published and he continues to give a grand performance.  And his humor is as crisp as ever.

He kept to the main points of his book:

1.  Deep and rapid technological advances (of the disruptive kind) leading to major threats to various aspects of the traditional law firm business model

2.  Relentless connectivity, and the burgeoning electronic legal marketplace

3.  The “decomposition of legal tasks” into component parts that can be delegated to various sources: in-sourcing, relocating, offshoring, outsourcing, subcontracting

Susskind started with the classic Einstein & chauffeur story and stated that the themes of his presentation will be: future, market, commoditization, technology, shape and lawyers.  He prefaced his themes by stating that the hunker down strategy that is currently employed by law firms is fundamentally flawed because in 18 months it will not be business as usual due to the fact that current economic and/or market factors have permanently change the legal terrain.  Thanks to other forces, there has been an acceleration of efficiency effect that will change how our services are delivered and what a client truly finds necessary.  To help illustrate his “what customers want” point, Susskind used Black & Decker as an example (a power drill versus the hole in the wall).  The fundamental need that clients have is for our knowledge and how to turn that into value.  Firms have been profitable because of their position as a reactive tool in the marketplace even though clients are truly seeking proactive ways of dispute avoidance and risk management.  To help drive his point of that there is disconnect between a firm and a client, Susskind used an illustration of a cliff with a fence at the top and an ambulance at the bottom.   Basically, firms have been comfortable in improving the ambulance when clients have always wanted a stronger fence.  One of the ways to begin to remedy this issue is the “allowance of the impossible,” meaning a marriage of automation and innovation in the legal marketplace.

Susskind stated that there is currently a three part dilemma in the marketplace: reduce internal headcount, reduce external spend and clients want more for less.  On a side note, Susskind mentioned that there appears to be a new movement of external investment or management heading towards firms in the form of private equity and venture capitalists wanting some degree of partnership. What is fueling the dilemma is a client’s raw strategy (cutting costs and multi-sourcing to complete the task at hand) and community sharing (via a hybrid of social networking, collaborating with an online community, so to speak, to share costs and harness the power of relevant departments such as IT).  If a firm is to survive, they have to stop using a hunker down strategy and adopt a form of commoditization.

In the past, lawyers customized, or bespoke, a pleading to a particular matter or need.  Today, firms still claim that everything is customized to a particular client and fight any form of commoditization because there is no money to be made.  Susskind stated that this train of thought is incorrect and through standardization as well as various packaging of the “knowledge,” the marketplace will evolve and be in a better position to address any issue (i.e. tax law).  Overall, client work being bespoke is a romantic concept not reality and the reality is that legal work is nothing more than a bundle of twigs that can be decomposed or separated into various tasks and/or elements that can be allocated across a broad spectrum of entities (basic project management).  The client’s mentality is that changes need to be predictable, cost must be decreased and quality must be increased (via the distillation and synthesis of experts) into one simple model or package that can be recycled amongst an online community with mass collaboration.

Drawing from Ray Kurzweil’s works, as technology improves, it causes changes in any given subject matter becoming the heart of everything. Utilizing the differences between the manual and computer version of Solitaire, Susskind stated that law will be embedded into a client’s system (i.e. regulatory compliance work) and the only thing that will be left for a lawyer or firm to contribute is strategy and/or tactics.  At the rate technology is growing, this contribution will be the only component, bespoke or otherwise, a firm will be able to provide unless they take steps to build a better fence at the top of the cliff.

And he had a wealth of great quotes (“”Innovation is when you use technology to do things that were previously not possible”).  We also saw attendees Twittering like crazy and there is a wealth of comment on blogs already.  Some samples blogs and Tweets:

@Afifonlaw: Richard Susskind’s Keynote Address at ABA TECHSHOW 2009 http://tinyurl.com/cq3y4j

@jimcalloway: Richard Susskind’s Keynote Address at ABA #TECHSHOW 2009 was great! More comments on my blog http://tinyurl.com/c988bh

@johnsirman: Over the next 10 years there will be an incremental revolution (complete change) in the way legal services are delivered

@edscanlan“Innovation is when you use technology to do things that were previously not possible”

@johnsirman: Enjoyed the Susskind keynote: The “end of lawyers” is not near, there are new opps for those who innovate and work differently

@nikiblack Susskind: Suggests social network of solos could innovate and take over many areas law firms now handle

@GabeAcevedo  Susskind: the phenomenon of social networking will become what email is to lawyers now.  

