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GC's New Discovery Role

By Steven Harber and Mike Kinnaman
November 29, 2005

Discovery today involves significantly more digital content to sift than ever before, resulting in a costly and time-consuming start to litigation or regulatory investigation.

In fact, one of the most common complaints from corporations today is that the cost of discovery is simply too high, making compliance with regulatory rules and litigation requests extraordinarily challenging ' and at times even crippling. But corporations can control these skyrocketing costs by taking a more active role in managing and preparing for discovery.

The impact of e-mail is staggering. According to a recent study published by The National Law Journal, corporations are projected this year to spend more than $1 billion for electronic discovery services, and nearly $5 billion to manage e-mail. Although these numbers seem large, they pale compared to the additional billions of dollars that corporations pay law firms to conduct discovery. An industry consultant tells us that one of his clients is spending $36 per document to review, from start to finish. This seems high, yet most corporations have no idea what they are paying per document. The fact is that most corporations never ask their law firm how much they charge per document, nor have they conducted any type of analysis to identify the true, total cost of discovery. The problem with this is that without a figure to use as a baseline, corporations will never truly know whether they are paying too much, and so will never be able to demand cost-savings. Imagine the dollars you could save your business if you knew what discovery should cost.

To ease the discovery burden for clients, law firms should develop consistent and repeatable procedures that can be deployed firm-wide for conducting large-scale document reviews. Many thought-leading law firms include an internal practice group in their litigation department that offers clients document review, production, litigation-support and counsel directly related to discovery. Such firms benefit clients by combining innovative technology and a trained staff to deliver a much lower total cost of discovery than traditional methods allow.

Understanding the Total
Cost of Discovery

The sheer expense of the discovery process is prompting a new dialogue between corporations and their law firms. In highly regulated or litigious companies, the general counsel is gaining more visibility into a firm's document-review costs and efficiency. This can start with a few simple questions:

  • “How will your firm handle my com-pany's document review and how much will it cost?”;
  • “Is there a tested plan that includes the use of leading-edge technology and an emphasis on project management and process?”;
  • “Are there documented quality-control measures?”; and
  • “Is there an ability to scale review resources, and a budget for the total cost of review?”

By asking law firms how they plan to respond to a discovery request, the GC gains a better understanding of the process, and ultimately will be better equipped to assess and prepare the company for discovery requests.

Unfortunately, many companies still don't learn the process until after a lawsuit has hit. This reactive way of handling discovery leads to inefficient and painful experiences that can be avoided with proper preparation. The five strategic steps outlined below can help to educate counsel ' and to prompt questions internally about discovery planning. Using this map, corporations can begin to develop an effective document-review strategy ' whether the process is conducted in-house or by an outside law firm. The result can produce not only dramatic time- and cost-savings, but also bring increased control of the process, and help counsel fashion the strongest case your company can present.

An Action Plan for
Discovery Management

Develop a strategic plan. Engage in careful planning up front to minimize expense and complications. Develop a project plan, workflow overview, organization chart, and review criteria before your company receives its next discovery request. The right plan can help communicate expectations and ensure that the right people are doing the right things at the right time, for the right price, which will provide a smooth process and a reduced total discovery cost. Who are the right people? Consider employing at least a project leader, manager and technologist to develop the step-by-step plan for responding to discovery requests. Many corporations now have a dedicated discovery team to better control the discovery process, including collection of data, data-processing, document review and production.

If focused, this plan can be created in a few weeks with support from your law firm, vendors and other consultants that fit into the plan. The right plan will provide a repeatable process that encompasses the discovery lifecycle, including the combination of vendors and technology required for each step. Once in place, develop an estimate of your annual budget for discovery, parsing out the individual factors that have an impact on your costs. This baseline provides documentation for the true expected cost of discovery, reflecting the savings achieved through pre-project planning.

Create a review methodology. Once you've developed a plan, it will be critical to create a systematic and defensible methodology that can be tailored to meet the needs of each and every discovery request. If you are having difficulty, consider bringing in a vendor to help identify review guidelines and develop a documented process that includes processing, review and quality control.

Although discovery and its many phases are often depicted as a single, linear process, the fact is that a solid review methodology must be flexible. Key information found during review often affects the review strategy. Consider focusing the early phases of review on key custodians to confirm review criteria, learn additional facts, adjust assumptions, estimate review rates, and prepare an initial budget.

