It’s no secret that e-discovery is a resource and capital-intensive business. As data continues to grow in size and complexity, counsel must ask themselves what aspects of their current workload could be conducted more efficiently and cost-effectively using new or different approaches. As such, organizations are increasingly taking a hard look at how to optimize their in-house expertise, e-discovery cost structure and process efficiencies with third-party e-discovery support.

The Shared Services Model

One model organizations are increasingly looking to is the managed services model, in which an organization outsources day-to-day management of e-discovery responsibilities as a strategic method for improving operations. This model recognizes that optimal results can be achieved when legal team members use their best talents for case strategy and substance, and day-to-day management of e-discovery tasks is outsourced. This model yields greater efficiencies and ensures work is done at the appropriate level with the appropriate resources: the law department drives the strategy; the outside counsel directs the approach; and, the e-discovery provider executes the process and provides the technology infrastructure and software for review–via its private cloud–along with data collection, processing, production and project management services.

Many organizations, however, choose to keep some e-discovery tasks inside their corporate firewall, but outsource other tasks to augment existing infrastructure and talent. Taking this approach, organizations may use their own technology for upstream e-discovery tasks such as preservation, collection and early case assessment, then outsource review tasks–and possibly the review itself. Conversely, they may utilize in-house technology to manage day-to-day matters and outsource matters that stretch internal capabilities. The legal department might also engage professional services on a case-by-case basis to augment its own resources.

This combination of insourcing and outsourcing is known as the “shared services” model, which allows for flexibility based on each organization’s investment preferences, resources, time and case-specific parameters.

The Benefits of Sharing the Workload

The business benefits of the “shared services” model for litigant organizations include:

Reduction in CapEx and OpEx. By outsourcing some or all technology required to conduct e-discovery tasks, organizations can avoid the expense of investing—and reinvesting—in technology as it continually evolves, while taking advantage of cost and process efficiencies offered by new technology.

On-demand access to resources. Legal departments can access the most appropriate resources for the task, on-demand, quickly filling in gaps when and where needed. Such expertise may include statistical and linguistic expertise for culling, strategic search and technology-assisted review projects, project management professionals, or e-discovery specialists skilled in the design and management of e-discovery processes.

Scalability. Often, matters start out small but can morph into large matters as new information about the case unfolds. The “shared services” model allows organizations to scale up as necessary, without new investments in headcount, hardware and software to support the matter.

Transparency and predictability. Organizations need defensible processes that can address a range of matters across the enterprise. However, inefficiencies often surface when managing multiple law firms across multiple matters. E-discovery providers can – importantly – help incorporate the law firm’s procedures with the client’s internal ones to centralize and align processes, gain efficiencies and ensure compliance with the organization’s policies.

Selecting the Right E-Discovery Services Model

A number of factors influence the model a legal department selects: litigation profile – the types, frequency and volumes of matters; IT capabilities and infrastructure maturity for e-discovery technology; the availability of appropriate resources; financial and operational limitations; and, an organization’s overall outsourcing strategy. Based on an assessment of each factor, organizations may choose to fully insource e-discovery processes (including technology), outsource most or all tasks, or share the work with the hybrid “shared services” approach that optimizes existing IT infrastructure and resources.

Best Practices

Regardless of whether e-discovery tasks are “shared” or completely outsourced, when providers take on an organization’s discovery tasks, the internal and external teams must work in tandem, collaborating at each stage of the project to ensure success – or risk consequences. (See Peerless Industries, Inc. v. Crimson AV, LLC, in which the defendant failed to oversee the vendor’s work in the production process, and was sanctioned for its “hands-off approach” and for placing “the burden of compliance on an outside vendor.” Also see Brookfield Asset Management, Inc. v. AIG Financial Products Corp., in which the court reinforced the “need for counsel for a producing party to keep a watchful eye over their e-discovery vendors” after the inadvertent production of privileged text that had been redacted.) Both illustrate the importance of teamwork between the organization and the provider, including real-time reporting and visibility into the process.

Armed with knowledge of the different models, criteria by which to evaluate them and best practices, organizations can, in conjunction with their e-discovery providers, create the most suitable model.