And our favorite:

@StephKimbro   Thinking that the attorneys that really need to hear the ideas in Susskind’s speech are not the ones attending

      Note:  Stephanie Kimbro was awarded the Jim Keane Award for excellence in e-lawyering.  She is an attorney and owner of Kimbro Legal Services, a Virtual Law Practice in N.C.

We also covered a number of seminars, three of which were:

Security: Hardening Data in an Age of Cyber Warfare

Speakers focused on how to protect a company’s data as well as client’s information as referenced in the program guide, i.e. use of iron key usb drives.  The two main points were: one should not be asking about how to protect the system but what needs to be done from a minor and/or major failure standpoint; and, audits of external and internal activities should be done on a regular basis.   For the presentation click here.

Searching and Analysis: Are Keywords Really the Key?

The two initial problems facing the trial bar is “over promising” (i.e. discovery can be completed in a month) and “over terrifying” (i.e. the document review portion of case is going to cost $500 million dollars) the court.  This is why courts are looking to and may begin imposing substantive requirements during the meet and confer process.  There has to be a “scaling of the case” to determine what the case truly is about and how much it is actually worth, i.e. the case is worth $60,000 but the discovery cost will be $250,000.  Moreover, simply presenting a 1,000 standard and recycled search term list that generates terabytes of documents will no longer be acceptable.    

To find the true “trial” documents, the speakers mentioned that a universal method or process (i.e. TREC + Expert + Computer system) needs to be developed and properly documented throughout the course of the case in order to eliminate the false positives and/or noise generated by the basic Boolean search.  Both agreed that having a computer on autopilot may be an effective way of removing a custodian’s junk system files but a team of humans with collective as well as alternative search parameters are the way to go.  Unfortunately, the speakers did not go into greater detail.   For the presentation click here.

Review: Techniques and Technologies to Keep Costs Low

This was a presentation by Craig Ball, an attorney with a visibility and prominence in the e-discovery space.  He discussed that anecdotal evidence suggests that approximately 70% of the costs associated with e-discovery lie in attorney review.  His focus was on methods to keeping costs in line with the value of the case to the client, and discussed the effective use of contract attorneys.  We’ll expound on these themes in a later post.

Privileged & Confidential: The Private Parts of E-Discovery

The speaker provided a limited technical analysis of privacy as it applies to the Fourth amendment and how cases help shaped the law and subsequent claims of relief.   Unfortunately she did not discuss the differences between domestic and international privacy issues nor the respective effects on cases today.  This is an important area today especially for contract attorneys doing cross-border project work in the U.S., and project work in Europe.

 We also made the rounds with vendors and will add that in our Day 2 post.

The paradigm-shift

Almost 7,000 lawyers have been laid off in the first two months of this year.  And all are not yet accounted for.  In today’s New York Times Adam Cohn dissects the paradigm-shifting changes taking place in the legal profession.  Noting the massive layoffs and venerable firm closures, Cohen suggested that these events are a harbinger of reduction in associate compensation, alteration of billing structure, flat lining of law school tuition, and changes in law school curriculum  (for full article click here)

These jobs aren’t coming back.  This dynamic has proved true in past recessions as well, with fading industries pushed to the brink during downturns before others emerged to create jobs when economic growth inevitably resumed. Why should it be any different for the law industry?  But with job losses so enormous over such a short period of time, the latest crisis challenges the traditional American response to hard times.  And the next decade was always going to be difficult.  As retirement beckons for the middle-aged “bulge” in many national populations, governments have been facing an expensive demographic transformation.  The economic crisis makes the outlook only worse.

This paradigm-shift has been expertly examined by Richard Susskind in his book The End of Lawyers?: Rethinking the Nature of Legal Services who we profiled in an earlier post when we examined the changing legal landscape (click here).   He was the keynote speaker today at the ABA TechShow in Chicago and we’ll have a report later in the day on his speech ( click here).

And nobody has chronicled and analyzed this upheaval in the legal industry better than Jordan Furlong on his blog Law 21  (click here)  and David Lat on his blog Above the Law (click here).  

So where does that leave the contract attorney industry?

The contract attorney market – in brief

We’ll get into specifics shortly but first some brief observations:

1.  The market has been dead for the last several months.  But in the last few weeks there has been an uptick in contract attorney work (which we are defining as large-scale document reviews and projects, the bread & butter of the contract attorney industry) in every U.S. market except the NYC metro area.  Our measure?  An increase in Posse List job postings and an increase in our representative Posse List members whom we poll telling us “I am getting calls from agencies again.”      

