Taking Control of e- Discovery In-House

New Technology and New Thinking

For corporate legal departments, tools that are accessible from both a cost and usability perspective have great appeal, especially when dealing with large volumes of data. Innovative technology options (e.g., true-SaaS or true-cloud software) offer flexibility, visibility and power over the workflow of the corporate legal department ' giving legal teams more flexibility over the discovery process and allowing them to address data growth challenges. According to Gartner, “Digital data growth pushes more data through each stage of the e-discovery process. In some cases, it breaks the threshold of technology capacity. To be able to scale, especially during the collection and processing stages, is increasingly important.” See Gartner, Inc., Critical Capabilities for E-Discovery Software, Jie Zhang, Garth Landers, 6 October 2015.

Look for affordable, easy-to-use tools that support the automation of legal holds and early case assessment, enabling law departments to implement defensible processes for preservation and to develop preliminary case strategies. Automating legal holds can reduce the timeline for preservation, provide defensibility in the form of reporting, audit trails and periodic reminders, and reduce the barriers to user acceptance through making it easy for custodians to acknowledge their duty to preserve. Legal hold tools also support matter management by providing a single-instance file or document that includes all matter custodians, relevant ESI and date ranges for preservation in each matter. Early case assessment tools allow both corporate law departments and their outside counsel to quickly identify the most critical data, evaluate the relative strength or weakness of a case, and use that information to create winning matter strategies.

Nonetheless, technology adoption is not the holy grail of insourcing discovery. New thinking about the overall workflow is required. An intelligent discovery approach is highly pragmatic and can amplify insourcing's control over cost and efficiency. The steps of the discovery workflow should be clear, well documented, and simplified to the core work, empowering legal teams to reduce risk and litigation costs through best practices in each step.

Take the Path of 'Intelligent Discovery'

The task of e-discovery is made exponentially more complex and costly as a result of the sheer number of software, communication and storage technologies, as well as new Internet of Things (IoT) devices that perpetually record and store electronic data. In fact, companies are keeping much more data because storage is so cheap ' making it more difficult to access and to find the right data quickly to respond to a litigation request. “Intelligent Discovery” is a modern approach that helps corporate legal teams manage these challenges. It has emerged from the recognition that traditional e-discovery approaches are becoming unsustainably expensive and outmoded for today's e-discovery challenges. Intelligent Discovery relies on three critical ingredients: 1) defensibly preserving in place; 2) collecting only what you need when you need it; and 3) leveraging scalable computing to dramatically reduce time and cost with hyper-efficient data processing so that counsel can instantly access key data for immediate insights.

Preserve in Place Defensibly

Investing in sound preservation practices is the first step to Intelligent Discovery. Corporate legal teams can proactively define the scope of discovery and establish a defense against sanctions by demonstrating that the policies, procedures, tools, personnel, training and lines of communication in place, promote sound preservation.

Real-world examples of failure to properly preserve data are numerous and have resulted in very significant financial penalties. In 2002, Goldman Sachs, Morgan Stanley, Salomon Smith Barney, Deutsche Bank Securities and U.S. Bancorp Piper Jaffray each agreed to pay $1.65 million in fines to the SEC, NYSE and NASD for violating e-mail record-keeping requirements. See “SEC, NYSE, NASD Fine Five Firms Total of $8.25 Million for Failure to Preserve E-Mail Communications.” Securities and Exchange Commission, 3 Dec. 2002.

In 2006, Morgan Stanley offered to pay $15 million to resolve an investigation by U.S. regulators into its failure to retain e-mail messages, according to a regulatory filing. See Reuters, “Morgan Stanley Offers $15M Fine for E-mail Violations,” Computerworld, 14 Feb. 2006.

In 2007, NASD fined four Fidelity-Affiliated broker-dealers a total of $3.75 million for improperly maintaining NASD registrations, as well as for supervision and e-mail retention violations. See “NASD Fines Four Fidelity-Affiliated Broker-Dealers $3.75 Million for Registration, Supervision and Email Retention Violations,” FINRA News Release, 5 February 2007.

In 2008, Qualcomm was ordered to pay opposing party Broadcom's attorney fees and litigation costs totaling $8.6 million based on failure to properly manage records and e-mail retention. See “Court Sanctions Qualcomm $8,568,633, Orders Certain In-House and Former Outside Counsel to Participate in 'Case Review and Enforcement of Discovery Obligations' Program, and Refers Investigation of Possible Ethical Violations to California State Bar.” Web blog post. E-Discovery Law. K&L Gates, 8 Jan. 2008

Workflow Tip

All electronically stored information (ESI) should be preserved in place and data should only be collected if data volatility or higher risk of spoliation requires it. Preservation processes must be repeatable and consistent in order to demonstrate the routine practice. Legal hold communications should be targeted specifically to custodians, clear to understand, timely and easily accessible. For defensibility, it's also important that corporate legal teams document the preservation steps taken, send periodic reminders and follow up on non-responders. Perhaps most important for companies is the need to invest in training and standard policies, thus creating a “culture of compliance” within their organizations. With consistent application of such processes, corporate legal departments can mitigate the costs and risks associated with inadequate preservation practices and improve the predictability of outcomes.

