Legal Services Investment in the UK - A Bellwether for the United States?

Mitt Regan, Co-Director of the Center for the Study of the Legal Profession at Georgetown University Law Center discusses new financial models for law firms - CLICK HERE

An interesting discussion regarding the coming changes to the UK legal market that will allow for "alternative business structures" enabling non-lawyers to take on a management or ownership roles in law firms.

eDiscovery Management In-house

eDiscovery Moves In-House - Article on Law.COM Click Here 

The article hyperlinked above, and the panel discussion it references, demonstrates the evolving role that in-house counsel is playing in eDiscovery.

A few key points are highlighted in the panel discussion.

• Cost optimization through review provider segmentation.
• Reducing the amount of ESI on both the left and right sides of the Electronic Discovery Reference Model.
• Information governance challenges with social networking.
• Combating fear, uncertainty and doubt by sharing information between in-house and outside counsel.

I would like to make a few points and ask a few questions about each point that I hope will spawn further conversation.

First, let’s analyze the idea of cost optimization in a review exercise.  When it comes to the review provider segmentation piece, they seem to focus primarily on offshore LPO options for the lower-tier work.  In other words, for documents that are potentially irrelevant or are tangential at best, they seem to prescribe an offshore attorney as the best medicine. Then, for documents that are potentially responsive to document requests but are not necessarily germane to the issues or potentially privileged, you would use contract attorneys or paralegals. And finally, of course, for the documents that are truly relevant, you would use associates. This kind of intelligent triage requires a fairly sophisticated project management strategy and, maybe even more importantly, a technology that will allow you to properly identify these categories throughout your review process.  Have you, your counsel, or your project managers organized a review in this manner?  Do you frequently use offshore LPO services as suggested in the article and do you pay $10-$25 per hour for those services? One of the largest issues that I have seen in my cases is that this sort of process engineering, even when implemented, has not reduced a large portion of the redundant work done on "second-level review" (the review typically completed by the law firm after an LPO or outside provider has been engaged) or reduced the amount of time spent on fact development. In fact, using an LPO often leads to a greater emphasis on second-level review because of a general mistrust for the first level of review. Even with this redundancy (i.e. the relevant documents being reviewed two, three, or four times), there is still significant cost savings to be garnered by using the resources that are best suited to each level of work.

The next question is ‘what is the goal of document review’?  It appears that eDiscovery vendors, attorneys, specialists, and luminaries tend to focus on document production. But, document review is also necessary to establish facts, learn about the case, and create a narrative for your future arguments. Why is this not considered in the EDRM spectrum? And, are associates properly trained for "fact development"? Is it their highest and best use? The practice of applying facts to law is ingrained within lawyers but are they the best resource to assemble a fact pattern? In criminal law outside investigators are often hired to establish the facts of a matter, not just the associates. So, when looking at the process of document review, we need to think in a much broader context than just document production. Even if we review documents for production purposes, the cost of truly understanding the documents is often much higher than we expect. In a recent Qui Tam case that I worked on, the first-level document review cost was about $3 million and the following second-level review/fact development was $6 million in law firm fees. There has to be a better way to leverage the information learned from the first analysis of the documents so as to curb the need for the detailed scrutiny later on.

Second, in terms of reducing the ESI at the front of the EDRM, has anyone seen a massive, appreciable, or even nominal reduction in eDiscovery cost due to the implementation of in-house systems?  Also, when applying these systems in-house, who operates and manages the software?  The process of taking your search term lists through a Bayesian statistical analysis using sample sets of data is not typically a lawyer’s strong suit, so who is actually narrowing your data pool?  There are logical ways to approach data and easily reduce discoverable volumes, and in-house ECA tools allow you to parse data fairly effectively.  But is that worth the millions of dollars of implementation, management, user, and maintenance fees?  When analyzing your data you can make simple assumptions like, the communications between the executives and the travel department are not key to a patent infringement matter and marketing material that is distributed to the public does not need to be analyzed for privilege.  A sophisticated appliance behind the firewall is not required make these judgments but could be helpful when managing a more complex analysis. I believe that ECA (in some form) is incredibly valuable, but the tools currently on the market are often not applied with a service methodology that allows corporations to properly leverage them.

In terms of the right side of the spectrum, I think that machine-assisted coding is a major boon for eDiscovery cost management.  This value, of course, is predicated on the accuracy of the analysis and the sophistication of the user, but in the right conditions the end result can be quite impressive.   In this area, as mentioned earlier, I think that there is still a growing amount of wasted time and expense in the LPO and law firm relationship.  A key initiative when I was at CPA Global was chiseling away at that issue with my corporate clients.

Social networking within the corporate environment is a huge issue to tackle.  The dissemination of corporate information to public sites represents a major risk to trade secrets, corporate responsibility, and confidentiality.  I have never experienced any real cost burden due to social networking, so I cannot comment on the issue of containment.  Although this is a hot topic, have you actually disclosed large volumes of social network information in a proceeding?  If you have, I would love to hear what challenges you encountered.

Finally, in terms of in-house and outside counsel communication I think that we continue to look at this as a two-way street when the communication architecture has become increasingly complex.  There are eDiscovery consultants, counsel, experts, and vendors.   I believe that there is also an open space for a new kind of provider - one who specializes in the professional services that make up the litigation and investigation process - which I see as representing the majority of the services involved.  This provider would manage all of the information, and subsidiary providers, within the discovery/investigation process and draw on the law firm for only legal advice.  The decision as to what is responsive in a matter should remain the sole province of the managing attorney, but the strategy for collecting, gathering, analyzing and presenting the facts of a matter just doesn't seem to fit that well into a typical large firm's bailiwick.  Project management, process engineering, and fact development are not the practice of law and yet we continue to look to legal advisers for such services.