e-Discovery Evolved: 2011 DIY Discovery Trends

Both law firms and corporations appreciate the benefits of retaining some segments of the e-discovery process in-house. As the survey reflects, 86% of corporations and law firms conduct some aspect of e-discovery internally. On one hand, many corporations (72%) reported that they conduct the collection/preservation stage of the EDRM in-house. Corporations clearly have knowledgeable IT personnel and sturdy IT infrastructures already in place. By leveraging these capabilities, corporations can realize significant cost savings ' especially when it comes to preserving and collecting data.

On the other hand, a majority of responding law firms (76%) reported tackling the review phase of EDRM in-house. Unlike corporations, law firms maintain adaptable labor forces ' most times by partnering with a discovery provider specializing in document review ' that are capable of efficiently reviewing large amounts of information. By partnering and reassembling existing personnel into ad hoc document review teams, law firms are able to slash discovery related expenses for the clients they serve.

Taken as a whole, an overwhelming majority of organizations are conducting some phase of e-discovery in-house (whether it is early data assessment, production or anything in between). This willingness to directly manage e-discovery represents a significant change from the past decade's notion of outsourcing all things e-discovery to service providers or law firms. Further, this finding reveals the importance of a flexible environment that allows firms to in-source EDRM steps. Today, the crux of efficient e-discovery hinges on whether a particular e-discovery solution enables a corporation to apply its core competencies, fostering fluidity between in-sourced and outsourced steps and reducing any discontinuity that may arise.

2. Law Firms and Companies Are Reluctant to Host Data

Despite the increasing propensity to bring discovery in-house, 51% of corporations and law firms remain reluctant to physically host their data, making data hosting the primary e-discovery function that is outsourced. This trend is not surprising, as data hosting internally demands a high level of commitment from any entity. Not only would an organization seeking to move data hosting in-house need to spend significant upfront capital on IT expenditures, but it would be also tasked with maintaining security and a staff of capable personnel to maintain the infrastructure. For many companies and law firms, hosting data in-house is implausible because their capabilities do not overlap with the intense demands required to do so.

3., 4. Law Firms and Organizations Look to
Different Factors and Different Personnel When Deciding to DIY

When deciding whether or not to conduct DIY discovery, law firms and corporations consider several different factors. The top two factors that law firms look to are data volumes and production levels. Corporations, however, make the in-source versus outsource decision primarily based on data types and staffing constraints. Moreover, law firms and corporations disagree over who decides whether to bring discovery in-house. While 90% of in-house counsel and IT staff state that the corporation is the primary decision-maker, 43% of law firms say it should be their decision, not the clients'. Differences in e-discovery tools and processes between law firms and their corporate clients are driving this discrepancy, as each party seeks to leverage its own technology investments or support, established processes or provider
relationships.

Corporations and counsel should engage in proactive self-assessment to determine whether an entity should be conducting one or more EDRM functions in-house. Decision-makers should revisit the old SWOT analysis (Strengths, Weaknesses/Limitations, Opportunities, and Threats) and put it to use ' sound analysis of an organization's unique strengths and capabilities is a fundamental step in deciding whether a particular EDRM task should be in-sourced. Decision-makers should then compare and contrast these organizational competencies against the different demands of particular EDRM functions. For example, entities should consider whether IT has the knowhow to manage information and expeditiously ensure preservation, whether in-house counsel has the labor resources to take on document review, and whether ironclad logistics and proficient litigation support or paralegal teams will be able to support processing and production.

Finally, organizations that are currently hosting data should scrutinize whether this process is better suited for an external provider. Officers, IT and counsel should consider the potential cost savings and security benefits of outsourcing this critical and resource-intensive step. An accurate and informed internal analysis is a necessary first step in selecting the right DIY tool to maximize fluidity, minimize expenses and boost control.

Important Considerations After the Decision to DIY Discovery Has Been Made

5. Purchasing the Right DIY Discovery Tool

After a company has decided to DIY, the next step involves choosing the right discovery tool. The top three factors weighed by firms seeking to purchase a DIY tool are ease of use, data security and compatibility with existing investments. These findings reflect the notion that clients do not want to suffer downtime or discontinuity because a tool is difficult to use. Additionally, clients want to ensure that their data is properly supported and secured and maintain the ability to leverage existing investments and resources.