Collect Only the Data You Need When You Need It

The 2015 update to Rule 26(b)(1) crystalizes the concept of reasonable limits on discovery requiring common sense and proportionality. The Intelligent Discovery approach supports the court's aim of encouraging both proportionality and cooperation, advocating that legal teams collect only when necessary using a targeted method. More and more, law departments are shifting their focus from a “collect everything” strategy to one oriented towards targeted initial collection. Instead of collecting entire mailboxes for custodians, these groups are focusing on an iterative process using analytics and concept searches to generate more effective lists that can be approved by both defense counsel and opposing counsel.

In one recent instance, outside counsel's initial request for full mailbox collection across eight custodians for a 3.5-year period would have returned 3.5 million e-mails. After shifting to an iterative approach, the revised, targeted search resulted in 12,500 e-mails being collected and processed, avoiding processing of 3.4 million e-mails. Not only does this iterative process reduce the time needed to access and produce data, but it also results in a significant cost savings.

Let's do the math: At 15,000 e-mails per 1 GB of data, 3.5 million e-mails equates to 226GB of data. At an average cost of $200 per GB to process, the resulting e-discovery processing costs would be approximately $45,000. Further, even if e-discovery processing and de-duplication could reduce the data population by 70%, the cost to have 1 million e-mails reduced would be an additional $800,000 based on a reviewing speed of 60 documents per hour at a rate of $50/hour using contract attorneys via managed vendor review.

Workflow Tip

Assess early to better prepare for required meet-and-confer sessions, and negotiate a fair and reasonable scope of discovery. The ability to employ a targeted and phased collection strategy hinges on a sound and effective preservation program ( see “Preserve in place defensibly,” above). Use the right technologies for the task. Modern collection technologies simplify the process and enable remote collection with minimal business disruption. When collecting from cloud-based repositories, take advantage of cloud-based collection technologies. These enhance the process and avoid the need to move data to your local network. Track all steps via a detailed audit log that shows chain of custody, and a forensically sound collection methodology. Documenting the rationale for decisions made during the collections process could also become a necessity, should it be challenged in court.

Use Technology to Make Data Processing Efficient

In light of exponential data growth, e-discovery processing has become unsustainably expensive. Since it's often outsourced, it is a huge opportunity for legal teams to dramatically save time and reduce costs. One major challenge, however, is having the appropriate resources to meet the company's processing needs. Many organizations fear investing in on-premise infrastructure due to fixed capacities, exorbitant fees, lack of predictability and the IT expertise that is generally required.

Workflow Tip

Leveraging true-cloud computing to conduct early case assessment in-house eliminates wasteful workflow because you are doing it yourself hyper-efficiently. Imagine the typical process where processing is outsourced. Often, legal teams rely on IT to collect and prepare the data for export for review by outside counsel. Eliminate the wasteful process and the endless waiting on others to access and collect the data, and process the data. Instead, teams can do it themselves using the flexible power of true-cloud, that scale processing capacity to need ' transforming processing time from weeks to hours.

Expedite Review Through Instant Data Access

Earlier access to data means earlier understanding of the relative strengths and weaknesses of data in the matter to develop case strategies. These critical strategies all start from understanding data at the earliest stages of the matter and then developing appropriate game plans before even engaging with opposing counsel at meet-and-confer sessions.

Workflow Tip

Increase review efficiency by bringing data processing in-house and adopting technologies that are fast, flexible and simple enough for anyone to use. By putting hyper-efficient processing in the hands of legal, corporate counsel can eliminate steps in their processing and get access to their data instantly.

Conclusion

Most cases settle before they ever go to trial. While organizations will find that there is no magic discovery solution out there, there are intelligent choices that will improve their approach. Legal teams that invest in software that has the ease and flexibility to meet current and future challenges will find better returns on their investment. Additionally, teams that focus on the fundamentals of the Intelligent Discovery in their workflows will successfully address their discovery challenges as they seek to bring discovery in-house. Intelligent Discovery rewards legal teams with direct control over the process, saves time and money, and defensibly stands up to scrutiny if challenged.

Brad Harris is VP of Products for Zapproved. He has more than 30 years of experience in the high technology and enterprise software sectors. Brett Tarr serves as Counsel, Litigation & E-Discovery for Caesars Entertainment and leads the e-discovery, information governance, and privacy functions for the organization.