Law firm Pillsbury Winthrop Shaw Pittman is preparing to go beyond moving back-office operations to a smaller, less expensive city and actually start sending legal work there as well.
The New York-based law firm, with about 160 attorneys and staff in Washington, plans to begin hiring a small number of lawyers in Nashville, where the firm has run its business operations center since 2011.
Pillsbury will begin by hiring six attorneys and a handful of other timekeepers, including paralegals and other consultants, Pillsbury Chairman Jim Rishwain said. Those attorneys will initially focus on supporting the firm’s litigation matters, doing work such as discovery, document review and research.
That may later expand into legal work in intellectual property, corporate and real estate, Rishwain said.
“It was always part of our mind-set that over time we’d move legal services to Nashville,” Rishwain said. “Today is another step in the evolution of our business model.”
The measure is partly to cut costs. The billing rates of attorneys in smaller legal markets such as Nashville are typically lower than those in larger markets such as New York and Washington.
“We can maximize cost savings, but in a way that does not compromise coordination and knowledge-sharing, and also enhances our ... fully integrated platform to our clients,” Rishwain said.
He added that geography matters little when it comes to the kinds of legal work that will be done in Nashville.
“For litigation, the jurisdiction could be New York or San Francisco or London, but there are certain fundamental things that have to be done, it doesn’t matter where in the world those services are,” he said.
Pillsbury, Orrick Herrington & Sutcliffe and WilmerHale are among the most notable firms that have sent back-office operations to cities that are not considered major metropolitan hubs for legal work. Orrick opened an operations center in Wheeling, W.Va., in 2002; Wilmer followed with its Dayton, Ohio, center in 2010.
The industry “is in a transitional phase where law firms are seeing this as a way to cut costs for work that really doesn’t require an Ivy League law school graduate to do,” said Steve Nelson, managing principal for the law and government affairs group at the Arlington executive search firm McCormick Group. “Plus, you do it in a location where rent is cheaper and support staff is cheaper, so you can do this in a low-cost environment.”
In the future, though, using attorneys for discovery and document review may get phased out.
“Technology can do a lot of what attorneys do now, in terms of spotting issues and potentially discoverable documents,” he said. “As technology continues to explode, I think that the approach of using mass numbers of attorneys to do this kind of work will largely disappear. But for a few years, this will be a way to cut costs.”