6. Making the Switch from DIY to an Outside Provider

Situations may arise where a law firm or corporation conducting DIY discovery must make a mid-project transition and engage an outside provider. The two leading factors that compel organizations to make this switch are increased complexity (44%) and increased data volume (32%). Other factors that may trigger a mid-project switch include a change of deadline, change in budget or discovery of new data sources.

Picking the right DIY discovery tool is an important decision for all entities, but it is also important for organizations to consider how they are going to successfully address cases that require additional expertise and assistance. As a result, organizations need to consider a DIY tool provider with the ability to provide outside support in the event that DIY discovery becomes overly complex or time-consuming. This can save significant time and costs when transferring data to a third-party external provider.

Unfortunately, there is no “one-size-fits-all” method to determine when to use DIY discovery tools and when to consult an outside service provider or law firm expert. Each company needs to reflect on the unique nature of its matters, tolerance for risk and resources to perform the work. Several key factors should be considered when making these decisions, including existing staffing resources, infrastructure and technology, level of internal data security, annual e-discovery volume, forecasted e-discovery complexity, and desired level of control and compatibility.

Moving to the Cloud

7. Comfort in the Cloud

Not only have companies and law firms explicitly expressed concerns regarding disjointed EDRM technologies and physically hosting data in-house, but these organizations have also emphasized a common desire to avoid these pitfalls altogether by moving to the cloud.

Companies and law firms are becoming increasingly comfortable storing information for e-discovery purposes in the cloud. According to the survey results, 46% of companies and 37% of law firms indicated that they were comfortable storing data or conducting e-discovery in the cloud. Cloud solutions are extremely flexible and globally available; further, they are revolutionizing the way organizations conduct business.

8. Lingering Cloud e-Discovery Concerns

Although corporations have expressed a willingness to leverage software as a service (SaaS) or cloud solutions, some concerns still remain. Primary concerns for leveraging the cloud among law firms and corporations include data security and privacy. This finding reemphasizes the importance of finding a provider that will communicate and work with you to design a solution that best fits your company.

With the ability to leverage economies of scale, SaaS providers are often able to provide unrivaled levels of data security. However, security needs should still be assessed. Organizations should validate storage capacity, data center security, user profiles and authentication, and monitoring and penetration testing. Companies and law firms seeking to join the majority of organizations already implementing cloud solutions should evaluate available options, assess security risks and evolve their organizations' e-discovery approach accordingly.

Furthermore, according to market analyst firm Gartner, cloud-based computing will be more secure than what most organizations have today. By 2015, Gartner predicts security is not going to be number one on the list of cloud-computing concerns. (“Why Cloud Computing Will Be More Secure Than What You Have Today.” Neil MacDonald, VP & Gartner Fellow)

9. Cloud e-Discovery Will Increase

The overwhelming majority of survey respondents plan to take advantage of cloud solutions in the near future. Among those surveyed, 80% indicated that they plan to use cloud solutions in the next two years.

Gone are the days of a one-size-fits-all approach to discovery. Corporations and law firm counterparts are putting the evolution of e-discovery to work for them. New technology options make this evolution possible, promising faster, less expensive and more defensible results.

Conclusion

In the end, market dynamics continue to drive the need for more end-user control throughout the EDRM. Companies are plagued by a difficult economy, opaque expenses and too many disjointed EDRM outsourcing options. As recently stated by an industry analyst with analyst firm IDC, “[There] is a key progression in the eDiscovery market as providers look for ways to evolve their current offerings to meet the changing needs of in-house counsel and their law firms. As basic business applications find permanent homes in the cloud, it is only a natural progression for the legal technology industry.” (IDC, “Kroll Ontrack Announces Verve for DIY Discovery.” Vivian Tero, November 2011.)

Justin Hu is director of product development for Kroll Ontrack. In this capacity, he provides oversight and leadership to cross-functional teams in managing the launch of new Kroll Ontrack products and services.

By now, most corporations and law firms understand the complexities and realities of eDiscovery, and many organizations are re-examining their e-discovery processes and tools to gain efficiencies and reduce costs across the Electronic Data Reference Model (EDRM). With more options than ever before, litigation support professionals, lawyers and IT staff are grappling with these questions:

• Can my organization better manage costs and increase control over discovery by bringing e-discovery tools in-house or in-firm?
• Which components of the EDRM are best insourced or outsourced?
• Under what circumstances should my organization avoid insourcing e-discovery?
• What are the risks and benefits of cloud-based e-discovery?

e-Discovery is constantly evolving, and if organizations are standing still, they are losing ground. To take the pulse of the market, Kroll Ontrack collaborated with an independent company to conduct a survey of 100 Fortune 1000 corporations and 100 medium- to large-sized firms in September 2011. Nine findings emerged, providing insight into what aspects of discovery organizations are conducting themselves; what factors are weighed when making this decision; when organizations opt to enlist help from an outsider provider; and where companies stand with respect to joining the cloud movement.

