Last November, Ralph Losey penned a compelling article discussing the “Five Reasons to Outsource Litigation Support” and how the model works well for his firm. He makes some very valid arguments as to why some firms might outsource these services, specifically pointing to issues of core competency, complexity, cost, risk, and ethics. For some firms, outsourcing these services is absolutely the correct answer. However, for many firms (like Reed Smith), keeping select litigation support services in-house, aka insourcing, can provide substantial benefits and cost savings to corporate clients.
In today’s legal landscape, firms are constantly looking for ways to provide quality and value for clients, who are seeking greater predictability and reductions in their legal spend. One area that’s virtually impossible to overlook is e-discovery, which can consume upwards of 18 percent of an organization’s total legal expenditure.
One of the ways Reed Smith has seized this market opportunity is by insourcing e-discovery services within our litigation support department. It has greatly contributed to our goal of offering the reductions and predictability in legal spend our clients seek. We do not internalize every facet of the Electronic Discovery Reference Model; in fact we take a hybrid approach to e-discovery services, utilizing preferred e-discovery vendors to handle heavy lifting and overflow work when necessary. These vendors are an essential extension of our firm’s service model, employing some of the most intelligent folks in the industry. Internally, we’re focused on a few main services that we believe can be done at an equal or higher quality than vendors, and at a lower cost to clients.
Here are six reasons for firms to insource litigation support:
1.Cost savings for clients.Excluding trial, the most expensive phase of litigation cases can be the storage and review of discoverable evidence. These costs are soaring, with no end in sight as companies continue to increase the amount of electronically stored information. In fact, according to a 2011 State Of Storage Survey by InformationWeek, the average annual rate of data growth across all enterprises is 20 percent per year, “and we see a long tail of besieged IT staffs dealing with growth rates exceeding 50 percent.”
To reduce e-discovery storage costs, Reed Smith has invested in a large and robust Relativity environment within our state-of-the-art data center co-located with a leading technology company. As a result, we’re able to provide a much lower-cost hosting option to clients than most vendors, while utilizing a cutting-edge facility. Our facility routinely passes strict security audits conducted by both independent auditors and some of our largest Fortune 100 clients. Along with Relativity, we utilize Equivio to group email threads and perform data analytics. By integrating these two tools, we’re often able to minimize and target the most relevant data in half the time of traditional review methods.
According to a 2012 report from the RAND Corp., approximately 73 percent of e-discovery expenditures can be attributed to document review. Our Records & E-Discovery (RED) attorneys offer creative solutions for combating high review costs. In comparison with the time it takes a traditional contract review team and a secondary team to review documents, our RED team can review the same documents in less time and at a lower cost in one quality pass, with QC. Couple the aforementioned technologies with our highly skilled RED team, and we typically are saving clients 25 percent to 75 percent on document review and hosting costs.
2. Expertise.Many litigation support teams consist of professionals who have a cross section of e-discovery experience in both the law firm and vendor setting. For example, at Reed Smith, our data hosting and processing team handled the same services as e-discovery vendors and other Am Law firms in the past. Additionally, half the members of our litigation support team have vendor backgrounds in e-discovery consulting, project management, and courtroom presentation. Ultimately, this provides a deeper breadth of experience for clients.
Having an internal group that can offer more comprehensive expertise and longevity than a vendor fosters synergistic utility. Our litigation support group doesn’t just follow instructions like many vendors, but instead proactively helps clients tailor more cost-effective e-discovery solutions.
Lawyers can walk down the hall and have in-person discussions with their local litigation support team member about a project, and can converse candidly about legal technology strategy. They do not have to wait for a vendor to assemble its team for a conference call. This saves time and provides peace of mind, pointing back to quality and value.
3. Institutional knowledge.Also important to mention is the institutional expertise of the litigation support team that spawns from working side-by-side daily with a firm’s lawyers in high-pressure situations. It creates efficiencies in a multitude of areas from daily project management through trial preparation and presentation. Internal litigation support teams have a deep understanding of the typical e-discovery project profiles and the historical technology solutions employed across the various practice groups, giving life to internal automation. After all, reducing the amount of manual tasks on a project can reduce risk.
