Michael Boland
A few years ago, many corporations would leave the heavy lifting of e-discovery to outside counsel and vendors. Additionally, many of those outside counsel firms would do the same, playing more the role of a broker than a participant. But, increasingly, both corporations and law firms are creating structured groups or departments to effectively handle e-discovery.
These e-discovery groups are being defined and organized into different models, running the spectrum from fully outsourced to fully insourced, and any number of hybrid approaches in between. This article will help corporate legal departments and law firms determine what model is best for their organizations and point to some common stumbling blocks in each.
For years, companies and law firms have leveraged vendors to a high degree to deal with e-discovery issues, process and technology. Corporations would often rely on their law firms to point to reputable vendors for e-discovery services. Law firms would have existing relationships and often get preferred pricing, which clients could leverage. As time progressed, corporations started interjecting themselves into the process. Now, it is not uncommon for larger corporations to have a preferred vendor list or require outside counsel to use vetted e-discovery vendors where the corporation has negotiated national or preferred pricing. But as access to technology grows, so too has the extent to which corporations are willing to dive into the e-discovery pool.
As e-discovery technology companies have expanded sales efforts, software is now being purchased and leveraged within the walls of corporations. Additionally, law firms are bringing in-house more pieces of technology in an effort to limit the reliance on vendor services. Both instances are allowing the organizations to control a larger percentage of the overall workflow and cost. This evolution has occurred for one main reason: the need to control costs associated with e-discovery.
The latest trend is to charge or hire a person in the organization to create outright an e-discovery group where none existed, to revamp an e-discovery group or litigation support group, or leverage existing resources to find solutions to e-discovery. As a result, directors of e-discovery are an emerging role in larger corporations and law firms.
When creating or revamping an e-discovery group, the first step is to assess what type of model you are using and what type of model you want to be using. What type you currently use should be easy enough to determine. List all the technology and people you have in place and determine how much of the overall process your corporation or law firm is involved in from legal hold to trial. It should fit in one of the following models (discussed in more detail below): outsourced, insourced or hybrid. An actual pen-to-paper process is recommended; you may be surprised by the results.
To determine what model you would like to be using, or should be using, first requires an examination of your goals. For instance, if you are building a group for a corporation, do you want increased access to technology? Risk mitigation? To develop skill sets within staff? To decrease costs or increase efficiency? The same questions apply for law firms, but they should ask these additional questions: Do you want the e-discovery group to be a pass-through cost to clients, a profit center, a cost of doing business? Will it be a marketing tool? Additionally, ask some questions about your organization: What does your litigation profile look like? What is your annual e-discovery spend?
The first thing to keep in mind is that no one model is the right one and no model will be the same from one organization to the next. The trick is finding the right one for your organization. Additionally, build flexibility into the model so it can mature and develop. It is not uncommon for a model to mature and change over time. One that started as a fully outsourced model may become more and more insourced as technology is adapted and understood or the skill set of your people grows and changes. This is why it is important to clearly outline your goals and keep an eye toward achieving those goals.
Once the leg work has been done, you can then look to choosing what type of model will work best for your organization. There are three broad bucket categories that you can fit all e-discovery groups into. This is really a sliding scale from a fully outsourced model on the left-hand side to a fully insourced model on the right-hand side. The hybrid model captures the middle ground. The following is an examination of the characteristics of each model and some of the pitfalls within each to watch out for.
Outsourced Model
A fully outsourced model means an organization will rely on vendors for virtually all services. Legal hold management will be done by one vendor; enterprise collection and forensics work will be done by vendors specializing in this area; processing of data, analytics and culling, hosted review and production will typically be done by another vendor; trial support services and graphics will be done by yet another vendor.
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Bradley Davis
I find it amusing that law firms and corporations are once again trying to insource features and functions beyond the scope of their legal and/or corporate practices. Firms act as if this is something new, or that the technology aspects of electronic discovery give more credence to insourcing. However, the issues with insourcing are the same and still do not point to this being the best solution. Even law firms and corporations with regular ESI needs pipelined from multiple locations face the issues of economies of scale, labor/HR, process improvement, defensibility and more. Why would you want your employees potentially testifying as to their methodology, etc.? As a law firm, are you engaging in the practice of law or are you an e-discovery vendor? Many law firms that attempted to insource e-discovery have since outsourced it again due to the above factors. And, with cloud security increasing and the likelihood that firms can use a DIY process along with the cloud in the future to defray the high costs of IT associated with bringing ESI in house, insourcing is roundly not a good idea (with perhaps a few very large multinational corps as exceptions for the next year or two only).
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