Under mounting cost pressures, corporations and law firms are increasingly “in-sourcing” certain aspects of e-discovery using do-it-yourself (DIY) and service provider choices now available in the marketplace. How does an enterprise determine if it can better manage costs, increase control over discovery, and handle in-sourced technology and talent with these options? Which aspects of e-discovery are best left to outside counsel? What is the right mix of in-sourcing and use of outside counsel?
Jonathan D. Rudolph, eDiscovery Manager and Staff Attorney, C.R. Bard
eDiscovery is a major cost for many industries and a necessary component, especially for highly regulated industries. Many companies have taken to bringing eDiscovery in-house in an attempt to keep costs down. Beyond financial reasons, the business value to doing this is having hands on access to data and the belief that you understand your company better than an outsourced lawyer does. But is that really the case? Let’s find out.
Sanjog: Welcome listeners, this is Sanjog Aul, your host and the topic for today’s conversation is, “Is ‘DIY’ or ‘Do It Yourself,’ eDiscovery right for you?” I have with me Jonathan Rudolph, eDiscovery manager and staff attorney at C.R. Bard. eDiscovery is truly non-core, but it still is an important function which is critical for business. So what would make a compelling business case to justify bringing eDiscovery activity in-house?
Jonathan: Well actually, eDiscovery is a core requirement for companies that are heavily regulated, like the healthcare industry. And so, it’s something that you need to really look at your bottom line, in terms of what you’re spending every year because it’s a required component. You have to factor this into your budget. So if you’re spending high six or seven figures on your eDiscovery costs every year, it’s really time to start taking a look at what you can do to bring those costs down. If there’s a lot of litigation, you absolutely have to consider bringing some of your eDiscovery in-house.
Sanjog: Is there another business case to be made other than bringing the cost down?
Jonathan: For larger corporations, the primary concern is financial. But there are other concerns that you have to deal with: whether or not you want or have better access and insight into the data that you have regarding your cases, what is my pre-case assessment of where I can go with this, and what do I have to worry about? Some companies are trending more towards – we want to have hands-on access to our data so that we know at all times where we are at. We don’t want to rely on outside counsel to tell us what they think is important when we know better what is or what is not.
You have to make sure that your different departments are on the same page and that they are all involved in the process. You can’t have IT going out without the law department or the law department going out without the IT department to pick solutions.
Sanjog: Now with that said, how should an organization prepare for DIY eDiscovery? What if you were starting from scratch? What would differ if you already had a process in place?
Jonathan: Well, the first thing that you need to do is, you have to make sure that your different departments are on the same page and that they are all involved in the process. You can’t have IT going out without the law department or the law department going out without the IT department to pick solutions. The second that you have one going out on its own, you are not going to wind up taking into account the needs of the other department, there’s going to be resentment, there’s going to be in fighting, and it’s going to be very difficult to try to implement something.
So the most important thing is to make sure that everybody is on the same page. To that end, you really need somebody who speaks both languages. The advantages that I have had, is that I am a lawyer by degree, I spent a lot of time as a civil litigator. I have also spent a lot of time in the tech industry so I understand what both needs are. So having somebody who can really help to bridge the gap is the first thing that I think you have to have when you are starting to put a process together.
When you are dealing with something that’s starting from scratch, it’s a little easier because there are no preconceived notions of things. It’s much easier for the person who is acting as that liaison to tell both sides what they need to do rather than to get one side to conform to what the other side either already has or says it needs. IT can be notoriously difficult in trying to get their cooperation because they view any kind of attempt to tell them what to do as an incursion on their territory. And that does create its own set of problems. The second thing that you need to do is you have to evaluate what kind of resources you need from a human point of view. Does it make sense to bring anything in-house because it’s going to cost you more in salary than it is to outsource? Those two things together are the most important things you need to have.
if you’re spending high six or seven figures on your eDiscovery costs every year, it’s really time to start taking a look at what you can do to bring those costs down. If there’s a lot of litigation, you absolutely have to consider bringing some of your eDiscovery in-house.
Sanjog: What would be different if you already had something outsourced and place and now wanted to bring eDiscovery in-house?
