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Getting Smart About Analyzing Electronically Stored Information
Fast forward to 2007, where e-discovery and its concomitant analysis has become a major component of any discovery request. According to an online article from Law.com, more than 90% of new business records are created electronically, and 40% of them are never converted to paper. In fact, in its End-User Survey & Market Forecast 2006-2010, research firm Enterprise Strategy Group (ESG) found that 42% of respondents state that their organization has been involved in a legal proceeding or regulatory inquiry that necessitated the search for and retrieval of electronic records. e-Mail, in particular, has become a key issue as it's used in nearly every business transaction: negotiating contract terms, settling disputes, acknowledging agreements and finalizing documents.
Further, the problem is only getting worse. Consider the newly amended Federal Rules of Civil Procedure (FRCP), which went into effect last December. Rules 16 and 26 were amended to provide the court with early notice of e-discovery issues. A clear implication of this rule change is that the number of cases and the amount of data subject to analysis and review has increased significantly. According to a 2006 survey by international law firm Fullbright and Jaworski, large U.S. companies are already concurrently managing 556 cases on average, with an average of 50 new disputes emerging each year.
This article takes a step back to evaluate whether efforts to streamline the analysis of ESI data have been effectively applied. My sense is that although the times have changed and methods of communication (Blackberrys, instant messaging, etc.) have become unquestionably more sophisticated, the e-discovery process has stagnated. The legal industry as a whole has been slow to keep up with change. As a result, it's getting harder to justify the cost and time that goes into the antiquated process many have grown accustomed to using.
According to IDC Research, the cost of legal discovery and litigation support totaled $9.7 billion in 2006, and is forecasted to reach $12 billion in 2007. A majority of this cost is the analysis and review of ESI. Without a fundamental paradigm shift to reverse this trend and a streamlined process to analyze and review ESI, costs to enterprises will continue to spiral out of control.
The '80/20 Rule'
So, why is the analysis and review of ESI so expensive? On average, it costs $1,800 to process and prepare data for analysis, and $250 per hour to analyze and review it. The issue isn't about working harder ' it's that we are not working smarter. Of the data analyzed, only 10-20% of that ends up being relevant while a staggering 80-90% is irrelevant and non-responsive to the case. Companies are processing, analyzing, and reviewing entirely too much irrelevant and non-responsive data in a case.
A smarter approach is to avoid spending valuable time and resources analyzing and reviewing irrelevant and non-responsive data. However, until we figure out a way to fine-tune these results, the industry as a whole will continue spending millions of dollars on the problem.
A major source of large e-discovery costs and greater risk stems from the simple search tools and outdated technologies used by companies to sort through the data, identify potential evidence and determine the best case strategy. It's not that the technology doesn't exist ' quite the contrary. One category of technology that works effectively at automating the analysis and review of ESI is called Intelligent e-Discovery.
Intelligent e-Discovery
Intelligent e-Discovery allows legal teams to accelerate early case analysis, rapidly cull-down the data to the relevant documents, and speed up the review process. This type of software is already being used by legal teams at several leading corporations, helping them lower processing and review costs, develop more informed case strategies, and reduce corporate risk. Progressive law firms are using Intelligent e-Discovery by leveraging its power to reduce costs associated with one of their largest and most expensive line items.
At my firm, we use the Clearwell Intelligence Platform to quickly cull-down and visualize relevant data for deeper case analysis. Clearwell analyzes the unique properties of documents and e-mail such as recipients, replies, forwards, CC's and subject headers, then combines the results with organizational data to automatically derive e-mail-specific communication patterns. It shows messages in their proper context, organizing them by discussion threads with visual representations of relationships between events, time and individuals.
Regardless of what technology is used, the biggest advantage of Intelligent e-Discovery is the ability to streamline analysis and review ' arguably the most time consuming and important pieces of e-discovery. The value of conducting thorough e-discovery and analysis cannot be overlooked, as it directly impacts case strategy and the outcome of a case, and influences decisions such as whether to fight versus settle. It enables legal teams to focus on drawing accurate early case assessments, and frees up time to understand the summary of information about the evidence. It also greatly improves the productivity of all remaining electronic discovery activities.
Review and analysis alone are projected to cost enterprises more than $200 million in 2007, representing a significant portion of overall e-discovery costs for U.S. enterprises. Law firms and enterprises that are on top of these e-discovery challenges are implementing a proactive approach, and have learned to give priority to data culling, as it ultimately determines the evidence and data produced for a case. Effective cull-down enables the legal team to drive case strategy and quickly separate responsive documents and privileged data from false positives and irrelevant data; and the review step enables the detailed evaluation of electronic data for relevance and privilege. Advanced contextual review can make a big difference in streamlining your case, replacing the traditional redundant approach of reviewing a single document at a time. Intelligent e-Discovery solutions and processes provide the ability to visually interpret topics, key participants and discussion threads ' for example, most e-mail messages are part of a lengthy chain of conversation, and it is much more efficient to review the entire thread at once, versus one message at a time in random order.
If your firm is considering automating its ESI analysis process, think of the value you will achieve by very quickly and accurately identifying key pieces of electronic evidence, focusing on the most relevant data in a particular case, and making more informed decisions about the outcome of many cases.
Eric Rosenberg has been in the high-tech industry for 13 years and currently serves as Chief Information Officer at Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP. Not long ago, the pain of analyzing electronically stored information (ESI) for legal e-discovery, regulatory inquiries, and corporate investigations was hardly a blip on the radar screen. The requests were far and few between and, significantly more time was spent chasing down memos tucked away in filing cabinets than worrying about a handful of innocuous electronic documents. e-Discovery was in its infancy, and the costly and labor intensive process of sifting through and analyzing documents simply wasn't worth re-thinking given the low volume of cases and data that needed to be reviewed.
