'Old Habits Die Hard': Law Firms Struggle to Modernize E-Discovery Operations
The 2018 Law Firm Benchmarking Report found that law firms are under pressure to offer more cost-effective e-discovery services. But it's an open question whether firms can deliver.
August 21, 2018 at 08:00 AM
4 minute read
While law firms are streamlining their operations to respond to client demand for more cost-effective e-discovery services, most still have a long way to go to survive in a price-conscious market, according to the 2018 Law Firm Benchmarking Report by Exterro. The report was a survey of 103 law firm employees who played a role in their firm's e-discovery operations.
The survey found that 48 percent of surveyed law firms have legal project management processes that are “defined,” “structured” or “optimized,” up from 44 percent in 2017.
Bill Piwonka, chief marketing officer at Exterro Inc., said the increase was “definitely progress” toward the legal industry becoming more efficient, but he wasn't sure if this increase was indicative of a larger trend. “This is an improvement, but do we ever know the inflection point until we have hindsight? Is this the tipping point where next year we are going to see a broader [increase]?”
Still, Piwonka noted that law firms have little choice but to change as a matter of survival. Corporations “are looking to get more value from their law firms,” he said, “and one way law firms can offer more value is to become more efficient and productive.”
Many law firms are acutely aware of a tougher e-discovery market. Almost two-thirds (62 percent) said their clients are requesting improved e-discovery processes and technology, while 50 percent noted clients expect to pay less for e-discovery services. An additional 51 percent of firms said there is market pressure to become more efficient.
Many, however, are slow to respond to these demands. While 59 percent of law firms use e-discovery software in-house, for instance, only a quarter use collaboration and legal project matter management software, which can bring more efficiencies to e-discovery operations.
What's more, 73 percent of surveyed firms said their e-discovery services are charged in billable hours. Only 15 percent said they offer alternative free arrangements, while 12 percent offer fixed fees, which can be a less expensive option for cost-conscious clients.
When asked why firms aren't better responding to client pressure for cost-effective e-discovery services, Piwonka noted, “my own personal belief is that old habits die hard.”
“It will be interesting to see how this continues to evolve over time, but the pressure of the market is going to remain,” he said.
Piwonka added that law firms who leverage technology and optimize processes “are going to emerge the winners, because they are going to deliver the services at the prices clients want.”
In addition to lagging behind in streamlining e-discovery operations, law firms are also slow to modernize how they communicate with their clients, the survey found. A majority, 78 percent, of surveyed firms said they only communicate with clients on an e-discovery project status as needed, while 66 percent said they have informal client conversations about projects, and 60 percent said they have formal documentation regarding project updates.
Only around one-third (32 percent) of firms said they share technology platforms with their clients to keep them informed of e-discovery projects.
Piwonka again noted that law firms are having trouble changing their old habits, despite the fact that “they can become so much more effective were they [have] to adopt more collaboration and shared technology. Their conversations could be more substantive and about business problems if the client is already aware of project statuses and the nuts and bolts of the working relationship.”
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