Law firms are at a “watershed” in servicing e-discovery tasks for corporate clients, according to a survey released on July 22, sponsored by RVM Enterprises Inc. and conducted by Ari Kaplan Advisors.
Ari Kaplan, reporting on the survey, said that 30 law firm attorneys who are primarily outside e-discovery counsel to corporate legal departments were interviewed. All the attorneys practice in Am Law 200 firms. Twenty-two of the participants are partners and eight are senior e-discovery attorneys. All the attorneys surveyed recommend e-discovery software and vendors to their corporate clients.
The survey found, among other things, that law firms are finding innovative ways to service corporate clients, who are demanding more transparency and cost reductions from outside counsel, along with taking more e-discovery roles in-house.
Almost all survey respondents agreed that client expectations for practice support technology have changed. Eighty-nine percent said the change is reflective of technology costs. Other reasons included the increasing speed of data creation and the volume of data.
A common theme identified by one respondent: “Clients think that e-discovery services should be part of the operating costs of the firm.” To counter that, firms need to convince clients and educate “counsel on why e-discovery services need to be on an invoice,” said another respondent.
According to the survey, firms are changing their e-discovery practices to strengthen their billing proposition by:
Replacing deficient data-processing vendors.
Migrating to new software.
Identifying and partnering with expert outside partners.
Establishing a uniform approach to e-discovery tasks.
Short of making e-discovery services an operating cost, a large majority of survey respondents said that corporate clients equated greater efficiency with cost reductions. And that translates to “spotlighting strategies for mitigating risk in the most cost-effective manner possible,” observed Kaplan. For example, what is the risk of missing important documents if the client forgoes a second level of document review to save costs? Or aggressively culls documents in early case review? Or cuts back on quality-control mechanisms?
Another common theme identified by firm respondents: In-house lawyers are taking on more ownership of the corporation’s e-discovery effort. Rather than leaving key decisions to outside counsel, in-house legal departments are forging their own relationships with technology vendors and developing their own processes, balancing efficiency and risks “that comport with their internal strategy.”
While e-discovery appears to be going in-house, an overwhelming majority of law firm respondents maintain that adopting new technology can help law firms increase profitability for e-discovery services. The challenge then becomes a matter of “segmenting the billable work to reflect a firm’s traditional counseling role and its evolving position as a service provider in certain circumstances,” said Kaplan.
The purpose of discovery generally is to facilitate efficient and just dispute resolution. Balanced against that goal is concern for undue burden, delay and expense. Given these conflicting interests, courts generally do not require “perfect” efforts to preserve, collect and produce electronically stored information. Rather, the electronic data discovery process must only be “reasonable” under the circumstances.
Yet, absent express agreement of the parties, or specific court order, disputes about the adequacy of EDD efforts almost inevitably arise. Courts have not articulated objective benchmarks of reasonableness in EDD, and the very process of demonstrating (or challenging) the adequacy of EDD efforts itself imposes burden, delay and expense. On a big-picture basis, the concept of “proportionality” may mean not only the reasonableness of the e-discovery process, but also the reasonableness—under the circumstances—of efforts to demonstrate the adequacy of the process. The inclusion of tests of cooperation may make review of EDD efforts easier for courts to conduct.
The Federal Rules of Civil Procedure, and equivalent state court rules, generally incorporate the concept of proportionality in discovery. In broad terms, the interests of the parties (and the justice system) in a fair search for truth must be balanced against the amount at issue in the case, the resources of the parties, the number and complexity of the dispositive issues in the proceeding, the time available to conduct an investigation and other factors.
Evaluation of the adequacy of EDD requires more than a purely mathematical count of the amount of materials produced, versus the costs of the process. Some sense of priority of materials (especially materials that may help the parties resolve their dispute more promptly) must be imposed. Priority, however, is very much in the eye of the beholder. And efforts at estimating costs of discovery are notoriously difficult, especially in the early stages of litigation.
Given these challenges in formulating an EDD proportionality calculus, courts have increasingly focused on the fairness of the process—versus simple metrics—as a means to impose some judicial restraint on EDD excesses. The traditional “go fish” approach to discovery requests and responses, in particular, appears ill-suited to creation of an efficient discovery process.
Courts, often citing the Sedona Conference Cooperation Proclamation, have called for increased transparency and collaboration in e-discovery. A particular point of contention involves sharing of search terms; some practitioners insist that all such information is protected as work product. Collaboration in the formulation of such terms, however, can greatly improve the efficiency of the process.