Fast forward to 2007, where e-discovery and its concomitant analysis has become a major component of any discovery request. According to an online article from Law.com, more than 90% of new business records are created electronically, and 40% of them are never converted to paper. In fact, in its End-User Survey & Market Forecast 2006-2010, research firm Enterprise Strategy Group (ESG) found that 42% of respondents state that their organization has been involved in a legal proceeding or regulatory inquiry that necessitated the search for and retrieval of electronic records. e-Mail, in particular, has become a key issue as it's used in nearly every business transaction: negotiating contract terms, settling disputes, acknowledging agreements and finalizing documents.
Further, the problem is only getting worse. Consider the newly amended Federal Rules of Civil Procedure (FRCP), which went into effect last December. Rules 16 and 26 were amended to provide the court with early notice of e-discovery issues. A clear implication of this rule change is that the number of cases and the amount of data subject to analysis and review has increased significantly. According to a 2006 survey by international law firm Fullbright and Jaworski, large U.S. companies are already concurrently managing 556 cases on average, with an average of 50 new disputes emerging each year.
This article takes a step back to evaluate whether efforts to streamline the analysis of ESI data have been effectively applied. My sense is that although the times have changed and methods of communication (Blackberrys, instant messaging, etc.) have become unquestionably more sophisticated, the e-discovery process has stagnated. The legal industry as a whole has been slow to keep up with change. As a result, it's getting harder to justify the cost and time that goes into the antiquated process many have grown accustomed to using.
According to IDC Research, the cost of legal discovery and litigation support totaled $9.7 billion in 2006, and is forecasted to reach $12 billion in 2007. A majority of this cost is the analysis and review of ESI. Without a fundamental paradigm shift to reverse this trend and a streamlined process to analyze and review ESI, costs to enterprises will continue to spiral out of control.
The '80/20 Rule'
So, why is the analysis and review of ESI so expensive? On average, it costs $1,800 to process and prepare data for analysis, and $250 per hour to analyze and review it. The issue isn't about working harder ' it's that we are not working smarter. Of the data analyzed, only 10-20% of that ends up being relevant while a staggering 80-90% is irrelevant and non-responsive to the case. Companies are processing, analyzing, and reviewing entirely too much irrelevant and non-responsive data in a case.
A smarter approach is to avoid spending valuable time and resources analyzing and reviewing irrelevant and non-responsive data. However, until we figure out a way to fine-tune these results, the industry as a whole will continue spending millions of dollars on the problem.
A major source of large e-discovery costs and greater risk stems from the simple search tools and outdated technologies used by companies to sort through the data, identify potential evidence and determine the best case strategy. It's not that the technology doesn't exist ' quite the contrary. One category of technology that works effectively at automating the analysis and review of ESI is called Intelligent e-Discovery.
Intelligent e-Discovery
Intelligent e-Discovery allows legal teams to accelerate early case analysis, rapidly cull-down the data to the relevant documents, and speed up the review process. This type of software is already being used by legal teams at several leading corporations, helping them lower processing and review costs, develop more informed case strategies, and reduce corporate risk. Progressive law firms are using Intelligent e-Discovery by leveraging its power to reduce costs associated with one of their largest and most expensive line items.
At my firm, we use the Clearwell Intelligence Platform to quickly cull-down and visualize relevant data for deeper case analysis. Clearwell analyzes the unique properties of documents and e-mail such as recipients, replies, forwards, CC's and subject headers, then combines the results with organizational data to automatically derive e-mail-specific communication patterns. It shows messages in their proper context, organizing them by discussion threads with visual representations of relationships between events, time and individuals.
Regardless of what technology is used, the biggest advantage of Intelligent e-Discovery is the ability to streamline analysis and review ' arguably the most time consuming and important pieces of e-discovery. The value of conducting thorough e-discovery and analysis cannot be overlooked, as it directly impacts case strategy and the outcome of a case, and influences decisions such as whether to fight versus settle. It enables legal teams to focus on drawing accurate early case assessments, and frees up time to understand the summary of information about the evidence. It also greatly improves the productivity of all remaining electronic discovery activities.
Review and analysis alone are projected to cost enterprises more than $200 million in 2007, representing a significant portion of overall e-discovery costs for U.S. enterprises. Law firms and enterprises that are on top of these e-discovery challenges are implementing a proactive approach, and have learned to give priority to data culling, as it ultimately determines the evidence and data produced for a case. Effective cull-down enables the legal team to drive case strategy and quickly separate responsive documents and privileged data from false positives and irrelevant data; and the review step enables the detailed evaluation of electronic data for relevance and privilege. Advanced contextual review can make a big difference in streamlining your case, replacing the traditional redundant approach of reviewing a single document at a time. Intelligent e-Discovery solutions and processes provide the ability to visually interpret topics, key participants and discussion threads ' for example, most e-mail messages are part of a lengthy chain of conversation, and it is much more efficient to review the entire thread at once, versus one message at a time in random order.
If your firm is considering automating its ESI analysis process, think of the value you will achieve by very quickly and accurately identifying key pieces of electronic evidence, focusing on the most relevant data in a particular case, and making more informed decisions about the outcome of many cases.
Eric Rosenberg has been in the high-tech industry for 13 years and currently serves as Chief Information Officer at
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