Taking Responsibility for the e-Discovery Process

Outsourcing, however, is not without risk. Often, IT consultants do not understand the law, the review team is not intimately involved in the case, and counsel lacks basic knowledge of information systems, affecting their ability to manage the process. Combine all three risks into one case, and you have the makings of a perfect sanctions or legal malpractice storm.

The recent legal malpractice lawsuit filed by J-M Manufacturing Company, Inc. (“J-M Manufacturing”) against the company's lawyers, McDermott Will & Emery (“McDermott”), over the production of 3,900 privileged documents to the federal government in a qui tam investigation highlights some of the risks inherent in outsourcing the e-discovery process. The amended complaint alleges the following relevant facts:

• In response to subpoenas from the federal, California and Tennessee governments, McDermott and J-M Manufacturing identified 160 custodians likely to possess responsive ESI.
• McDermott worked with J-M Manufacturing to collect the custodians' data, and transferred the data to two third-party e-discovery vendors, Stratify, Inc. (“Stratify”) and Navigant Consulting, Inc. (“Navigant”).
• Navigant and Stratify ran search-term and privilege filters through the collection to identify relevant documents and separate out documents protected by the attorney-client privilege.
• After McDermott produced the documents to the federal government, the federal government notified McDermott that a significant amount of the production included non-responsive and attorney-client privileged documents and asked McDermott to conduct a privilege review and resubmit the documents.
• Prior to the second production of documents, McDermott retained contract attorneys from Hudson Global Resources to perform the privilege review. The second production included 250,000 documents, 3,900 of which were later determined to be privileged.
• J-M Manufacturing was later informed that the document production including the privileged documents was subsequently produced to counsel for the whistleblowers, who refused to return the documents, arguing the attorney-client privilege had been waived.

While it is not the purpose of this article to comment on the merits of the case, the lawsuit serves as a sobering reminder that although outside counsel can delegate the tasks of e-discovery to both the client and third-party vendors, the overall responsibility for e-discovery cannot be delegated. The e-discovery process must be defensible at every step, both to the opposition and to the courts regardless of who actually handles the task. Below is a checklist of best practices for both in-house and outside counsel to consider, discuss and monitor throughout the litigation to ensure confidence in the client relationship and the e-discovery process.