The problems of proportionality and cooperation become ever-more complicated, as computer technology advances. The era of “big data” has ushered in new challenges, and new opportunities, for lawyers and vendors involved in EDD. In many cases, the volume of material defies human-only review. EDD requires up-front planning to determine the appropriate scope of data custodians, time frames and search terms. Absent agreement between the parties, wasteful “do over” efforts may ensue. Use of systems such as predictive coding, moreover, which requires both an initial framework for the search and review process and a verifiable quality control scheme, invites parties to share knowledge of the best means of structuring the process.
Given these developments, it is not surprising that the most recently proposed amendments to the Federal Rules of Civil Procedure have focused particularly on issues of proportionality and cooperation. At a minimum, these revisions will help raise awareness in the area, both at bench and bar. Improved (and continuing) systems of study and education also appear essential, as changes in technology, business practices, rules and procedures in EDD require constant efforts to maintain competence. Recent American Bar Association modifications to the Model Rules of Professional Responsibility, focused on the need for lawyers to maintain technical, as well as legal, competence, confirm the point.
Ultimately, however, the e-discovery system demands new professional attitudes. The rules (at the federal and state levels) assume “good faith” efforts to confer on discovery issues; to formulate discovery plans at the outset of a case; and to resolve (where possible) discovery disputes that may arise during the course of a case.
The point is that the case belongs to the parties and their counsel, not the judge. The parties are in the best position to manage the discovery process in accordance with their needs and capabilities. Refusal to cooperate, and careless dumping of issues in a judge’s lap, is virtually guaranteed to receive judicial opprobrium. Where judges spot such attitudes, they may choose to appoint special masters, mediators, referees or other experienced neutrals, who can help the parties focus on cooperative means to proceed through the challenges of e-discovery. Even where not wholly successful, efforts to agree on fundamental points, and to narrow controversial issues requiring judicial attention, best serve the justice system and the parties.
Steven Bennett is a partner at Park Jensen Bennett, based in New York City.
In just the time it takes you to finish reading this blog entry, more than 400,000,000 e-mails will be sent.1 As large as that number is, it is not the revolution. Nor is the revolution the more than 1000 new websites that will be created or the more than 600 new blog posts that will be published on WordPress.2 Nor is it the more than 1,200,000 new pieces of content that will be shared on Facebook or the more than 200,000 tweets that will be sent on Twitter.3 Although vast, none of these growing oceans of data – nor the many others like them – are the revolution.
The availability of these vast electronic oceans is a new phenomenon, made possible by the intersection of cheap storage and processing, novel software solutions, and ubiquitous connectivity. From these new oceans, businesses and academics of all types are extracting astonishing intelligence. For example, Google has discovered that it can mine the searches users run to identify regional flu outbreaks a week or more before they are identified by the Centers for Disease Control and Prevention.4 But, these novelties are not the revolution either.
The big data revolution underway is a revolution of management.
It is axiomatic that you cannot manage what you cannot measure, and the advent of big data makes it possible to measure more than ever before. In every area, from the purchasing behaviors of customers, to the arrival times of airplanes, big data is being mined for insight and intelligence that can be used to make better decisions.
This shift, towards data-driven decision making, is the revolution.
Data-driven decision making is equally valuable to lawyers. From predicting probable patent case outcomes to quantifying the profitability of a law firm’s lawyers, data-driven decision making is already being leveraged throughout the legal field. In the context of electronic discovery, data-driven decision making has the potential to profoundly increase efficiency, quality, and control for corporate and law firm practitioners alike.
This blog entry is the first in a four-part series that examine: big data; data-driven decision making; how corporations and law firms are leveraging it; and how you it applies in the context of electronic discovery. We begin below with a deeper dive into just what we mean when we say “big data.”
What is Big Data?
Big data is traditionally characterized by reference to four V’s: velocity, variety, volume, and veracity.5
Velocity refers to the speed at which data is created.6 The proliferation of network-connected users and network-connected devices has dramatically increased the speed at which new data is being generated. For example, Google receives and processes more than 2,000,000 queries every minute.7
Variety refers to the diversity of structured and unstructured formats in which data is created.8 In earlier eras of computing, the vast majority of the data created and stored was structured data housed in relational databases; now, 90% of the data generated by organizations is unstructured (e.g., text documents, multimedia files, etc.).9
Volume refers to the immense quantities of data being created.10 As networked users, devices, and sensors have proliferated, the volumes of data being generated has increased exponentially. Google CEO Eric Schmidt has explained that from “the dawn of civilization through 2003” approximately 5 exabytes (5 billion gigabytes) of information was created but, as of 2010, that much information was being “created every 2 days.”11
Veracity, refers to the reliability or accuracy of the data.12 As more and more attention has been paid to this data and what can be done with it, the veracity of the data and the analyses performed upon it has also become an important dimension of big data.“ Having a lot of data in different volumes coming in at high speed is worthless if that data is incorrect.”13 Today, 1 in 3 business leaders do not trust the information upon which they rely to make decisions.14
Today, a majority of companies in the United States have at least 100,000 gigabytes of data stored.15 In a 2013 Gartner survey, 64% of the organizations surveyed indicated that they had invested or planned to invest in leveraging those stores of data.16 Nearly half were looking to big data projects as a way to improve process efficiency.17
KCura Corp. held a webinar on July 2 called “Intelligent Collection: The Keystone to Efficient E-Discovery” that discussed ways to streamline the e-discovery process and other trends.