One of the real headaches for corporations is the amount of wasted expense during document review. Despite the many programmatic culling techniques available today, typically more than 80% of the content that is delivered for review is irrelevant to the matter at hand. Much of the potential savings in this process can be found by identifying relevant material and eliminating irrelevant material as quickly as possible. Many corporations are employing a multi-pass review strategy that includes a first-pass triage. During triage, each document is reviewed for relevancy. Irrelevant documents are suppressed from further review and relevant documents are passed downstream as defined by the review strategy.

A more efficient and higher-quality review process can be constructed by putting more experienced resources on only relevant or potentially relevant material. First-pass reviewers will then have an easier job of declaring documents Not Relevant, Potentially Relevant or Potentially Privileged, leaving the more substantive privilege and issue-based determinations for the more experienced second-pass reviewers. This simple step shrinks the haystack of information, and creates a much smaller and focused document set, opening the door to faster review and reduced review fees.

Be active in selecting the right technologies. Corporations are rapidly adopting leading-edge software to better combat the volume of information requiring review. One example commonly employed in a multi-pass review is software enabling a visual and concept-based organization of electronic documents rather than a more traditional “page-by-page” linear approach. This software is proven across multiple examples to effectively and accurately identify relevant documents without having to develop complex search terms. Imagine you are searching for all documents related to someone named Madame X. Using sophisticated technology, the search result shows not only direct matches, but also visually illustrates how Madame X is related to other documents, concepts and individuals in the review pile. Reviewers can then isolate relevant documents, and irrelevant documents can be quickly removed. The result is improved accuracy, reduced review hours and a quick assessment of key information.

Consider these other important functions of a technology:

  • Enables reviewers to get up and running quickly, with minimal training;
  • Makes documents quickly available for review;
  • Keeps documents in native format, eliminating expensive pre-production steps;
  • Offers de-duplication and near de-duplication functionality to safely reduce the volume of reviewed information;
  • Presents a visual interface that en-ables reviewers to easily view document concepts, interrelationships and communication networks against a timeline; and
  • Arms project managers with robust reporting to assess review speed and facilitate quality control.

And, most important, when selecting technology, make sure that you understand the big picture of your purchase. Often, the technology price may be more costly than expected, but consider its impact on the total cost of discovery. One of the biggest mistakes corporations make when selecting technology is to make a decision on cost of technology in a vacuum. What if your new technology could save you four or five times the cost of review? Challenge the technology vendor to justify expense by demonstrating the technology's reasonable expected return on investment.

Invest in project management. It's a fact: Most lawyers do not have extensive project-management training. Due to the sheer volume of most requests and that volume's impact on the review process, project management is a critical component of managing discovery and review. With ongoing tracking of progress and adjusting the review process, you can ensure that your plan is on target and that any deviations from the original plan are quickly brought to the attention of the rest of the team so that adjustments can be made.

You may find it hard to identify a project manager on your legal team. Outsourcing this function can often be a faster way to get started; then, instead of dealing with multiple vendors, officers and parties, your legal team can focus on the legal issues with the added assurance that a consistent process is being managed and enforced.

Implement quality control and metrics. By establishing a quality-control plan and document-review metrics, GCs will have more confidence in the process, and in the results. A quality-control plan ensures that your review strategy is being executed in the manner intended and will answer questions such as, “If I have someone reviewing 1000 documents and she says that 500 are responsive, who's going to check to see if she made the right decisions?” Some methods for achieving quality control include applicable technology, statistical sampling and comparing result sets with those of other reviewers. With quality control in place, a GC can be confident that the review was done correctly.

Valuable details related to electronic-document processing and review can be tracked and measured. As a result, corporations can monitor important metrics to better manage their process. A few key metrics that can help corporations and their law firms better understand the impact of their review strategy are outlined in the accompanying chart.

Conclusion

With the proliferation of e-mail, the document-review phase of discovery will continue to cost corporations billions of dollars for years to come. But a proactive approach to assessing how reviews and investigations are currently conducted by internal staff or outside law firms will begin to shed light on why many current processes are so expensive. It will also present opportunities for organizations to prepare in advance and to be ready with a well designed plan, which will save time and money, instead of personnel finding themselves scrambling to react to the next document-review crisis.

