Last week, Integreon, one of the world’s largest legal process outsourcing companies, announced that it had appointed a new chief executive officer.
Guiding the company into the new, lean and mean legal world is Bob Rowe, who most recently served as a practice leader of Huron Legal, which was acquired by the eDiscovery and document review giant Consilio last year.
Integreon is one of a handful of companies that have expanded over the past decade to manage the discovery process for lawyers and store their data, among other administrative and business services.
Rowe predicts that in the next five to seven years, technology will play a bigger role in automatically choosing which documents are vital in a case, and which are irrelevant, so the attorneys can focus mainly on case strategy.
“It’s getting a lot of buzz, but if you look at the actual use of cases, there is still a lot of room for growth,” said Rowe of technology currently used in the discovery process, called technology assisted review.
“If you go back seven or eight years, there was a lot of buzz about using offshore attorneys. And the press was much greater than the actual usage. It took another five to six years for the usage to catch up with the press it was generating at the inception. I think we’re seeing something similar here with technology.”
In a wide-ranging interview, Rowe caught up with Big Law Business about his first days at Integreon, what he hopes to accomplish there, as well as his views of the legal market and how it’s evolving. Below is an edited transcript of our conversation.
Big Law Business: What led to your hire at Integreon?
Rowe: Bob [Gogel] indicated a year ago that he wanted to transition to the chairman of the board position. They started to look for a new CEO and that was kind of the genesis. They approached me in the fall, when I started discussions. From where I sit, I think it’s a great organization and it fits well with my background. I was at Huron and even before that, I was in the legal space. The footprint at Huron and its resources are very similar to what Integreon offers. Huron had onshore and offshore review. They did electronic data processing. They also had some collections in forensics. All of that is present here at Integreon, but it does much more in business services. They have a marketing arm in India. There are lots of overlap, but also some additional opportunities to take these units and put them to market together.
Big Law Business: How did discussions unfold and what led you to think this was the right role for you?
Rowe: Huron had made its decision to sell its legal practice a little over a year ago and they ultimately wound up selling to Shamrock [Capital Advisors], which owned Consilio. I left there, and I frankly wasn’t sure what my next move would be. I was doing some consulting on the side. And then I was approached by NewQuest Capital Partners, who bought Integreon in September. I started talking to them in the November, December time frame. The most important thing to me was the strategy. What did they want to do? When private equity owns anything, they have certain financial objectives. That means at some point there is going to be another transaction. I needed to know what they wanted to accomplish. Was this going to be an imminent flip?... How much money was going to be set aside for us? Sitting down with them and talking with them over time, I thought it was a nice fit. I have certain thoughts about the industry and it fit nicely with what they are trying to accomplish.
Big Law Business: What kind of thoughts?
Rowe: I don’t want to go into too much detail, because some of this was part of our strategy going forward. But generally speaking, there is a lot of great resources here and we need to make some investments. I’m a big believer in organic growth and I think that fits nicely with what they are trying to accomplish. In this industry, we’ll continue to see a lot of acquisitions and consolidation. At least in the near future I don’t anticipate any major acquisitions. It’s really more along the lines of some tuck-ins and investments to achieve organic growth. Integreon has a great footprint. One of the things I like about this is that it doesn’t take a huge investment. They have a number of great facilities worldwide, a great culture, and great set of people. From where I sit, it doesn’t take a lot of investment tapping into that potential.
Big Law Business: We’ve seen the LPO market mature over the past 10 years or so. How do you see the market evolving now?
Rowe: Back up 15, 20 years... There has been this evolution. It started with outsourcing and staffing the eDiscovery industry. And that gave way to managed document review, onshore, and then you have the offshore component, which further helped reduce costs. And now you have technology assisted review: the technology play to even further reduce cost by not putting eyes on every document [in a litigation]. Every client has a comfort level. Some people are adamant to keep it onshore for strategic or jurisdictional reasons. Some are OK taking it offshore. Some are comfortable with the technology. It’s hard to make predictions. I remember in the 90s someone wrote an article saying the billable hour will be dead in five years, and I think that’s still going quite well. Storage is increasingly cheap, very very cheap. It just makes it easy for companies to save their emails and documents. I do think at some point it’s just going to become cost prohibitive to put eyes on even potentially relevant documents. And you’ll need technology or some assistance with that. Five to seven years from now you’ll have to layer in some technology to assist folks.
Big Law Business: Hasn’t that already been happening, with technology assisted review?