2.  In several earlier posts (here and here) we noted how 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.  A law firm or client’s desire to simply seek lower cost alternatives has led to a growing development of “farmshoring” or “onshoring” by staffing projects in preferred U.S. locales. 

[Note:  we caught a lot of flack for our use of the term "farmshore" sourcing.  It has long been used by the IT industry which has been engaged in offshoring/outsourcing/farmshoring for over 20 years.   For just one site of many with the reference click here.  It is also called "rural sourcing".  It is the placement of IT jobs/work in low-cost regions of the service recipient's country.    The legal outsourcing industry is very, very late to the game of outsourcing in general. It has simply picked up most of the structure and vernacular long used by the IT and manufacturing outsourcing industries.  Legal outsourcing dates to about 1995 (the first significant project in India) but the trend did not really pick up until 2000.  We intend to post our "history of legal outsourcing" later this spring to give you a better idea of how the pieces came together and contract attorney jobs were lost.] 

3.  We normally see a surge in Posse List membership in February/March and July/August which coincides with the bar exams as many attorneys seek temporary work pending their bar results.  The last two months have seen a greater surge and much of this is due, we think, to the lay-offs at BigLaw.  Many new members have described themselves as “recently laid-off” or have attached resumes, and many have also mentioned a change in their attitude about the “stigma” associated with contract work.  Gabes Guide covered “the stigma issue” in a series of recent articles (click here). 

4.   There are English language projects out there but so far the majority continue to be foreign language because of the steady flow of IP litigations, FCPA cases and cross-border civil litigations.  Over the last few months we have posted many more projects on our Mid-West, Far West and Southwest listervs (click here for all of our listservs) than we have on the DC Metro and NYC Metro listservs — the traditional contract attorney work centers.  But D.C. is picking up for reasons we describe below.

5.  What is happening in DC and NYC is probably emblematic of what is happening across the entire U.S. contract attorney market. Based on conversations we have had with law firms, staffing agencies and e-discovery companies: 

    a.  Most agencies have enough people on their internal rosters so they do not need to go to The Posse List, Monster.com, etc. They turn to their favorites (their best reviewers, steady billers, the “non drama queens”, etc.) and when they need extras they get a bit pickier.  Law firms tell us they see many of the same names on project after project although we are not sure how that impacts conflicts.

    b.  Law firms seem to be setting more precise qualifications (told to us by both law firms and agencies) and often ask for experience in a particular kind of case or in several subject areas.  They often set a floor:  minimum of 3 years of doc review experience, or even 5 years in some cases. 

    c.   Agencies’ profit margins are being slashed and we keep hearing about bids that are lost because someone else bid a price well below “market levels” — and “market level” is a pretty loose term given the spread of hourly rates (see below).  Law firms are allowing counter-offers and late bidding in many cases.

     d.  The technology is getting better (we covered that here)  and project teams are getting smaller in many cases.  A few law firms told us they are dealing with smaller litigation budgets,  the “lopping off” of potential litigation issues that law firms and clients were initially willing to examine, and assumptions that early case assessment will find most of what they need to focus on.   [NOTE: Early case assessment, the new technology,  etc. will be covered in later postings via our link-ups with Orange Technologies, ONSITE3, Fios, Merrill Brinker and other technology vendors].

    e.  Gridlock in law firm and corporate decision making.  For instance, based on chats with several DC agencies/e-discovery companies, law firms have issued at least 7 RFPs (request for proposal) out to the DC market and most are “on hold” and we suspect a multitude of agencies and e-discovery companies are bidding on each.

6.  The firms staying busy during this downturn are focused on the “still hot” practice areas such as litigation, intellectual property and bankruptcy.  And we have had significant feedback that mid-sized firms are taking advantage of clients’ desire for lower rates and alternative billing by opening offices in other cities to meet the ever-growing demand.

7.   While the e-discovery hiring outlook remains strong for 2009 (click here) the e-discovery landscape is changing.  It consists of pure-play e-discovery software vendors (like Kazeon, Autonomy, Guidance etc.),  legal service providers (staffing agencies and companies like FTI and ONSITE3),  hosting service providers and law firms.  All of these entities sell their product and services to corporations.   Increasingly, we have seen a trend wherein corporations are starting to adopt e-discovery in-house for reasons of cost, risk management and information control.  The current economic climate is aggravating the situation.  And they are starting to eat each other.  Atttenex was bought by FTI for a relatively small amount for its Patterns product offering, Stratify was absorbed by Iron Mountain, MetaLINCS by Seagate, Discovery Mining by Interwoven, Applied Discovery by LexisNexis and the list continues to grow.