Making the Decision to In-Source or Outsource
e-Discovery

1. Law Firms and Organizations Are Conducting a Substantial Amount of e-Discovery In-House

Both law firms and corporations appreciate the benefits of retaining some segments of the e-discovery process in-house. As the survey reflects, 86% of corporations and law firms conduct some aspect of e-discovery internally. On one hand, many corporations (72%) reported that they conduct the collection/preservation stage of the EDRM in-house. Corporations clearly have knowledgeable IT personnel and sturdy IT infrastructures already in place. By leveraging these capabilities, corporations can realize significant cost savings ' especially when it comes to preserving and collecting data.

On the other hand, a majority of responding law firms (76%) reported tackling the review phase of EDRM in-house. Unlike corporations, law firms maintain adaptable labor forces ' most times by partnering with a discovery provider specializing in document review ' that are capable of efficiently reviewing large amounts of information. By partnering and reassembling existing personnel into ad hoc document review teams, law firms are able to slash discovery related expenses for the clients they serve.

Taken as a whole, an overwhelming majority of organizations are conducting some phase of e-discovery in-house (whether it is early data assessment, production or anything in between). This willingness to directly manage e-discovery represents a significant change from the past decade's notion of outsourcing all things e-discovery to service providers or law firms. Further, this finding reveals the importance of a flexible environment that allows firms to in-source EDRM steps. Today, the crux of efficient e-discovery hinges on whether a particular e-discovery solution enables a corporation to apply its core competencies, fostering fluidity between in-sourced and outsourced steps and reducing any discontinuity that may arise.

2. Law Firms and Companies Are Reluctant to Host Data

Despite the increasing propensity to bring discovery in-house, 51% of corporations and law firms remain reluctant to physically host their data, making data hosting the primary e-discovery function that is outsourced. This trend is not surprising, as data hosting internally demands a high level of commitment from any entity. Not only would an organization seeking to move data hosting in-house need to spend significant upfront capital on IT expenditures, but it would be also tasked with maintaining security and a staff of capable personnel to maintain the infrastructure. For many companies and law firms, hosting data in-house is implausible because their capabilities do not overlap with the intense demands required to do so.

3., 4. Law Firms and Organizations Look to
Different Factors and Different Personnel When Deciding to DIY

When deciding whether or not to conduct DIY discovery, law firms and corporations consider several different factors. The top two factors that law firms look to are data volumes and production levels. Corporations, however, make the in-source versus outsource decision primarily based on data types and staffing constraints. Moreover, law firms and corporations disagree over who decides whether to bring discovery in-house. While 90% of in-house counsel and IT staff state that the corporation is the primary decision-maker, 43% of law firms say it should be their decision, not the clients'. Differences in e-discovery tools and processes between law firms and their corporate clients are driving this discrepancy, as each party seeks to leverage its own technology investments or support, established processes or provider
relationships.

Corporations and counsel should engage in proactive self-assessment to determine whether an entity should be conducting one or more EDRM functions in-house. Decision-makers should revisit the old SWOT analysis (Strengths, Weaknesses/Limitations, Opportunities, and Threats) and put it to use ' sound analysis of an organization's unique strengths and capabilities is a fundamental step in deciding whether a particular EDRM task should be in-sourced. Decision-makers should then compare and contrast these organizational competencies against the different demands of particular EDRM functions. For example, entities should consider whether IT has the knowhow to manage information and expeditiously ensure preservation, whether in-house counsel has the labor resources to take on document review, and whether ironclad logistics and proficient litigation support or paralegal teams will be able to support processing and production.

Finally, organizations that are currently hosting data should scrutinize whether this process is better suited for an external provider. Officers, IT and counsel should consider the potential cost savings and security benefits of outsourcing this critical and resource-intensive step. An accurate and informed internal analysis is a necessary first step in selecting the right DIY tool to maximize fluidity, minimize expenses and boost control.