The 53-minute presentation featured speakers: Cheryl McKinnon, principal analyst at Forrester Research Inc.; Bennett Borden, partner at Drinker Biddle & Reath; and Jeremy Montz, product manager at kCura. Here are five takeaways from the webinar.
1. E-discovery is gaining clout.
IT decision makers at enterprises, not necessarily law firms, are bringing more e-discovery functions in-house (e.g., collection), said McKinnon.
The number of IT/Security professionals that consider e-discovery a “critical priority” has tripled from 2012 (4 percent) to last year (12 percent), according to data listed in a Nov. 2013 Forrester report called “Understand The Context Of E-Discovery Tools For Your Enterprise.” Forrester polled 1409 and 1147 IT professionals in 2012 and 2013, respectively, to compile the data.
2. More enterprises are bringing e-discovery in-house.
As a result, more IT decision makers at organizations are bringing e-discovery functions, such as collection, in-house, McKinnon said. “This is a pretty good indicator that organizations are becoming more sophisticated about e-discovery,” she said.
3. Content management challenges.
Forty-six percent of content management professionals who responded to an online Forrester survey conducted in May 2013 said that lack of coordinated governance was the biggest content management challenge at their organization. The survey polled 179 content management professionals. The numbers are in line with preliminary data for 2014, said McKinnon, who noted that lack of governance is still at the top of the list this year with 55 percent.
4. Distill data from e-mails early on.
An overwhelming majority of communication is still conducted through e-mail, said McKinnon, even as new forms of communication are released, such as instant messaging, mobile, social media, etc. “E-mail continues to be the lifeblood of communication,” she said.
Important information should be extracted from e-mails at an earlier stage, so a large quantity of e-mails do not have to be stored for years, said Borden. “E-mail looses its value, its currency, very quickly,” he said.
Holding onto unnecessary e-mails too long could be “a huge burden on companies” and “drives up e-discovery costs,” Borden continued.
5. New ESI forms fly below radar.
Newer sources of ESI are less likely to be under a content management retention plan, said McKinnon. “The newer the content type, the least likely an organization is to have it under some kind of retention management program,” she said.
Records management professionals are least likely to implement technology for managing retention on social or collaboration sites (143 respondents voted “not interested”), such as Jive, Yammer and Chatter; followed by cloud based file sharing (123 respondents voted “not interested”), such as Box Inc.; and instant messages (108 respondents voted “not interested”). The Q3 2013 survey polled 397 records management professionals, and was conducted jointly by Forrester and ARMA International.
“Some of this information is highly critical to a company in a case, and yet it is rarely considered, not just in the records management space, but even in the e-discovery space,” Borden said. “If not considered, it can be a gigantic problem later on in the case.”
Mark Gerlachis a staff reporter for Law Technology News.
Fixed rate or variable? The analysis is not exclusively for mortgages. Gina Passarella in “Firms Beginning to Take Flat-Fee Model to E-Discovery,” published in LTN’s sister publication, The Legal Intelligencer, reports that firms are starting to move away from pay-per-use models of e-discovery services and instead are negotiating flat rates.
It can be risky for the service providers and the firms, said Passarella, as contract prices are based on estimates of the amount of data a firm expects to handle in a given amount of time. She reports that one firm, Buchanan Ingersoll & Rooney recently made the switch, and has already found they’ve saved thousands of dollars, simply with the new access to technology that wasn’t previously available to them or their clients.
To transition to flat rates, the firm relied on data collected through their project management system over the past 2-1/2 years, which gave them a good idea of the amount of information clients were putting through the e-discovery processes, said Passarella. A recent survey suggests 40 percent of large law firms are looking to transition to a managed services model, many of which offers services on flat-fees or a contractual basis.
However, not all in law firm IT are supportive of this new model. Passarella interviewed Pepper Hamilton’s directory of discovery services, who supports managing e-discovery internally. “When it comes to the flat-fee model, Lichter said there was a risk on both sides of the transaction, with a potential windfall for one of the parties,” as well as questions about how the cost would then be passed onto clients, she reported.
Attorney Marlisse Silver Sweeney is a freelance writer based in Vancouver. Twitter: @MarlisseSS.
