If a matter is small enough, Jackson Lewis associates will do the document review, and if the matter is too large, Kroll's document review center will handle it, Losey said.
"The big mistake law firms make is that they don't understand the complexity of e-discovery," Losey said. "There's such confusion and muddiness. Law firms should do what they are supposed to do and the only thing they have a license to do, honestly. That is legal services."
Losey said most e-discovery work is legal advice, something vendors aren't allowed to provide.
Many firms that bring the e-discovery process and technology in-house say they can offer clients cheaper rates through leveraging that work across their client roster. But Losey said he was surprised to find out that by leveraging all of the firm's buying power on one vendor, Jackson Lewis was able to charge less than what its litigation support department was charging, which he said was already below traditional vendor prices.
That was a pleasant surprise for Losey, who was hoping to be able to divest the firm of nonlegal e-discovery work.
"I believe a professional organization whose job it is to do e-discovery is always going to be better than a department in a law firm because that's not what we do," Losey said.
While Losey said many people disagree with his approach and feel only a law firm could provide its clients with the best quality, he said that was "naive." He said firms don't realize how good vendors have become and the special treatment they will provide firms that hand over their entire e-discovery portfolio.
"I'm telling you from experience, it's more trouble than it's worth," Losey said of insourcing e-discovery business.
But from the perspective of firms such as WilmerHale and Morgan, Lewis & Bockius, it has been worth doing just that.
Going All-In
Stephanie A. "Tess" Blair heads up Morgan, Lewis & Bockius' 70-person eData practice group in which the firm has insourced the entire e-discovery practice.
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John Connor
Mr. Losey and Ms. Blair are both incorrect. First, relying upon one vendor for a national or international law firm is usually only efficacious for the bean counter from the home office who sourced the exclusive contract. Hamstringing your entire firm to work under one vendors practices and procedures is like fitting a round peg into a square hole and engenders many unhappy lawyers/support staff with an inevitable effect on their clients. At recent panels the consensus from law firms and corporate counsel is that the best approach is to have at least two approved vendors the firm has vetted from which individual lawyers or practice groups can choose. In contrast to Mr. Losey's opinion this actually produces the highest cost savings as firms compete against each other PLUS must maintain high quality in order to retain business. In a single vendor model the only incentive for quality is when the contract is up for renewal. Firms like Paul Hastings have confirmed this practice by cancelling their exclusive arrangement with Kroll in favor of multiple approved vendors.
Second, Law firm insourcing/horizontal integration may seem profitable in the short term but client pressure plus defensibility will inevitably change this practice. Law firms have gone through the same cycle when photocopying was introduced and again when document scanning to CD became prevalent. Because e-discovery is currently more technical, law firms view this as an acceptable compliment to their practice. Clients will eventually ask them whether they are in the practice of providing legal service or litigation support services instead. Further, most firms that tried bringing e-discovery in house have since abandoned this practice and begun outsourcing again. Morgan, WilmerHale, Foley and the few others to stubbornly retain this profit center idea will likely change in the future.
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