Armies of Expensive Lawyers, Replaced by Cheaper Software

[slim04]

Originally Posted by loloroj

No, the reason there is no Big 8 anymore is because they don't need the legions of middle/upper managers that the audit firms use to provide. ....

If anyone is interested, the main reasons for the accounting mergers were the increasing globalization of business and its largest, most profitable clients. Plus, the prominence of consulting work, in particular, large scale consulting projects that involved the implementation of ERP software like Oracle and SAP. What happened was that the smallest firms were always paranoid that they were going to fall behind.

In the early nineties, it was starting to become the Big 4 plus the others. The four largest firms (AA, KPMG, C&L, and PW) had way more comprehensive global presence than the four smallest firms. The smallest firms either had weaknesses in asia or europe and increasingly were not even making the first round in open bids for global 1000 type companies. Plus, the two smallest were having financial difficulty. So E&W was able to pick up AY and DHS merged with TR to become E&Y and D&T without much difficulty.

In the late 1990's, there was a concern that AA and E&Y were becoming the Big 2 because of their extremely profitable and growing consulting business. The two smallest firms, C&L and PW merged to become the largest firm. They also had concerns that regulators would only allow one more mega merger, so they better do it before anyone else did.

The newest smallest firm, D&T, then became paranoid and tried to merge with either AA, E&Y, and KPMG. AA & KPMG said no thanks. E&Y agreed but disputes between the firms and trouble with regulators scorched it.

So now it was PwC, AA, E&Y, KPMG, and D&T, with D&T having the smallest consulting business.

Then AA imploded and Sarbanes Oxley changed the accounting industry causing it to divest its consulting businesses.

We now have a Big 4, with D&T the largest after absorbing the majority of AA, then PwC, E&Y, and KPMG.

So the mergers were the result of an extremely competitive environment where the smallest firms always thought that were going to be also rans, but if they merged they would become industry leaders. During the merger era, the firms never downsized except for back office or duplicative administrative positions and were very profitable.

[slim04]

As for the lawyers, the type of work the OP is talking about is tedius discovey work performed in large scale litigation. That kind of work is mostly outsourced to contract attorneys and the law firms have never been able to charge premium fees for those services. So if the law firms switch to software or offshore, it isn't really going to affect their business. They make most of their money from fees charged by partners and associates for real legal work, rather than skimming through thousands of documents for discovery.

That contract work is not a very large part of a legal market and the lawyers that do it were always struggling to get normal legal work anyways.

[Randomstudent]

Originally Posted by slim04

As for the lawyers, the type of work the OP is talking about is tedius discovey work performed in large scale litigation. That kind of work is mostly outsourced to contract attorneys and the law firms have never been able to charge premium fees for those services. So if the law firms switch to software or offshore, it isn't really going to affect their business. They make most of their money from fees charged by partners and associates for real legal work, rather than skimming through thousands of documents for discovery.

That contract work is not a very large part of a legal market and the lawyers that do it were always struggling to get normal legal work anyways.

Exactly. There is a lot more to law then discovery. This is essentially getting rid of legal jobs at the very bottom rung aka doc review which was going to India anyway.

[Ericorthwaite]

I am a proponent of Ralph Losey's view, in the main. However, the use of technology in litigation does not happen in isolation. As the digitization of analogue instruments and recording methodologies slashed the cost, time and expense of recording music. So to was similar technology used to distribute and sell the finished product. The recorded music industry as a consequence has grown, all but, profitless. I believe we'll see a similar technological trajectory in civil litigation.

Key word & conceptual analysis is broadly accepted for that singular and costly "event", which we'll call civil litigation. However large companies are not tolerating the exponential accumulation of ever larger data stores. Such companies now are automatically enforcing vigorous data retention policies on email and user generated data. Managing, classifying and sorting, shared worksites & WIKIs etc. Thereby, automatically purging and controlling mass amounts of data through use of similar keyword and conceptual analysis technology.

In effect, such companies are not waiting for the plaintiffs bar to attack their bloated and unwieldly information systems but instead are dealing with the data, and exposures to risk, at source. There are not enough stages to employ the out of work session musicians. Will there be enough court rooms to absorb our underutilized attorneys.