Having a grasp of the various lawyer personalities and work preferences cannot be underestimated. For example, the institutional knowledge litigation support brings from assisting with witness preparation and running the courtroom presentation at multiple trials with the same lawyers further streamlines the litigation process. The litigation support professional has been close to the electronic evidence and exhibits throughout the entire project, and may be able to organize and recall exhibits “on the fly” more effectively than an outside vendor.
4. Trust.Litigation support professionals and lawyers working alongside each other on a daily basis also builds trust. Why is this important? As the rules and technology constantly evolve, it’s nearly impossible for most busy litigators to stay on top of all of the changes. Yet some of the technological marvels that are meant to provide the greatest reduction in e-discovery costs can be the hardest for lawyers to embrace. Take data analytics and predictive coding, for example. Coming from a faceless, often unavailable, vendor, this technology may seem like voodoo magic. However, when presented jointly or endorsed by the same people who have slugged it out with them at trial, or saved their bacon with last-minute production deadlines, it is viewed more openly. One cannot understate the importance of trust.
5. Accountability.Litigation support teams have more at stake than vendors when it comes to accountability on a case. The lawyers they work with are part of the same internal team with the mutual goal of obtaining the best possible outcome for clients. If a mistake is made by a vendor, the vendor may take responsibility, but there is a separation from outside counsel that can insulate them from complete accountability. At the end of the day it’s the firm that may get slapped with a sanction. To be fair, many e-discovery vendors provide high-quality services with the utmost professionalism (Reed Smith partners with several vendors that fit that mold). However, lawyers often find it more difficult to have the same level of confidence in a vendor that isn’t in the trenches with them every day, like their internal litigation support team is. Most firm litigation support teams operate under a slightly different set of expectations. They reside in the same office, walk the same halls and have to face the legal team day in and day out. As a result, there’s an extra incentive to execute at a high level.
6. Vendor management.No matter how many e-discovery services a firm brings in-house, it will always have a need for e-discovery vendors. There are certainly scenarios where a vendor is a better choice for a project: a specialized service (for example, backup tape restoration), a client request, or perhaps a decision based on scope.
Therefore, it’s important for a firm to have a deep understanding of the e-discovery vendor community in order to match the appropriate solution and price to the project. However, it’s not easy to stay current with such a dynamic industry. Hundreds of vendors purport to provide high-quality and defensible e-discovery solutions. In any given year, dozens of acquisitions, mergers and new shops are sprouting up in the community.
According to the 2012 Gartner Magic Quadrant Report, there have been more than 25 major vendor mergers and acquisitions in the past three years, and more than 40 instances of this in the past five years. This doesn’t even take into account the smaller regional instances. Separating the proverbial vendor wheat from the chaff is time consuming. It’s a constant process of evaluating the people, processes and technology utilized by each.
This is an area where an internal litigation support department provides additional utility by managing this continuous evaluation. The end result is an internal guide to e-discovery vendors and technology for the law firm and its clients to leverage.
Follow the Evidence
In this multibillion-dollar industry, many firms have built internal business units to handle e-discovery service segments traditionally outsourced. According to the 2012 Am Law Market Snapshot published by the Cowen Group, 70 percent of firms reported an increase in workload for their litigation support and e-discovery departments. Forty-three percent of firms anticipate adding to their litigation support and e-discovery staff, and 50 percent of firms reported plans to increase their e-discovery technology spend.
Speaking of increased technology spend, in 2012, more than 40 firms licensed kCura’s Relativity document review system, widely regarded as a “best in breed” solution for large-scale document review. This is a significant investment for firms to be making, particularly in a climate where most are cutting costs, and it’s not only relegated to large global firms. kCura reports that firms with as few as 40 lawyers licensed their product in 2012. The 40 firms in 2012 bring kCura’s total to more than 75 firms that have licensed Relativity (50 of the Am Law 200). In addition to kCura’s sales statistics, there were installations of other review platforms within firms: Recommind’s Axcelerate, and Xerox’s Viewpoint, to name a few, further demonstrating the trend that firms are ramping up their in-house capabilities.
While the creation of a team of highly trained staff and the investment in technology may not be for some firms, the evidence clearly shows that many firms are not only continuing to in-source, but are ramping up their investments in technology and people. Of course every firm is different, but there are fundamental business benefits to having a litigation support department for any firm that handles large-scale and/or high-stakes litigation.