Jonathan: I think it maybe a little easier once you have something that’s already in place and that you’re trying to fine tune it, because you have a better sense of the costs that are involved and the primary goal is going to be to bring the cost down. So you have some kind of a benchmark to work down from, whereas if you’re starting from scratch, nobody knows what the cost is really going to be. You then have to worry about setting the bar too low and then going over that.
So if there’s something that’s already in place, you can say, “Okay, we know how much time and how many man hours are going into the review of our data, because we see the billing, we’re on the outside contract and we know how many hours they’re spending. Is it feasible to hire enough people to do that level of review, at the same or lower cost?” So I think rather than starting from scratch, it’s easier to start when you have something that’s already in place. The only thing that becomes a sticking point is trying to get both sides to work together because they’re already used to working independently.
Sanjog: If you speak about people, process and technology as the three elements on which success with respect to eDiscovery rests on, do you think there are any standards, benchmarks, blue prints or Holy Grails that you think can be put in place upfront that will allow you to go through a predictable path versus finding your way as you move along?
Jonathan: The Holy Grail is going to be where you don’t have to have a person putting their eyes on anything until you get to a privilege review. There are solutions that are out there now called predictive coding. I don’t think that it’s quite at the stage where you can abandon any kind of real human intervention. But as far as standards go, everybody does their own thing. There’s nothing where there is a handbook that says how you want to go about setting things up.
Some people prefer keywords, some people want contextual searches, some people want somebody doing this manually from top to bottom. There is no real consensus of what the proper way to do this is, and that’s evidenced by all the different solutions that are out there. They’re not all the same. If they were all the same, then you would know that everybody sort of agrees on what needs to be done. The landscape is changing. From the court opinions that are coming down, that is driving some of the technology, and people are scrambling to catch up. So you have to look to the organization itself and see what makes most sense for the individual organization as it relates to; are you regulated, what is your budget, how many people do you have that can work on this? It’s really more of a one off basis now that it is standardized.
Sanjog: If you bring too much in, maybe you do not have the ability to deliver, and yet if you leave too much out, then why in the first place did you even start the DIY process? So should everything be brought in-house, and if not, which elements would it be best to outsource?
Jonathan: My emphatic answer is no. You do not want to bring everything in house, and the reason for that is really a process of scale. With our services right now, we’re able to outsource to a company that has an entire staff of attorneys. At the rate at which they’re being charged, we can have 20 attorneys looking at documents that if we had to pay salaries, with all the intended expenses, maybe we can hire three people to do the same thing. You’re not going to get as good a level of review because the people who are doing it that you have outsourced, this is what they do.
They know what to look for; they’ve been properly trained, assuming you vetted the company properly. But these companies are all, for the most part, using actual attorneys as opposed to bringing in people who might have experience within a particular industry. So you absolutely should not be in-sourcing the substantive review of documents. The things that you should be in-sourcing rather are the types of things where you can do initial culling. You don’t want to outsource things that everybody recognizes do not belong in a produced set. You can do that yourself with in-house processing.
You want to be able to do initial culling with basic keywords and things of that nature. You don’t need a lot people looking at that. You know what you can get rid of and you know what is relevant to the case. That’s something that you want to bring in-house. You’re looking initially at a set of maybe a million records to two million records, and the cost to go through that large set, if you can cut that one way down, you’re going to cut costs. And the thing that I’ve been finding from other people who are in similar positions that I’m in, it’s the initial costs that they’re trying to bring down quickly. Because they find that if they can cull a particular set down, they don’t necessarily have to send out an entire set for review. They can create subsets that they can also review in house because they will get the other side to focus on a particular set of keywords, and it will make the actual review process much less burdensome on whoever is going to be doing it within the organization.
Sanjog: So is a selective in-sourcing what you recommend? If yes, then what is it would you leave out?