Important Considerations After the Decision to DIY Discovery Has Been Made

5. Purchasing the Right DIY Discovery Tool

After a company has decided to DIY, the next step involves choosing the right discovery tool. The top three factors weighed by firms seeking to purchase a DIY tool are ease of use, data security and compatibility with existing investments. These findings reflect the notion that clients do not want to suffer downtime or discontinuity because a tool is difficult to use. Additionally, clients want to ensure that their data is properly supported and secured and maintain the ability to leverage existing investments and resources.

6. Making the Switch from DIY to an Outside Provider

Situations may arise where a law firm or corporation conducting DIY discovery must make a mid-project transition and engage an outside provider. The two leading factors that compel organizations to make this switch are increased complexity (44%) and increased data volume (32%). Other factors that may trigger a mid-project switch include a change of deadline, change in budget or discovery of new data sources.

Picking the right DIY discovery tool is an important decision for all entities, but it is also important for organizations to consider how they are going to successfully address cases that require additional expertise and assistance. As a result, organizations need to consider a DIY tool provider with the ability to provide outside support in the event that DIY discovery becomes overly complex or time-consuming. This can save significant time and costs when transferring data to a third-party external provider.

Unfortunately, there is no “one-size-fits-all” method to determine when to use DIY discovery tools and when to consult an outside service provider or law firm expert. Each company needs to reflect on the unique nature of its matters, tolerance for risk and resources to perform the work. Several key factors should be considered when making these decisions, including existing staffing resources, infrastructure and technology, level of internal data security, annual e-discovery volume, forecasted e-discovery complexity, and desired level of control and compatibility.

Moving to the Cloud

7. Comfort in the Cloud

Not only have companies and law firms explicitly expressed concerns regarding disjointed EDRM technologies and physically hosting data in-house, but these organizations have also emphasized a common desire to avoid these pitfalls altogether by moving to the cloud.

Companies and law firms are becoming increasingly comfortable storing information for e-discovery purposes in the cloud. According to the survey results, 46% of companies and 37% of law firms indicated that they were comfortable storing data or conducting e-discovery in the cloud. Cloud solutions are extremely flexible and globally available; further, they are revolutionizing the way organizations conduct business.

8. Lingering Cloud e-Discovery Concerns

Although corporations have expressed a willingness to leverage software as a service (SaaS) or cloud solutions, some concerns still remain. Primary concerns for leveraging the cloud among law firms and corporations include data security and privacy. This finding reemphasizes the importance of finding a provider that will communicate and work with you to design a solution that best fits your company.

With the ability to leverage economies of scale, SaaS providers are often able to provide unrivaled levels of data security. However, security needs should still be assessed. Organizations should validate storage capacity, data center security, user profiles and authentication, and monitoring and penetration testing. Companies and law firms seeking to join the majority of organizations already implementing cloud solutions should evaluate available options, assess security risks and evolve their organizations' e-discovery approach accordingly.

Furthermore, according to market analyst firm Gartner, cloud-based computing will be more secure than what most organizations have today. By 2015, Gartner predicts security is not going to be number one on the list of cloud-computing concerns. (“Why Cloud Computing Will Be More Secure Than What You Have Today.” Neil MacDonald, VP & Gartner Fellow)

9. Cloud e-Discovery Will Increase

The overwhelming majority of survey respondents plan to take advantage of cloud solutions in the near future. Among those surveyed, 80% indicated that they plan to use cloud solutions in the next two years.

Gone are the days of a one-size-fits-all approach to discovery. Corporations and law firm counterparts are putting the evolution of e-discovery to work for them. New technology options make this evolution possible, promising faster, less expensive and more defensible results.

Conclusion

In the end, market dynamics continue to drive the need for more end-user control throughout the EDRM. Companies are plagued by a difficult economy, opaque expenses and too many disjointed EDRM outsourcing options. As recently stated by an industry analyst with analyst firm IDC, “[There] is a key progression in the eDiscovery market as providers look for ways to evolve their current offerings to meet the changing needs of in-house counsel and their law firms. As basic business applications find permanent homes in the cloud, it is only a natural progression for the legal technology industry.” (IDC, “Kroll Ontrack Announces Verve for DIY Discovery.” Vivian Tero, November 2011.)

Justin Hu is director of product development for Kroll Ontrack. In this capacity, he provides oversight and leadership to cross-functional teams in managing the launch of new Kroll Ontrack products and services.