⏩ Could tech companies have done anything to prevent legal scrutiny from the U.S. government?
Welcome to another edition of FORWARD GC, a 4 minute newsletter with fresh takes on the legal news you need to start your day. Curated by friends at Lawtrades—a platform helping you rethink the work you send to law firms.
This week: Needing something to read that’s not about the election? We’ve got the scoop on why the federal government decided to start targeting Big Tech and the increased legal trend of outsourcing. Plus: A few tips for reducing gender equity issues for attorneys during the pandemic.
It seems like just yesterday Washington politicians were fawning over Mark Zuckerburg and the late Steve Jobs. Now, Big Tech reform is almost the lone policy that seems to have bipartisan support. How did everything get so contentious?
The blame started several years ago: Many people point to the 2016 election and the Russian bots that went with it as the start of Big Tech’s skepticism era. But longtime tech writer Cecilia Kang told the NYT it was already starting, with politicians disfavoring the power they believed Facebook and Twitter had over “the exchange of ideas.”
Now, Dems and Republicans cheered the Google antitrust lawsuit: And a liberal and conservative lawmakers have talked about Apple and Amazon having too much power.
The bipartisan part has to do with antitrust history: Antitrust laws have long been seen as technical and bipartisan, according to Kang.
Could Big Tech have avoided federal lawsuits and scrutiny?
Kang says probably not. With a stock market value of $5 trillion between Apple, Amazon, Google and Facebook, their sheer size was bound to attract scrutiny at some point.
Plenty of people have argued the Google antitrust suit is a political move. But Kang says the action could be both political and done on the merits. She expects the antitrust suit to continue, regardless of who wins the election.
As the pandemic continues, America’s biggest law firms are shifting more non-legal services to a centralized third party. These jobs are related to technology and infrastructure (not like the legal services Lawtrades provides).
Outsourcing was happening before the pandemic: Law.com had a trend piece on the subject in January, highlighting how Sullivan & Cromwell was moving technology and infrastructure jobs to an outside company. Somewhere around 25% of the AmLaw 100 has used the same firm to help with outsourcing initiatives.
The benefit is clear: Technology costs can be as high as $20 million to $30 million a year. Outsourcing comes with an expected savings of 20%, or ~$5 million. With the pandemic causing financial issues, partners still want high payouts, and they want to minimize layoffs and furloughs.
But are there issues?
UnitedLex, a third party company that had assumed work for the now-bankrupt law firm LeClairRyan, is being sued for allegedly sucking money out of the firm. Legal analysts question whether the risk of placing trust in a third party is worth the expected savings. (Again, Lawtrades’ service is vastly different in that we provide vetted/trusted lawyers and spend transparency software).
The increase in outsourcing is expected to continue through the pandemic. It would take a few more conflicts and bankruptcies to change law firms’ outsourcing trajectory.
As we have covered in this space before, women lawyers have been particularly affected by the pandemic. They are more likely to leave the workforce and to deal with burnout because of increased home/work responsibilities.
In Law 360, attorneys for Ogletree Deakins Nash Smoak & Stewart shared advice for reducing the pandemic’s impact on gender equity.
Job sharing: Consider letting two employees share the workload -- and the salary -- that typically goes to one employee. This strategy could also be an alternative to layoffs and allow employees to stay until the economy improves.
Offer the same parental benefits to women and men: Any potential to work reduced hours should be offered to any parent. An emphasis of parental benefits toward women can lead to a less level playing field.
Use the pandemic as an excuse for an audit: Are there lingering pay issues and wage gaps between attorneys and staff? Do you need to push for more specific achievements for deciding bonuses? This is a good time to re-evaluate everything.
What else we’re forwarding
Bankruptcies went down during the pandemic: Did businesses fare better than expected? Potentially. More likely, the filings are down because courts have been closed or limited for part of the year.
The pro/con guide to reforming the Supreme Court: To pack or not to pack? And is there room for other changes in America’s highest court? This in-depth project is worth a read for any devout SCOTUS follower.
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