[IMGCAP(1)]



Steven R. Harber http://www.discoverready.com/ [email protected] Mike Kinnaman http://www.attenex.com/ [email protected]

Discovery today involves significantly more digital content to sift than ever before, resulting in a costly and time-consuming start to litigation or regulatory investigation.

In fact, one of the most common complaints from corporations today is that the cost of discovery is simply too high, making compliance with regulatory rules and litigation requests extraordinarily challenging ' and at times even crippling. But corporations can control these skyrocketing costs by taking a more active role in managing and preparing for discovery.

The impact of e-mail is staggering. According to a recent study published by The National Law Journal, corporations are projected this year to spend more than $1 billion for electronic discovery services, and nearly $5 billion to manage e-mail. Although these numbers seem large, they pale compared to the additional billions of dollars that corporations pay law firms to conduct discovery. An industry consultant tells us that one of his clients is spending $36 per document to review, from start to finish. This seems high, yet most corporations have no idea what they are paying per document. The fact is that most corporations never ask their law firm how much they charge per document, nor have they conducted any type of analysis to identify the true, total cost of discovery. The problem with this is that without a figure to use as a baseline, corporations will never truly know whether they are paying too much, and so will never be able to demand cost-savings. Imagine the dollars you could save your business if you knew what discovery should cost.

To ease the discovery burden for clients, law firms should develop consistent and repeatable procedures that can be deployed firm-wide for conducting large-scale document reviews. Many thought-leading law firms include an internal practice group in their litigation department that offers clients document review, production, litigation-support and counsel directly related to discovery. Such firms benefit clients by combining innovative technology and a trained staff to deliver a much lower total cost of discovery than traditional methods allow.

Understanding the Total
Cost of Discovery

The sheer expense of the discovery process is prompting a new dialogue between corporations and their law firms. In highly regulated or litigious companies, the general counsel is gaining more visibility into a firm's document-review costs and efficiency. This can start with a few simple questions:

  • “How will your firm handle my com-pany's document review and how much will it cost?”;
  • “Is there a tested plan that includes the use of leading-edge technology and an emphasis on project management and process?”;
  • “Are there documented quality-control measures?”; and
  • “Is there an ability to scale review resources, and a budget for the total cost of review?”

By asking law firms how they plan to respond to a discovery request, the GC gains a better understanding of the process, and ultimately will be better equipped to assess and prepare the company for discovery requests.

Unfortunately, many companies still don't learn the process until after a lawsuit has hit. This reactive way of handling discovery leads to inefficient and painful experiences that can be avoided with proper preparation. The five strategic steps outlined below can help to educate counsel ' and to prompt questions internally about discovery planning. Using this map, corporations can begin to develop an effective document-review strategy ' whether the process is conducted in-house or by an outside law firm. The result can produce not only dramatic time- and cost-savings, but also bring increased control of the process, and help counsel fashion the strongest case your company can present.

An Action Plan for
Discovery Management

Develop a strategic plan. Engage in careful planning up front to minimize expense and complications. Develop a project plan, workflow overview, organization chart, and review criteria before your company receives its next discovery request. The right plan can help communicate expectations and ensure that the right people are doing the right things at the right time, for the right price, which will provide a smooth process and a reduced total discovery cost. Who are the right people? Consider employing at least a project leader, manager and technologist to develop the step-by-step plan for responding to discovery requests. Many corporations now have a dedicated discovery team to better control the discovery process, including collection of data, data-processing, document review and production.

If focused, this plan can be created in a few weeks with support from your law firm, vendors and other consultants that fit into the plan. The right plan will provide a repeatable process that encompasses the discovery lifecycle, including the combination of vendors and technology required for each step. Once in place, develop an estimate of your annual budget for discovery, parsing out the individual factors that have an impact on your costs. This baseline provides documentation for the true expected cost of discovery, reflecting the savings achieved through pre-project planning.

Create a review methodology. Once you've developed a plan, it will be critical to create a systematic and defensible methodology that can be tailored to meet the needs of each and every discovery request. If you are having difficulty, consider bringing in a vendor to help identify review guidelines and develop a documented process that includes processing, review and quality control.

Although discovery and its many phases are often depicted as a single, linear process, the fact is that a solid review methodology must be flexible. Key information found during review often affects the review strategy. Consider focusing the early phases of review on key custodians to confirm review criteria, learn additional facts, adjust assumptions, estimate review rates, and prepare an initial budget.

