Tuesday, August 14, 2012

Former industrial factory mill converted to onshore legal services center

Further to yesterday's post about Michael Trotter's forthcoming book predicting major change coming to BigLaw due to competitive pressures that are driving down the cost of legal services comes this story from the Pittsburgh Post-Gazette about a BigLaw firm that has converted a former West Virginia factory mill into an outsource legal services center staffed by contract attorneys. (Hat tip to Elie Mystal at ATL). Here's how the operation is described by the news blog:

[San Francisco's] Orrick estimates the Wheeling [West Virginia] facility generates cost savings of $10 million to $15 million annually, primarily as a result of lower salaries and real estate expenses than it would pay in San Francisco or other major metropolitan cities.

Another cost-reduction step taken in 2009 was creation of a program for law school graduates who are on a non-partner track at the firm. Because Orrick is not licensed to practice law in West Virginia, the 17 career associates handle duties such as witness preparation, memos and drafts for associates and partners throughout the firm. Another 26 attorneys work in the document review division . . . .

Orrick's managing partner says that creating the West Virginia facility is "one of the smartest decisions we've ever made for the firm and our clients."  The Post-Gazette article goes on to note that Pittsburgh's Reed Smith has done similarly by opening its own outsource center staffed by attorneys at less than half the going rate for BigLaw associates. "Instead of hiring a $130,000-a-year new lawyer, we get these people for less than half that number" a firm spokesman told the news blog.

Check out Elie's thoughts about what this tells about future job prospects with BigLaw by clicking here for Above The Law's coverage.



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