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Friday, May 25, 2012

Is this industry dying?

Sure, recently I've posted a little bit about stuff that has nothing to do with the world of contract attorneys. I never promised I wouldn't do that, so I have no problem on that front. If you have a problem with this, please refer to the title of the blog.

Right now, though, I feel the need to discuss whether the industry in DC even remains viable. There are a lot of reasons to think the answer is no. Let me explain.

A few years back, we were worried that overseas review sites would take document review business away from DC. The truth is, it did -- a lot of projects went to India or the Phillipines, and still do. Nonetheless, that didn't kill the local market. Didn't help, but we hung in there.

Other, cheaper states as sites for projects were the next threat. Ohio, West Virginia and North Carolina were going to take all of our business because they could offer the same benefits as overseas sites with better oversight -- U.S. JD lawyers and lower rates than the DC-New York markets. For clients with a reluctance to trust overseas attorneys (even though all of them would be barred in the U.S.) hiring attorneys in Ohio, North Carolina or West Virginia seemed like a better alternative to hiring attorneys in India. 

While we seem to have survived that trend, as well -- sure, projects are going to cheaper states, but we seem to get enough projects to get by -- it is not at all clear that we will survive the next trend: DC projects with cost-reduction. This is the one that will kill us.

Clients are driving the latest trend, as opposed to document review firms -- or e-discovery firms, as they prefer to call themselves -- and that is not good. When the agencies were driving the cost-cutting, it still meant they were trying to keep the business. Now, the cost-cutting seems to be driven by the clients, the companies buying the service. Because these companies see no benefit in overtime pay (paid by them), they are big-time in favor of more bodies, shorter projects and no overtime. The problem for contract attorneys, of course, is if we can't get overtime, we can't survive. How long will it take for this to blow up in everybody's face?

1 comment:

Fenris said...

No/less OT has been a trend for a while now. There are upward as well as downward pushing factors on rates.

A "more bodies, less OT" policy only works if there's a labor pool to support it. With the cost of living round here going way up, that labor would dry up below a certain threshold.