Economic Crisis and the Protection of the Law

U.S. Recession is not over the impact of the global crisis will further recede American economy into a worse condition. Reported that trading in wall Street trading floor still not too excited for economic improvement. Some predicted the world economy is still recovering.

Economy of the United States will continue to face challenges, the company continues to reduce the number of employees in order to maintain the efficiency of the company's performance, the protection of the company and employees is needed.

With the United States continuing to face severe economic challenges, law firms are slashing costs and reducing headcount to survive. Since January of 2009 law firms have laid off more than 9,900 employees including both attorneys and staff. The flurry of pink slips has been a wake up call to a once recession proff industry.


The legal profession is under a confluence of pressures that are causing law firms to change the way they do business in order to bring more value to their client. Pressures include clients demanding lower legal fees and better results, the unbundling of legal services to reduce costs, alternative to billing by the hour, and the use of process control and technology to help reduce the most expensive costs of litigation.

Companies can no longer afford to pay $250-$500 an hour to white-shoe law firms. One way GC's and CFO's look to cut legal expenses without compromising quality is to turn to smaller boutique firms that deliver specialized, unbundled legal services in a cost effective manner. Small business can
also save additional dollars on legal expenses by asking their outside counsel to outsource routine document review and utilize new technology to manage electronic discovery. Firms that offer key cost saving methods are leveling the playing field for smaller business.

David vs. Goliath
Outsourcing document
review is one of the most efficient ways to significantly decrease the cost of litigation. Law firms traditionally assign junior associates to conduct document review at the rate of $250 per hour, or more, compared to offshore document review which runs approximately $25 per hour. Significant profits are the key reason many law firms do not outsource document review.


Today with terabytes of data from e-mails, texting, computer files and instant messages under scrutiny, document review is now the costliest aspect of litigation. According to KPMG, approximately 58%-90% of legal fees are spent on document review.

A real case "David vs Goliath" story demonstrates the dramatic cost and outcome differences between old style document review and one based on solid process control principles. Several years ago, a small Texas-based software development company, "David" sued "Goliath" one of the largest computer companies for intellectual property and trade secret infringement.