While researching whether his firm should outsource nonlegal e-discovery services, Losey said he talked to a number of other law firms that told him they didn't really make money on their litigation support departments.
"The writing is on the wall. The litigation support departments of law firms are doomed," he said.
Losey admitted many people disagree with his view and argue vendors can't provide the same quality a team within a law firm could. But he called that view naive.
Losey said litigation support people won't be out of jobs, they will just be working with vendors. He predicted the litigation support teams at firms will be spun off as e-discovery vendors. That is essentially what Drinker Biddle did when it converted its litigation support team into the staff of Drinker Discovery Solutions.
Losey said e-discovery is a "booming growth area" with a lot of money to be made on the business side.
"But I think it's going to be made by businesses, not law firms," Losey said.
That doesn't mean law firms will be completely sidelined.
While pricing on the e-discovery side is going down, it is more than compensated for through volume, Losey said. And less than 5 percent of lawyers in the United States are doing e-discovery work, he said. It's already an estimated $5 billion industry, and Losey said he thinks it will grow to $25 billion in 10 years.
Law firms will make double the amount of money then, he said.
E-discovery consultant David Cowen of The Cowen Group said e-discovery will be a money-maker for some firms and others will stay out of it. Some firms view it as a service center and others as a profit center. And just because firms outsource e-discovery services doesn't mean the practice isn't a profit center for them, Cowen said.
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