Despite a desire to modernize their e-discovery operations, most companies are holding off on leveraging cloud technology for internal efficiencies and cost savings, according to Zapproved’s 2018 Corporate E-Discovery Benchmark Report, a survey of 185 corporate e-discovery professionals.
A slight majority of respondents, 54 percent, said streamlining e-discovery operations is a top priority for their company, while 41 percent said the same for reducing e-discovery costs.
However, over a third, 37 percent, of companies still outsource document review, while 30 percent outsource data processing. Such outsourcing can be operationally burdensome for legal departments, who need to send data outside their organization, and more costly than bringing such operations in-house.
Rebecca Sprynczynatyk, senior director of marketing at Zapproved, noted that on average, “the cost to send a small project outside is exacerbated by the fact that most service providers have minimum cost requirements for projects.”
Public companies were more likely to outsource document review than privately held companies, though both outsourced e-discovery for most personal injury, products liability and class action cases.
“It’s pretty stacked by level of complexity,” Sprynczynatyk said. “Easy matters tend to be managed in-house, while more complex and higher risk matters tend to be outsourced more frequently.”
Still, Sprynczynatyk noted that many companies are also outsourcing matters they can handle more cost effectively in-house. “If you dig into other types of e-discovery projects that are being sent out, a lot of them are really small low-risk matters like contract disputes and internal investigations.”
Companies outsourced document review for a variety of reasons, but those who had cloud-based platforms were more capable of reviewing documents internally than those with on premise, legacy e-discovery solutions.
For example, while 19 percent of companies with on-premises solutions said a barrier to in-sourcing document review was a lack of staff, only 11 percent of those with cloud solutions said the same. Likewise, almost twice the number of those who use on-premises solutions noted budget was a barrier to reviewing documents in-house, compared with those who used cloud solutions.
For Sprynczynatyk, using cloud technologies is a key way legal departments can cut costs and modernize e-discovery. But the survey found that a majority of respondents still used legacy e-discovery solutions. Asked why cloud platforms were not more prevalent, Sprynczynatyk said it was an “awareness issue.” She explained that many in legal may not understand how cloud systems work and the potential benefits they can bring.
In addition, she noted that traditionally, in-house legal teams are more circumspect when it comes to novel technologies, because of security and data handling concerns. “Legal teams are not always ready to jump off the cliff with the new technology available to them.”
To be sure, there are other reasons legal teams may not be moving their e-discovery operations to the cloud. Companies need to make sure they have the appropriate level of IT staff managing in-house cloud deployments to mitigate the data loss risks. And for some, building out such a staff can be costly.
What’s more, while the data security protections of some large third-party cloud providers, such as Google, Microsoft and Amazon.com Inc. can surpass a company’s own protections, other smaller cloud providers may not be able to properly secure data stored on their servers.
Kevin Broyles, co-founder and managing partner at FisherBroyles, previously told Legaltech News that “sometimes there are real security needs that can’t be met” by smaller providers.
It may take companies some time, therefore, to become comfortable moving their e-discovery operations to the cloud. So while e-discovery efficiencies may be possible, their adoption isn’t entirely without barriers.