The Growth and Importance of Outsourced E-Discovery: Implications for Big Law and Legal Education

38 Pages Posted: 23 Aug 2013

Date Written: August 22, 2013

Abstract

The legal market is rife with inefficiencies at all levels of practice. Perhaps the most fundamental problems in the marketplace for legal services are informational asymmetries. Information important for lawsuits may not be available for analysis, sometimes by design of the parties involved, and that creates friction in the market. Clients demand greater efficiencies at lower costs, as legal services have become a commodity managers must buy. The creation of E-Discovery was itself an effort to further the efficient operation of the legal services market but that efficiency came at increased cost due to the dramatic increase in documents for review. Efforts to tackle the problem of cost have pushed the providers of E-Discovery to seek out objective metrics to measure value-added to gain advantage over rival firms.

This paper first examines changes in the macroeconomic conditions of the legal services market that predated and helped foster the E-Discovery boom. This paper will examine the concurrent changes to the traditional Big Law firm that created the market for E-Discovery. Next this paper will explore the history and growth of the E-Discovery market. Further, this paper will argue the record of growth along many variables of business success indicates the appetite of the market and the likely continued importance of E-Discovery and other non-traditional avenues of employment within the legal field.

This paper will examine the infancy and growth of one firm in this market space: NEXTRA. We will examine this growth through the lens of so-called Moneyball principles advocated by NEXTRA CEO, Bob Rowe. In Moneyball author Michael Lewis explores how Billy Beane, the Oakland Athletics’ General Manager, used inefficiencies in the marketplace for baseball players to his advantage. The lessons Beane borrowed from other industries to gain advantage over opposing general managers in baseball can also be implemented in legal education and legal practice.

Finally, this paper will suggest legal education refocus some of the 3L curriculum on entrepreneurial opportunities within the law. Evidence suggests traditional legal employment will not support the number of law school graduates currently entering the market. Meanwhile fiscal pressures mount on law schools due to declining overall enrollment. These twin pressures should lead law schools to change focus from “getting a job” to “making a job”.

Keywords: entrepreneur, Moneyball, E-Discovery, outsourcing

JEL Classification: K00, K41

Suggested Citation

Birkel, Chris, The Growth and Importance of Outsourced E-Discovery: Implications for Big Law and Legal Education (August 22, 2013). Available at SSRN: https://ssrn.com/abstract=2314582 or http://dx.doi.org/10.2139/ssrn.2314582

Chris Birkel (Contact Author)

College of Charleston ( email )

Charleston, SC
United States
8439533374 (Phone)

HOME PAGE: http://cofc.edu

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