One of the fastest-growing departments at Winston & Strawn is also one of the most obscure, at least to many outside of the legal world.
The law firm has taken the unusual step of creating an in-house shop to handle an important but unglamorous part of the legal process known as e-discovery — the management of electronically stored data such as e-mails and text messages that law firms and corporate legal departments must gather, analyze and turn over to adversaries in litigation, and to the government in investigations of corporate malfeasance.
So far, it’s paying off. For three consecutive years, revenue from the group — called the e-discovery and information management practice — has posted double-digit growth. In 2013, it brought in more than $20 million in revenue, said Winston attorney John Rosenthal, who leads the practice. Though that is a small sliver compared to Winston’s overall revenue in 2013 of $741 million, the group is growing at a faster rate than some of the firm’s more established practices.
“From a dollar standpoint, it’s not that significant,” Rosenthal said. “But as a differentiator to our clients, it’s huge.”
Many law firms farm out e-discovery to outside vendors, and Winston’s push to keep the work internal reflects the continued pressure law firms face to find new sources of revenue at a time their biggest clients, corporate legal departments, are reducing their outside legal spending.
In-house lawyers’ concern with e-discovery is mostly financial. Discovery is by far the most expensive part of any litigation matter, and it can cost hundreds of thousands of dollars to manage electronic data in a lawsuit.
Winston’s decision to develop an in-house e-discovery team is relatively unique among law firms, and is tied to the firm’s business model. Winston, which has about 100 attorneys in Washington, attributes a larger portion of its business to litigation than the typical corporate law firm. About 55 percent of Winston’s legal work is litigation, compared to 25 percent at many large full-service law firms, Rosenthal said. And about 60 percent of the revenue from any piece of litigation is connected to discovery costs.
In the pre-digital age, law firms paid junior lawyers by the hour to pore over documents and highlight relevant information. Today, e-discovery vendors use software and “predictive coding,” which scans a sample portion of data for key words and phrases, then applies that to the rest of the data. Winston’s operation falls somewhere in between the two: The firm hires attorneys to review documents electronically that have been culled down from a much-larger pile of data.
That is changing the way Winston hires employees. Prior to the group’s existence, the firm did not hire attorneys specifically to review documents, and most new additions to the firm were either lateral hires from other law firms, or associates from top law schools with ambitions to make partner one day. Today, the firm maintains between 25 and 50 document review attorneys who work at “review centers” housed within the law firm’s offices in New York and Washington. The number fluctuates between 10 and 150 because the review attorneys are often hired for short-term projects, but during their employment, they are considered Winston employees and receive benefits. Rosenthal said he recently got 400 applicants to fill 10 such spots.
Winston wants to compete head to head with e-discovery vendors such as FTI and Kroll. This year, the firm started pushing a new service in which Winston’s e-discovery team will handle e-discovery for cases even if other law firms — often their competitors in the legal market — are handling the actual litigation of the case.
“We’re getting hired to just do the e-discovery and work with other law firms to handle the substance,” Rosenthal said. “For us, I think the growth will continue for quite a while.”