So let’s look at a few selected contract attorney markets based on feedback from a large number of Posse List members in each of those markets.    

The D.C. Market and Federal Government Work

As we have all seen in the media, the various administration stimulus packages will increase government hiring, full-time and part-time.    So first, let’s take a quick look at the full-time job market.

The federal government will need to hire an additional 200,000 workers over the next three years as a result of President Obama’s federal stimulus plan and additional spending included in his budget plan.  That may sound like a lot of jobs, but it’s just slightly less than half of the 384,000 additional employees Uncle Sam already needed to pick up between 2009 and 2012 just to replace existing federal employees expected to leave their jobs.  That 384,000 is a projection for retirements, voluntary separations, reductions in force and a few folks who will die on the job.  [We get our information from the Partnership for Public Service, a Washington, DC, advocacy group working to advance public-sector careers, which tracks all this stuff].

With a total of nearly 600,000 openings over the next three years (and an estimated 12,000 legal jobs), what options could there be for you?

About 85 percent of federal jobs are located outside Washington, DC. But, since many stimulus-related jobs involve command, control, tracking or oversight, a sizable proportion — up to 22 percent – will be located in the District of Columbia itself.

And who’s hiring?

The federal government currently employs 1.9 million civilians — about the same number it did during the Kennedy administration. Gerald Ford, Jimmy Carter, George H.W. Bush and Bill Clinton downsized the federal bureaucracy, while Ronald Reagan and George W. Bush increased it.

Some of this administration’s 200,000 extra workers will be added thanks to changing priorities. For example, President Obama’s 2010 budget increases funding for the Social Security Administration (SSA), so it can hire additional employees to work through a backlog of cases. The agency will hire more than 5,000 people by September 2009.  These include front-line positions in the local field offices and Teleservice Centers as well as legal support positions in our hearing offices.

Another budget priority — better care for veterans — resulted in a $25 billion increase for the Department of Veterans Affairs.  A good part of that will go into hiring more medical and health professionals in the VA.

Jacque Simon, public policy director for the American Federation of Government Employees, says agencies expected to add staff due directly to the stimulus include the Environmental Protection Agency; the Department of Defense; the Food and Drug Administration; the Border Patrol; the Small Business Administration; the departments of Labor, Education, Agriculture and Housing and Urban Development; and the National Science Foundation.

Many agencies are still toting up the numbers. The Environmental Protection Agency estimates it will take tens of thousands of contractors and employees to handle clean up, assessments, design and monitoring of the projects in the areas it will target with stimulus money. These areas include Superfund sites, brownfields, leaking underground storage tanks, clean water, drinking water and reducing diesel emissions.

Bring on the Watchdogs  

With so much stimulus money flowing out of Washington, virtually every agency will have to hire additional auditors, attorneys and investigators to handle the fraud that will inevitably follow. In government, those positions are part of the Inspector General’s office within each agency or department.

The Inspectors General are going to be beefing up staff.   The Department of Health & Human Services (www.hhs.gov) for example, has $27 million for increased oversight. In addition, Congress slotted $50 million to create the Recovery Act Transparency and Accountability Board, a group of Inspectors General that will watch over stimulus spending.

Given the tighter regulatory scrutiny of the financial markets, we already heard there will be job openings at Treasury, FDIC, SEC.    But besides Traesury, the FDIC and the SEC, the other players will be the Office of the Comptroller (part of Treasury), the NY State Insurance Department, the Office of Thrift Supervision, the CFTC and OFHEO.    We will have a lot more on this in a later posting (we have a lot to cover) but right now do yourself a favor and get your cover letter/resume into:  http://www.ustreas.gov/initiatives/eesa/jobs.shtml

For while Treasury is settling nicely into its new digs (click here)  we know that at least 75 Posse List members have picked up jobs in the TARP program although they are spread out over town.

The Government Accountability Office started hiring 100+ people familiar with government auditing.  We don’t have a web link for your yet but we’ll find one.  These jobs will be tough:  prior federal government auditing experience is great, but it’s not the only way to qualify for these positions.  If they’ve done any kind of state or government auditing, or you’ve audited public entities or nonprofits, that would be qualifying experience.

Focus on the Mission

As we have discussed in previous posts, if a federal job is your best career move, don’t look for a stimulus job — look for a government job.  Look at who’s got a job to fill and which agencies have a mission that you’re interested in.  Gather career information by visiting the official federal government hiring site as well as the individual agency Web sites.  And keep plugging.  Posse List members have experienced wait times between 9 months and 2 years.  But they keep hammering, hammering, hammering. 

