Fee Limits Put Pressure on Attorneys to Enhance Technology

For LOGS Financial here, which was been acquired recently by First American Corp., the need to implement technology to automate functions and streamline costs couldn't have been more clear.

Gerald Alt, a senior LOGS executive, told MSN last month that cost pressure has been a fact of life in the default outsourcing business for some time.

"I started my own law practice in Michigan back in 1987, and 10 years later the flat fee for doing an FHA foreclosure was the same as it had been when I opened," he said.

Meanwhile, the cost of doing business, especially labor costs, continued to rise over that time. The prevalence of flat fees for legal services related to default management and pressure for completing foreclosure work within state-specific timelines has forced LOGS and similar companies to look for ways to automate and streamline the business.

LOGS embarked on a three-phase process to upgrade its workflow technology starting in 2002. The first phase has been completed, and LOGS is now proceeding with the second phase.

Mr. Alt said that one of the company's first goals was to foster acceptance of the new, browser-based system among attorneys and other users.

"We wanted to retain all of the functionality we had in the former system, and we wanted to build foundation for automation and intelligent workflow."

Now, work is proceeding on the automation and intelligent workflow ends of the project. Mr. Alt noted that automating a redundant task doesn't change the fact that it is redundant. Instead, LOGS hopes to improve efficiency by implementing technology with an eye to improving process management as well.

To do that, LOGS and its technology partner, AP3 Solutions, have enlisted help from E-Style Software, a company that utilizes computer programming experts in Russia to conduct much of its work more quickly and cheaply than it could be done in the United States. AP3 Solutions, based in Nashville, previewed its new Web-based default management solution for the mortgage banking industry at the MBA's 2003 National Mortgage Servicing Convention in February.

Artem Novikov, vice president of business development at E-Style Software, said that his company's goal was to help LOGS reduce information technology costs by creating a lighter and cheaper IT infrastructure while allowing LOGS staff to do their job quicker. E-Style is based in New York and backed by a development team in Moscow.

Utilizing Russia's highly educated computer programmers to develop custom software is one way E-Style keeps expenses down.

"We are actually competing with India on price. We are that inexpensive," Mr. Novikov said.

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