Rowe: It’s getting a lot of buzz, but if you look at the actual use of cases, there is still a lot of room for growth. I would back this up and if you go back seven or eight years, there was a lot of buzz about using offshore attorneys. And the press was much greater than the actual usage. It took another five to six years for the usage to catch up with the press it was generating at the inception. I think we’re seeing something similar here with technology.
Big Law Business: Did you read that New York Times story about how lawyers shouldn’t be afraid of robots taking over their jobs quite yet?
Rowe: I thought it was a great article and I agree with it. In 2004, 2005, 2006, there were companies I was working with or looking into who had on their mission statement that they replace attorneys. The classic example [of technology needing to be developed] to me was, ‘Well, I know their software can do a lot. But they can’t identify privileged documents. It goes beyond four corners of the document.’ So that’s one small example, but I think we have a little ways to go on the technology.
When we collect documents, and this goes back 10 or 12 years, seven or eight of the 10 documents are non-responsive to a case. A lot of what I talk about relate to the two or three documents of 10 that gets promoted into the case. For a computer... to identify that these are the seven out of 10 documents that you don’t need in a case, you don’t need a lawyer to do that, or a law firm using the billable hour. When you get those two or three documents in the case, now you’re dealing with the core practice of law and strategic analysis and litigation practices and all of those things aren’t going away any time soon.
Big Law Business: Any changes ahead for Integreon?
Rowe: It’s a little early. Ask me in 90 days and I might have a different answer. As I sit here today, and as I look at their current strategy, I see this as an extension of what we’ve been doing. I don’t expect any radical changes out of the box. They have great service offerings and those will continue. If anything, I want to go a little more aggressively to the market and let us be known. In some respects, we are known in certain parts of the country better than others and I’d like to see that evened out across the country. Some of this is about marketing and branding.
Big Law Business: Where is Integreon best known?
Rowe: I would say that we are better known or best known on the Eastern Seaboard and we can do a better job, I think, of getting our name out there in the West or Midwest. Our coverage is not quite as even out there. And that’s based on some preliminary discussions with the senior management team here.
Big Law Business: ‘Ask me in 90 days’ was kind of a cryptic answer... should we expect any big announcements this year?
Rowe: [Laughs] There are no teasers here. My first job in two weeks is to go around to all these different offices and get a sense for where their heads are at... That is a sixty to ninety day task. No big announcements are pending.
Big Law Business: What are you seeing out of your competitors these days, as you assess the market?
Rowe: One thing is consolidation. Pangea3 is owned by Thomson Reuters. DTI just bought Epiq. So in some ways, a number of our competitors are growing by acquisitions and challenges come with that. One of the things I like is that we as a company are not having to go through the merging pains, if you will, of big companies integrating. So in some ways, I think that enables us to move a little quicker and we should certainly use that to our advantage. I think we’ll continue to see consolidation in this industry.
Big Law Business: Why is that?
Rowe: If you look at industries as they mature, you typically see small companies entering and then as the industry matures, it takes additional investment dollars to compete. These companies get bought up and there is a hope of buying customer lists and market share and if you get market share without eroding the price, that’s good for shareholders. This industry is no different from other industries as it evolves and goes from segmented industries to one with a couple eight hundred pound guerrillas.
Big Law Business: How big is Integreon?
Rowe: It’s about 2,500 employees, about a little less than half in the U.S. and the remainder are located in India and the Philippines. We have four business units: legal services, document services, administrative service offerings and back-end type services for law firms and businesses.
Big Law Business: I saw David Perla, the former president of Bloomberg Law, joined Integreon’s board not so long ago as well. Is there any bigger story that’s driving these personnel changes?
Rowe: I will say that David was an influencing factor for me coming to Integreon. And I say that because he is a brilliant guy. He was the co-founder of Pangea3 and I have known David for a course of three months and I’ve spent a lot of time with him. He’s a tremendous addition to the board, so I welcome him as a teammate as we enter his industry to compete. He’s going to be one of five board members. The board, of course, are the ones who vote on major decisions or actions of the company. So if there is going to be a transaction in the future, or if there is going to be a strategic shift, they are going to be the ones who are appraised of those and have input.
Big Law Business: How have your first days gone?
Rowe: I’m looking forward to this weekend and getting a little rest. It’s been a bit of a world tour. I was in New York yesterday. I’m trying to do a lot of one-on-ones with folks. I came to D.C. today to do the same. We have an office in Fargo and then I’m going to go over to the U.K. and then visit our two offices in India and then the Philippines. And that entire trip is spanning ten days, so it’s pretty intense.
Big Law Business: What have you learned so far?
Rowe: It’s a very tight knit group. They believe in each other and the company. The average tenure is seven or eight years, and some are even over 10 years. You have a lot of experience and a lot of great teamwork.