And yes, it will be tough.  Example:  in January 2009, after the Federal Bureau of Investigation said it wanted to hire 2,100 professional staffers, it received 230,000 applications.

Ok, let’s discuss doc reviews, 8(a) jobs, etc.

 While the direct-hire Federal jobs described above are greasing the market, the D.C. contract attorney market is also seeing an uptick due to:

1.  The slow manifestation of financial melt-down/credit crisis litigation

2. More agencies/e-discovery/Federal contractors getting work/bidding on work that is direct-to-the-government

3.  Regular work trickling into the market

The FannieMae and FreddieMac investigations launched last fall (click here) are now in the data collection stage and e-discovery companies (not staffing agencies) have been selected for the processing, and the actual document review.  We can’t tell you which companies … yet … because we signed NDAs with the agreement that The Posse List will post the first announcement when they staff.  Each of these investigations have 125+ custodians and a few TBs of data so we expect the processing to go for awhile.

Plus, the anticipated New Century/KPMG law suit filed yesterday.  KPMG is being sued for $1bn by the liquidators of New Century, the collapsed subprime lender, and is the first big case against an auditor arising from the current financial crisis.  Almost all of the KPMG doc reviews have been done in D.C. and we assume the pattern will prevail.  Well, assuming KPMG does intend to “rigorously defend” the suit as its press release said.

Plus, the start of some financial melt-down/credit crisis litigation (slowly) hitting the D.C. market (and other markets) as we have reported in the past, which we have been following courtesy of our “tracker” colleague Kevin Lacroix  (click here).   

And every survey/grid we have read shows the surge in securities litigation.   As examples click here, here, and here.

But it also important to note that getting to doc review can be a slow grind (click here).

So what has happened in D.C. is that after a significant drop-off, contract work has increased and remained steady for a number of agencies such as American Legal Search, Hudson Legal, JurisStaff, Kelly Law Registry, Law Resources, Legal Placements, and Lexolution.  But these agencies have not had the need to post regularly on The Posse List,  Monster.com, Craigs List, etc. because they can draw on their internal lists of contract attorneys. However they continue to look for qualified candidates.

In addition several staffing agencies are getting Federal staffing contracts because they are specially qualified by being 8(a) certified companies (these are firms eligible to get “first preference” on Federal contract because they are owned and operated by socially and economically disadvantaged individuals), or they are certified woman-owned, GSA approved staffing firms (such as Pat Taylor & Associates).    D.C. agency contact information can be found on our home page under Staffing Agencies.

 And how is the D.C. market doing right now?   The rate band has been $30-35 per hour, with many of the most recent projects (last 45 days) at $32 or $33.   D.C. Posse List members report a total of 21 projects, 15 being English language review and 8 being all or part foreign language review.  Based on this information, we guesstimate about 1,200 D.C. Posse List members are working.

Now, onto other markets:

ARIZONA

 Riley Carlock & Applewhite may be the largest user of contract attorneys in Arizona although there are many others.  In 2006-7, the hourly rate in Arizona (mostly Phoenix) was $40 but that has dropped to a range of $30-34.  Most projects are long term litigations although there are several short-term projects.

 Based on Posse List members, there are 6 projects spread out in Flagstaff, Phoenix and Scottsdale.   None are foreign language. 

CHICAGO

Chicago has seen an uptick in work.   Chicago projects seem to be running a band of $28-35 per hour.   Of the 14 projects reported, 8 were capped at 40 hours per week.  But all 14 of the projects have run 4+ months or longer, with 4 at 1+ years.

Chicago also seems to have more flat-rate (no overtime) projects than anywhere else in the country although we know NYC also has a high percentage.   Only 3 projects reported by Posse List members had paid overtime although they allowed 50 hour weeks.

Also, Posse List members (and Chicago agencies) tell us NYC agencies are moving into Chicago and low-balling RFPs to get business.  In one case a project moved from $32, to $30 to $28.

DALLAS/HOUSTON

We’ve paired these markets although Dallas is not as busy as Houston.  But most of the projects share similar traits.  Of the 14 projects in Dallas/Houston the work:

• a. is IP related or energy related, with a number of bankruptcy doc reviews
• b. has been long-term (8 of the projects reported have gone 1 year+)
• c. has paid $35 an hour
• d. has overtime

Dallas, on the whole, has maintained a $35 hourly rate but most of the projects are capped at 40 hours unlike Houston.  But many are long-term (4 now going over 1-1/2 years).

