A recent malpractice suit filed by a client against McDermott Will & Emery places the spotlight on the challenges posed to firms trying to more efficiently process work that doesn’t require high-powered lawyering.
The client, J-M Manufacturing, the world’s largest plastic pipe manufacturer, claims that McDermott failed to adequately supervise contract attorneys, which resulted in 3900 documents being disclosed that were "privileged or irrelevant." J-M also contends that plaintiffs in its suit refuse to return these documents, handed over to them by the U.S. Attorney’s office in Los Angeles.
J-M alleges that McDermott "participated in the hiring" of the contract attorneys from third party vendor Hudson Legal and "also assisted in their training." In addition to hiring contract attorneys, according to a J-M source, McDermott relied on two third-party "electronic discovery" vendors to automatically separate out all privileged documents with a search term filter. It is not apparent how much these services contributed to the misidentified documents.
J-M’s points out that the contract lawyers were paid a fraction of what regular associates would be paid, implying that they are inferior in quality to the firm’s regular associates, and also that the firm makes a higher profit on these lawyers than on their regular associates. McDermott’s own attorneys billed J-M at "rates as high as $925 an hour," J-M alleged, while the law firm paid the rate of $61 an hour to staffing firm Hudson Legal, without specifying how much, in turn, the contract attorneys were paid. The initial claim of "improper markup" was dropped in an amended complaint.
Of course, the way to meet the demands of clients to make this type of routine service more cost-effective is indeed to find lawyers and other professionals who can adequately do the work at a much lower cost structure. Apparently J-M thinks the cost-cutting aspect prevailed over the necessary level of legal adequacy and, to add insult to injury, the firm made a sizeable profit.
Temporary legal staffing in the U.S. is projected to increase by 25% cumulatively over the next two years, according to the most recent estimate by Staffing Industry Analysts, a research group. The outsourcing/temporary hire industry is often the bottom-of-the-barrel in terms of credentialed lawyers, and their work conditions are often compared to forced labor conditions, with production targets and strict search protocols instead of any independent analysis. In addition, there is in fact no industry standard for what a review should accomplish, with comparative studies showing wildly different results among different "ad hominen" and tech reviews. See commentaries to the ABA Journal article and WSJ article for on-the-ground examples.
This case challenges all law firms engaged in such hiring or considering it to have a thorough understanding of who to hire, what personal traits and skills are best suited for this work, how to manage the work environment, what kinds of parameters and incentives to put in place, how to instruct the workers and how to supervise them (both identifying supervisors and methods of supervision) for the best results. Few firms have gone through the work of answering these questions for their clients. The ones that do will reap a more solid professional reputation and a more trusting clientele. And those profits to boot.