I had the pleasure to attend The Cowen Group’s (TCG) Leadership Breakfast Series meeting in Atlanta last week. I was expecting the conversation to focus on the impact that Technology Assisted Review (TAR) is having on the legal industry, as the other Q3 breakfasts in the series did. However, the discussion quickly turned its focus away from TAR and toward the emergence of managed services.
There was a consensus among attendees that the increased pressure for corporations to cut costs and “do less with more” is a significant driver for the push toward managed services. By way of example, one participant, an information governance professional in a highly regulated industry, stated that his company has given the directive to cut costs by $3 billion this year. The theory is that managed services, at one point in the meeting termed as the “new big box store of eDiscovery”, will reduce eDiscovery costs by streamlining processes and, thereby, increasing efficiency.
There are a number of law firms currently utilizing a managed services model with their eDiscovery offering, and many more are actively exploring these options. One of the effects of these models is that firms are now competing with outsourced service providers for business, and perhaps more importantly, hard to come by talent.
In addition to cost savings, the attraction to managed services includes:
- Flexibility of service options. For example, demonstrating the “big box store” concept, a corporate consumer can choose which services are managed, versus which services stay in-house with the corporation, versus which services are performed by outside counsel;
- Agility in terms of staffing up and down. Both corporations and law firms that do not have a managed services offering generally do not have the bandwidth to manage the manpower issues as projects expand and contract; and
- Merits counsel can focus on merits rather than the challenges of managing eDiscovery.
At one point during the meeting, a prediction was made that the managed services market will grow by $100 million over the next year. Many of the participants believe that number is conservative. Another prediction was made that we will see a growth of positions in the information governance space. Do you agree with these growth predictions?
The next breakfast event is September 21, 2012, in Minneapolis. If you would like to be considered for attendance and participation in future discussions, please contact TCG Events.