Houston has a larger share of foreign language projects and one project (part requires German fluency required) has a 50 hour min/75 hour max with most contractors doing 60 hours.   The German piece of the project started in June 2008 and is expected to run through June 2009.

Legal People has a long-running document review in Houston (started in September 2008) with an hourly rate of $35, unlimited hours.  But everything over 40 hours is still paid at straight time.   The minimum hourly requirement is 50 per week and the project is expected to last until at least June 2009.

We have also seen many more projects allowing “independent contractor” status (1099) in Texas than elsewhere.   We have several Posse List members on projects as independent contractors at $40/hour, some at 40 hours per week and a few at unlimited hours. 

One element keeping contract attorneys employed in Texas (and the other energy states of Colorado and Oklahoma) is that many U.S. energy producers are being forced into bankruptcy or asset sales by banks, which are using annual reviews of company debt to cut permittable levels below existing borrowings. 

As one law firm explained, producers have few choices in terms of raising new finance when confronted with repaying debt immediately, with many unwilling to tap equity markets, given the dilutive effect of issuing stock at today’s low prices and the inability of finding buyers for new equity.   In addition, the severe drop in commodity prices has slashed the value of their assets.

“This is forcing companies to sell assets they don’t want to sell or to sell whole companies.  Or has led to complex Chapter 11 bankruptcy transactions.  These lead to doc reviews.”

 NEW MEXICO

 A large number of Posse List members recently wound up two long-term (14 months plus) litigations.  These were small: 8-10 contractors each.

The terms were similar:  40 hours per week (overtime not permitted) and the pay was $32/hour for contractors at the beginning of the project and reduced to $28/hour for people hired at the end of the project. 

 Posse List members reported 6 other projects, all short-term (ranging 2 weeks to 2 monhs) at $32 per hour, no overtime.

 These were the only projects reported by Posse List members.  None are foreign language.

OHIO

There has been a smorgasbord of projects throughout Ohio (mostly in Cleveland) due to the presence of Jones Day and due to the document review centers run by Hudson Legal, Kelly Law Registry, Lumen Legal, etc.

Rates have been all over the ballpark but Posse List members report:

1.  Approximately 12 projects

2.  $21/25 hour

3. 40 hour maximum

PHILADELPHIA

The best blog we have found that covers Philadelphia is Black Sheep of Philly Contract Attorneys and they recently posted a complete run down of Philadelphia projects which you can access by clicking here.   It is an extremely detailed list and rather than repeat it here just click above.

Legal process off-shoring (the Indian LPO market)

We will address the LPO market in a subsequent  posting, but just a few points.

 About 43 members of the US Congress have written to financial services firm JP Morgan Chase, asking it to explain its plans to increase outsourcing to India.  The media has reported that JP Morgan plans to increase outsourcing to India by 25%. The financial services firm has been the recipient of $25-billion from the U.S. government’s Troubled Assets Relief Program (TARP).  The outsourcing jobs are both legal and financial.   In a letter addressed to JP Morgan Chase CEO Jamie Dimon, the Congress members asked: “How should these American workers, many of them your consumers, be expected to have hope for a better future when the very companies they contributed to through TARP outsource the jobs they desperately need?”    A JP Morgan Chase spokesperson in India refused to comment on the matter.

We spoke to several Posse List members in India who are project managers (all U.S. attorneys) and they said the bulk of what they have is FCPA review and securities litigation review (credit crisis related).  Three of them (who have been there for 1+ years) say “the stuff coming this way is increasingly complex”.  

We also spoke to Posse List members who are EU barred and they were working on IP litigation and IP prosecutions.

And issues discussed by all our Indian contacts:

1.  The number of U.S. attorneys going to India for work is increasing. 

2.  There has been a move by Indian LPOs to offer CLE programs (click here).

3.  The legal process outsourcing industry will consolidate (click here).

 Thinking “outside the box” 

And in answer to a number of questions about several of our “nontraditional postings”.   We will continue to post non-attorney positions since many Posse List members are trying to think “outside the box” and find work outside of normal contract attorney work but work that fits their experience profile.   For instance, this is why we post a fair amount of contract manager/administrator/negotiator positions on all the lists, many of which stipulate ”attorney preferred” although the position is not a lawyer job per se.    We are just trying to assist in a difficult market.

THIS WEEKEND,  PART 2:  more on Federal government work, some info on freelance work and going solo, and the (growing) work in Europe.