Jonathan: The only things that I would consider absolutely unconditionally outsourced would be the actual detailed review. That’s once you get past an initial culling section where people are actually looking at the content to determine whether there is some type of relevance to whatever the discovery demand is. You have a substantial set of eyes that are going to be looking at that. You’re not going to get people who are burning out the way that you would as if you’re trying to do this on in-house basis. They are less likely to make mistakes, and if you try to bring this in and have people within the company do it, you also have accountability. That should not be discounted. If somebody does something and you wind up getting sanctioned for either missing things, not producing things, mislabeling things, it’s nice to be able to know that somebody outside your organization is accountable for that. Once you bring that in-house, the responsibility falls on you and you really don’t have anywhere to look to try to undo the problem once you somehow try to recoup some of the costs that are associated with it.
Sanjog: Now when it comes to technological innovations in eDiscovery solutions or processes, which ones would you say show more promise in terms of making DIY a practical undertaking for the organizations?
Jonathan: Anybody who is using solutions that are solely based key words, I think you’re way behind the curve. It’s outdated, it’s inefficient, and I don’t think that you’re going to wind up complying with the expectations that the courts have in terms of what you’re supposed to produce in response, at least, in the federal courts to rule 26. So you need to have solutions that are going to allow you to do things that will apply contextual analysis. So some of what that might entail is, I don’t need to know every single email that’s gone to or from the CEO if he’s involved in something. It may be that I only want to look at the emails that go between him and somebody in research and development or between him and the CFO, and you want to be able to restrict things not just on a simple Boolean “and” or a simple Boolean “or”. You want to be able filter by date.
You want to be able to filter by whether something was attached, or was it attached and was it encrypted but it shouldn’t have been? Those are the types of things that when you bring a solution in house, it will enable you to have a much better review and a much better handle on what your specific data is. Don’t rely just on the keyword. Relying on the keywords will do nothing but frustrate the people who are involved, take a long time to get through and in the long run, I think increase your costs.
Sanjog: Do you think that technological innovations or the very technology institutions that are being offered today are still missing the mark in terms of making the organizations comfortable and bringing things in-house and still be able to produce the desired results?
Jonathan: I think they’re getting much, much better based on what I saw at Legal Tech this year. A lot of the companies are beginning to understand that you can’t do keywords. They have cluster analysis, they allow you to take a look at terms and phrases and the frequency with which they appear , with respect to other terms and add in factors like, who is it going to? When did it get sent? What is the location? Was it going internally or was it going externally?
And also, the things involving predictive coding are getting much better, that’s where you are taking documents and you are feeding it into the program to say, this is the type of stuff that I’m looking for. You go through successive iterations until everybody agrees so that it’s picking out the documents, types of documents that you want and it’s excluding the things that we don’t want to see. That aspect of the technology I think, within the next 12 to 18 months, is going to start being spot on as opposed to having, you know, the significant number of false positives that may currently return.
Sanjog: Finally what is your message to the technology leaders who are supporting the eDiscovery process and for that matter going to help support the Do It Yourself eDiscovery process?
Jonathan: I think what people need to start doing is that they need to be proactive rather than reactive. I think that’s the key for having a successful eDiscovery program. Rather than trying to put out fires or do one offs every single time something comes in, if you can go into a 26F conference and have an entire package that says, “Look, these are terms that we use in these types of cases, this is how many documents it’s going to return, we’ve already done a privilege review, the only thing that we have to do between now and when the last time we did this, is run update off of the new information. We’ve already done the old information.”
The advantage that that gives is there was a case back in January or February of this year where the plaintiffs had agreed to something like that with the defendants, and the defendants produced what they said they were going to produce. Later on, the plaintiffs came back and said “You know what; we’ve got some additional acronyms that we want to search”. And the defendants were able to successfully fight that off saying, “You didn’t object. We told you what we were going to do and for the slight incremental value of something that you might possibly find, the cost isn’t warranted,” and the court agreed.
So I think that if you go in on a proactive basis, you don’t have to keep reinventing the wheel. You bring the wheel to them and you tell them, “Look if you want it modified, you tell us how and why.” I think the move should be away from defensibility to justifiability. I’m telling you what I’m doing and why, and you tell me why it shouldn’t be done that way. And I think that’s where the trend ought to be, for people to be able to bring their costs down and be more successful in the long run.Less