Complex Litigation Services (Part 3) – Pros and Cons of “Virtual Teams”
Before we dive into the cost structures of complex litigation service providers, let’s talk about another possible solution—a “virtual” team.
What is a virtual team?
There are actually two different common definitions for a virtual team, both of which apply to our discussion of where one can find complex litigation services.
As we progress into building competitive alternatives in the market for complex litigation that create true substitutes for these legal services with a lower price point, discussing the pros and cons of these teams is critical background.
Let’s take one at a time.
Virtual Team = “Work from Home” Firm
The first is what comes to mind for most readers: an entirely remote team. That is, a team that is not all located together in the same physical office or set of offices. Think of an army of “work from home” attorneys who work together virtually to provide complex litigation services.
Is this a feasible option? Assuming you can find the lead lawyers who can help make this work, what are the pros and cons?
- Potential for lower cost. A truly remote team has dramatically—with a capital “D” and in all CAPS—lower costs than Big Law. Without the overhead structure, geography tax, and legacy operations of Big Law, a remote team can run circles around larger firms from a cost perspective. It truly is not even close.
- Potential for national reach. A large virtual firm can more easily penetrate new jurisdictions, as the cost of entry is significantly lower than a larger firm that needs to get office space, large groups of attorneys, and the like.
- Remote-only virtual teams can lack cultural connectivity and miss out on valuable insights from in-person collaboration. A remote-only team can be really valuable, but teams that completely lack an office can create complications. The impromptu discussions, engaging colleagues to make quick decisions or join an unscheduled call with a client or opposing counsel, more frequently occur in an office environment. It is also harder to create the interpersonal connections that build good will and relationship capital, which can be critical during the difficult and stressful times that come with complex litigation.
- Lack of in-person support team when needed. Even if the lawyers are not always together in person, an office is critical for the paralegal team. Being able to print, bind, and review the pleadings and deposition-related materials for a complex case without modern equipment, space, and extra pairs of eyes is very, very difficult. Trying to get binders together for a major Rule 30(b)(6) deposition without in-person assistance, a big printer, and a binder set up? Nearly impossible.
Virtual Team = Combination of Firms
A second, perhaps less common (but no less important) “virtual” team is a team comprised of a combination of different service providers who, collectively address all of a client’s needs in a complex litigation case. The members of each service provider may all work together in a brick-and-mortar office but, because they are part of different companies or firms, when working together they connect “virtually” outside of the walls of their own offices. Basically, you are hiring a group of independent companies and firms to put together the team that you need for a particular case.
This happens in nearly every complex litigation case, even when Big Law firms are retained, which may be surprising to many clients. For example, even if a Big Law firm has the capacity to handle litigation surges, either for cost or capacity reasons they often will bring on third parties to help review documents (e.g., a temporary staffing agency) and to host documents (i.e., an e-discovery hosting company). When they do this, they have created a virtual team.
Virtual teams can be even more bespoke when the stakes are high and/or there is very niche subject matter expertise in play. Here is an example: An ERISA class action is pending in Tennessee. In this case, the client might hire an ERISA expert from a solo or small firm, a lead trial attorney from a regional firm, a discovery expert from an ESI-focused discovery firm, a staffing agency for document review, and a data hosting vendor to handle the document production. Together, they can give the client what it needs.
Given the above, what are the pros and cons of creating this kind of virtual team?
Among the pros:
- The enabling of customization and comprehensiveness. A client can customize the team to their liking and pick and choose providers that best fit their needs.
- Potential for lower cost. Subject to the caveats below, hiring different sources allows a client to price shop in a way they cannot if they are simply shopping among Big Law firms. The discovery expert might be in Nebraska, and the hosting company based in South Carolina, and both will have lower cost profiles than say law firms or other vendors based in New York City.
And the cons:
- Friction in identifying and hiring. It is one thing to want to hire a virtual team, it is another to actually find all the right pieces that will work together seamlessly. Finding these experts takes a lot of time and investment, with no guarantee of a smoothly operating team as the end result.
- Potentially higher cost. It is possible to get lower rates by finding lower-cost components of the team. But engaging many different teams creates opportunities for inefficiency and redundancy. Where, on the other hand, having one team, with one bill, and one point of contact, provides invoicing accountability that can go missing when managing multiple vendors.
- Potential for turf battles. This is one of the most difficult challenges of creating a virtual team. Who is in charge? Who does what, and what happens when two firms/vendors want to do the same thing? Turf battles, finger-pointing, and back-channeling are common. Getting a disparate team to work together well and in harmony can happen—but it usually takes a lot of work on the part of the client to manage and set expectations amongst the team.
A virtual firm can be an alternative to big law firms. Given the complexity of putting them together, the potential friction and increased cost, and the nearly limitless ways that these structures can be put together, we flag them now as an option, even if a less-than-ideal one at that.
In our next post, we will focus on the cost profile for the primary option for complex litigation services – big law firms.