In these economic times of continuing pressure on in-house legal departments to reduce costs, many departments are bringing certain phases of the e-discovery process in-house. According to a recent survey of IT, attorneys and litigation support professionals conducted by The Taneja Group, more than half of those surveyed are already performing both collections and issuing legal holds in-house.

Where organizations lag, however, is in moving data processing in-house with only one quarter of the respondents performing this phase. According to the survey, the reasons for continuing to outsource processing are numerous but center on two key issues: (1) Organizations perceive a lack of access to processing technologies, and (2) they lack the functional expertise to perform the processing. Because of this complexity and perceived lack of accessible technology, corporate counsel customarily have relied on outside counsel, service providers, computer forensic consultants and others to perform data processing.

Even as technology has advanced and become more available and cost-effective, in-house counsel have been slow to move away from outsourcing the data processing phase of e-discovery. The time has come to put aside the old ways. The maturity of the available technology has erased all barriers preventing in-house processing and opened the door for organizations to realize significant cost savings and reduced risk.  

Many organizations are beginning to realize that having flexibility in e-discovery processes should include the ability to perform data processing in-house. Where it makes economic sense, corporate counsel are looking to processing as an untapped area for cutting costs. By insourcing data processing, organizations can also mitigate risk, increase consistency across matters and gain more control of the e-discovery process. Looking at the outsourcing fees being paid to outside counsel and third-party vendors, it makes sense for in-house lawyers to consider the cost savings of doing it themselves.

In addition to the cost savings, processing the data in-house keeps the data behind the corporate firewall, helping to maintain better control and safeguards on confidential and/or privileged information. Ultimately, an organization can incorporate the processing of data into its overall records management process and policies, thereby improving efficiency and competency while improving control of its data.

As organizations move forward in bringing processing in-house, they will need to become more proactive in their acquisition of qualified people and technology. According to the Taneja survey, the legal departments surveyed have recognized the increased need for qualified people, with nearly 70 percent adding staff specifically for e-discovery. Where the respondents continue to lag, however, is acquiring the necessary technology. Fewer than 20 percent of those surveyed have purchased e-discovery software. Clearly, a lag in acquiring appropriate technology exists over having qualified in-house people to assist with e-discovery. The benefits of bringing e-discovery processing in-house are maximized only by addressing both people and technology.

Some organizations that have acquired e-discovery solutions likely already have the capability to process data using their existing technology but are not using it. Through the efforts of the qualified e-discovery personnel, organizations should be harnessing that capability. The key to success comes through a collaborative effort between legal and IT. Generally, while IT personnel are trained and qualified to perform in-house processing functions, the scope of the data processing needs to be determined by the legal department. Only through an understanding of the in-house capabilities and limitations by all concerned can in-house data processing be successful.        

What is Data Processing?

The reluctance to acquire processing technology may be due to the perceived lack of availability of the technology. Understanding data processing itself may demystify some of this misperception. At the most basic level, processing serves to reduce the volume of collected electronically stored information (ESI) in a defensible manner to only those documents that should move forward in the discovery workflow.

As ESI became a commonly requested form of discoverable information, the concept of data processing arose. Because the volume of electronic data far outweighed the volume of paper data, the former manual review approach became too cost-prohibitive. Instead, organizations could rely on advanced technology to cull data collections into manageable data sets. That culling, or data processing, took many forms, including the identification and removal of duplicate documents; the reduction of the data based on the content of the document, the metadata of the document or the file type; and the removal of non-relevant documents. However, in-house counsel lacked an understanding of the structure of electronic data as well as the technology used to process it. Already accustomed to using outside parties to review paper documents, they readily passed the task of data processing onto third-party vendors and outside litigation support professionals.   

Risk Mitigation and Cost Savings By In-Sourcing Processing

Insourcing data processing also leads to better risk mitigation. All stages of the e-discovery workflow carry some level of risk. Minimizing that risk through consistent, repeatable, informed and transparent processes is key. Errors in the processing phase can lead to improper production. However, these errors are repairable assuming that the upstream steps of preservation, identification and collection have been competently performed. If an organization keeps these steps as well as processing in-house, it will have more control over, and predictability across, the discovery workflow and, thus, a much easier time managing risk. Additionally, some organizations are resistant to change, preferring to leave data processing to outside vendors and law firms. These organizations fail to realize that insourcing processing mitigates the risk associated with sending documents outside the organization.

Of course organizations must consider the initial expense in human capital and technology costs to bring processing in-house. However, corporate counsel will quickly realize the cost savings derived from minimizing the use of vendors and law firms and increasing their flexibility to address e-discovery data processing in-house.   


As e-discovery continues to become a routine business function, more companies will realize the benefits of bringing processing in-house. Already corporate counsel have embraced insourcing the other stages of the e-discovery workflow, signaling that it is merely a matter of time until processing becomes just another part of a routine internal e-discovery process. Additionally, as in-house counsel become more informed about the various technologies available to them, they will begin to feel more comfortable taking the steps needed to move processing where it belongs—within the four walls of the organization.