One of the real headaches for corporations is the amount of wasted expense during document review. Despite the many programmatic culling techniques available today, typically more than 80% of the content that is delivered for review is irrelevant to the matter at hand. Much of the potential savings in this process can be found by identifying relevant material and eliminating irrelevant material as quickly as possible. Many corporations are employing a multi-pass review strategy that includes a first-pass triage. During triage, each document is reviewed for relevancy. Irrelevant documents are suppressed from further review and relevant documents are passed downstream as defined by the review strategy.

A more efficient and higher-quality review process can be constructed by putting more experienced resources on only relevant or potentially relevant material. First-pass reviewers will then have an easier job of declaring documents Not Relevant, Potentially Relevant or Potentially Privileged, leaving the more substantive privilege and issue-based determinations for the more experienced second-pass reviewers. This simple step shrinks the haystack of information, and creates a much smaller and focused document set, opening the door to faster review and reduced review fees.

Be active in selecting the right technologies. Corporations are rapidly adopting leading-edge software to better combat the volume of information requiring review. One example commonly employed in a multi-pass review is software enabling a visual and concept-based organization of electronic documents rather than a more traditional “page-by-page” linear approach. This software is proven across multiple examples to effectively and accurately identify relevant documents without having to develop complex search terms. Imagine you are searching for all documents related to someone named Madame X. Using sophisticated technology, the search result shows not only direct matches, but also visually illustrates how Madame X is related to other documents, concepts and individuals in the review pile. Reviewers can then isolate relevant documents, and irrelevant documents can be quickly removed. The result is improved accuracy, reduced review hours and a quick assessment of key information.

Consider these other important functions of a technology:

  • Enables reviewers to get up and running quickly, with minimal training;
  • Makes documents quickly available for review;
  • Keeps documents in native format, eliminating expensive pre-production steps;
  • Offers de-duplication and near de-duplication functionality to safely reduce the volume of reviewed information;
  • Presents a visual interface that en-ables reviewers to easily view document concepts, interrelationships and communication networks against a timeline; and
  • Arms project managers with robust reporting to assess review speed and facilitate quality control.

And, most important, when selecting technology, make sure that you understand the big picture of your purchase. Often, the technology price may be more costly than expected, but consider its impact on the total cost of discovery. One of the biggest mistakes corporations make when selecting technology is to make a decision on cost of technology in a vacuum. What if your new technology could save you four or five times the cost of review? Challenge the technology vendor to justify expense by demonstrating the technology's reasonable expected return on investment.

Invest in project management. It's a fact: Most lawyers do not have extensive project-management training. Due to the sheer volume of most requests and that volume's impact on the review process, project management is a critical component of managing discovery and review. With ongoing tracking of progress and adjusting the review process, you can ensure that your plan is on target and that any deviations from the original plan are quickly brought to the attention of the rest of the team so that adjustments can be made.

You may find it hard to identify a project manager on your legal team. Outsourcing this function can often be a faster way to get started; then, instead of dealing with multiple vendors, officers and parties, your legal team can focus on the legal issues with the added assurance that a consistent process is being managed and enforced.

Implement quality control and metrics. By establishing a quality-control plan and document-review metrics, GCs will have more confidence in the process, and in the results. A quality-control plan ensures that your review strategy is being executed in the manner intended and will answer questions such as, “If I have someone reviewing 1000 documents and she says that 500 are responsive, who's going to check to see if she made the right decisions?” Some methods for achieving quality control include applicable technology, statistical sampling and comparing result sets with those of other reviewers. With quality control in place, a GC can be confident that the review was done correctly.

Valuable details related to electronic-document processing and review can be tracked and measured. As a result, corporations can monitor important metrics to better manage their process. A few key metrics that can help corporations and their law firms better understand the impact of their review strategy are outlined in the accompanying chart.

Conclusion

With the proliferation of e-mail, the document-review phase of discovery will continue to cost corporations billions of dollars for years to come. But a proactive approach to assessing how reviews and investigations are currently conducted by internal staff or outside law firms will begin to shed light on why many current processes are so expensive. It will also present opportunities for organizations to prepare in advance and to be ready with a well designed plan, which will save time and money, instead of personnel finding themselves scrambling to react to the next document-review crisis.

[IMGCAP(1)]



Steven R. Harber http://www.discoverready.com/ New York Law School [email protected] Mike Kinnaman http://www.attenex.com/ [email protected]
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