Last night’s and this morning’s lead story in the legal media:  800 law firm jobs lost in one day.  And there will be more firings to come (click here for a sample).    For the contract attorney market there is a little gloating and perhaps a little schadenfreude.  Especially in the switch by AmLaw 200 advisers who first spoke about “the stigma of contract attorney work” and who have now changed their tune to “well, maybe temping ain’t half bad” as so ably chronicled by Gabe Acevedo in his blog Gabes Guide (click here).

We’re a bit bemused ourselves by the sudden surge in Posse List membership, a large percentage of that increase being ex-AmLaw 200 folks based on the resumes we are receiving.  How much of a threat they will be (will agencies want them?  will law firm want them?) remains to be seen.  A bigger threat is probably going to come from the associates who are still at firms and are using document review as a way to maintain their billable hour requirements.   Paralegals on The Posse List have told us that is happening and that firms have “altered the value” (reduced the bill rate?) to clients. 

The bigger threat to contract attorneys continues to be legal process outsourcing (read: India, mostly).   It’s been going on, really, since 1995.  It took off like a shot in 2001 but seems to have ramped up in the last 5-6 months and was recently stamped “ok” by the ABA opinion along with the 4 collateral state bar opinions, although ABA journal articles from 2005 and 2006 touted off-shoring as a necessary and integral part of law firm management.

Of major recent interest is the new Limited Liability Partnership Act in India (passed last month) which paves the way for foreign law firms to set up shop in India (click here and here).    But it’s not so much the “setting up shop” aspect that intrigues us.  Looking beyond that, it will allow the big UK and US law firms that have been pushing the Indian authorities to change to set-up internal LPO units.   This is not lost on the more savvy Indian LPOs who are scrambling to be in a position to set-up turn-key operations for law firms.   We think an element of off-shore outsourcing is here to stay despite the expected (hopeful?) economic recovery,  just as the traditional document review centers of DC and NYC have lost business to the less expensive venues of Chicago, Pittsburgh, Hosuton/San Antonio and the Carolinas . 

But India is beyond the scope of this posting and will be addressed in a much more detailed posting next week as we attempt to provide the history, scope and future of that aspect of outsourcing (we’ll ignore the growing LPO industries in Egypt, the Philippines and South Africa for the moment).

And perhaps the reality is that a client may not really want to send its work overseas, that these outsourcing discussions really highlight a client’s desire to simply seek lower cost alternatives, including sending work to smaller firms and “farmshoring” —- working with law firms in smaller metropolitan areas where billable rates are lower but quality is just as high, or going with niche firms.

But is all this just due to a brutal economic patch?  Will things “return to normal” and will AmLaw 200  alums return to their happy lairs?  Is there a tectonic shift going on which is now only apparent because of the economic maelstrom?  And what does this all mean for the contract attorney market?  What are the trends?

One of the immediate trends is one we stated in our post-LegalTech review which was that vendors expect a shakedown of the EDD market in the next 12-to-24 months, leaving a handful of big players as opposed to the hordes filling the booths this year. With so many vendors, it’s clear the competition is fierce.  Gartner recently published a detailed market study on the entire e-discovery software/technology industry outlining this shakeout (click here)  

For contract attorneys, it means increasingly streamlined reviews because the level of competition among the software providers is forcing them to spend a lot of time and money into creating products that make them stand out from the rest and ultimately produce more accurate and efficient means of conducting searches as well as more tools to monitor and control costs (including performance metrics).

That, coupled with the “meet and confer” philosophy we discussed in an earlier posting  puts pressure on the parties to devise a very focused (and hence shorter) discovery process.

A second immediate trend is that covered by Charles Skamser in this blog The Ediscovery Paradigm Shift which discusses, amongst other things, the transformation that is going on within the legal market in regards to the paradigm shift of e-discovery being brought in-house by corporations and their use of EDDs to build in-house centers, as evidenced lately by the Kazeon/Suburu match up (click here).

This parallels our LegalTech discussions with in-house counsel who said more legal work is staying inside corporate legal departments and moving away from law firms.  As we profiled in a post a few weeks ago, ACC members have reported a much larger use of contract attorneys in-house, especially in doc reviews and compliance projects.  EDDs have probably made more headway in this than staffing agencies, especially in the early case assessment software area and the “preventive software” area such as data mapping programs.  As several in-house corporate lawyers told us “we’re the front line in e-discovery” and “we need to be in more control, not outside counsel”.   They said “we need to get our digital houses in order” with a dedicated e-discovery coordinator in place.  Well, that’s the mission anyway. 

But doesn’t it appear there really is a tectonic shift going on which is now only apparent because of the economic maelstrom?  We believe there is and no one captures this better than Richard Susskind in his recent book  The End of Lawyers?: Rethinking the Nature of Legal Services  which relates how technology, collaboration, globalization, and other forces are changing the fundamental rules by which legal services are bought and sold.  It’s a sequel to his 1996 book The Future of Law which was right on target in it’s predictions on how the law would be transformed by IT.

And no one covers this tectonic shift better than Jordan Furlong in his blog Law21  which are his “dispatches from a legal profession on the brink”.  Jordon recently reviewed the Susskind book and he’s given us permission to post an excerpt:

The book is characterized by several key observations about how the legal marketplace is being transformed, with three especially significant ones:

1. The identification of an evolving and fluid spectrum of legal services categories: bespoke (one-off, customized or tailored), standardized (drawing upon precedents, process or previous work), systematized (reduced and applied to automated systems), packaged (systematized services exported to clients) and commoditized (packaged services so commonplace as to have little or no market value). Most lawyers insist that their services cluster around the left-hand end of this spectrum; Richard convincingly argues that movement to the right is inevitable for many types of legal services, with profound implications for lawyers’ business models.

2. The decomposition of legal tasks into component parts that can be delegated to various sources, few of them actual law firm lawyers. Twelve types of destinations for this multi-sourcing (reminiscent of unbundling) are identified: in-sourcing, de-lawyering, relocating, offshoring, outsourcing, subcontracting, co-sourcing, leasing, home-sourcing, open-sourcing, computerizing and no-sourcing, each of which is explained in more illuminating detail. Despite this multiplicity of legal work performers, an overarching entity responsible for managing the work must exist, and all the systems and processes involved must work together seamlessly.

3.  In the context of astonishingly deep and rapid technological advances, the emergence of no fewer than ten disruptive (in the Clayton Christensen sense) legal technologies: automated document assembly, relentless connectivity, the electronic legal marketplace, e-learning, online legal guidance, legal open-sourcing, closed legal communities, workflow and project management, embedded legal knowledge, and online dispute resolution. These developments offer tremendous opportunity for more efficient and effective legal services delivery; but they also represent major threats to various aspects of the traditional law firm business model.

For his full review click here.   You can also follow Jordan on Twitter by clicking here.  Jordan also recommends an equally good read,  Bruce Marcus on the massive upheaval in legal practice which you can access here.

There is a lot said in that three paragraph summary and the actual book goes into all the detail.    But it is all driven by two forces:  a market pull towards the commoditization of legal services; and the pervasive development and uptake of new and disruptive legal technologies.

Oh, and our jobs.  The problem is that everyone else has the same problems right now so there’s a need for a personal constructive approach.

And one thing happening is that many laid-off lawyers (and contract atttoneys) are shaking off the “inner hysteria” (Susan Cartier Liebel’s phrase; see below) and going solo, going independent.  See links here, here and here.

And what about being an independent contract attorney?  Possible?  Of course it is.  Hard work?  Of course it is.  But we provide just two examples of how it can be done and how successful you can be:  Kimberly Alderman at Lawyer On! The Contract Attorney’s Blog  and Lisa Solomon at  Legal Research and Writing.

And building a solo practice?  Then start with Susan Cartier Liebel and her blog Building a Solo Practice and Carolyn Elefant at MyShingle.   And check out Rex Gradeless at Social Media Law Student.

And no, we aren’t getting fees for the honorable mentions above.  We are trying to assist the Posse List membership as best we can.  You now number 13,000+ and include lawyers, law students, law firms, EDDs, legal organizations, etc.  Many of you have asked us to cover freelance and “going solo” solo opportunities .

Well, we can’t replicate all the phenomenal sites and bloggers out there that cover freelance, independent contract attorney opportunities and going solo opportunities so what we’ll attempt to do is point you the right direction.  We expect to launch our new site within the next 10 days (Lord willing and the crik don’t rise) and will incorporate a potpourri of links.  And we’ll continue our distribution of news on document review work projects, Federal government projects and the seeming endless stream of foreign language projects in the U.S. and Europe.

In the end, as Jordan Furlong and I believe, the day is coming when the appellation “contract attorney” is a redundancy.  Or as Jordan picks up the theme:  “I can see more and more ‘free agent’ lawyers working when they need/want to, coming together and dispersing on a project-by-project basis, and generally turning on its head the presumption that most lawyers work in law firms”.

Stay tuned.