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Striking a Balance

Thursday, October 11, 2012

By Stephen D. Whetstone, Pitney Bowes Legal Solutions

Discovering and exchanging documents in connection with a legal case or controversy has long been a tedious process of manually processing and reviewing paper documents. In the 1990's things began to slowly change as electronic documents became more commonplace. Still, even as recently at 2000, the term eDiscovery—electronic discovery—didn't exist.

That changed in 2006, when the Federal Rules of Civil Procedure, which govern how lawyers pursue and defend claims in federal court, were amended expressly to address the unique issues inherent in dealing with digital data. At the same time, there were remarkable advances in legal review technologies as well as several court decisions condemning lawyers and their clients who ignored or destroyed digital data. It all converged to make for a perfect storm and seemingly overnight eDiscovery was born.

Today, eDiscovery can easily exceed one-third of the total cost of a litigation. Yet as integral as eDiscovery has become, law firms and corporate general counsel offices often still struggle for the right solution, or set of solutions, to streamline eDiscovery.

Is the right solution to invest in an extensive eDiscovery system in-house and attempt to scale when large projects occur while continually investing in upgraded technology? Or, is it better to outsource all eDiscovery activities to an expert third-party provider whose sole business is to provide litigation support services and can scale to meet any demand?

More often than not, the answer is balancing between in-house resources and outsourcing, putting the optimum resources on each specific assignment to maximize efficiency and cost-savings.

Striking the Right Balance With a “Best Site” Approach

While some companies and firms have developed their own in-house eDiscovery systems, many sophisticated companies have recently begun to shift back toward more of an equilibrium state where they once again outsource some of the same processes and technologies that they only recently insourced.

Approximately half (48 per cent) of companies insource some of their eDiscovery activities—such as preservation, collection, processing, and review; while a quarter (24 per cent ) outsource certain eDiscovery functions, according to the 6th Annual Litigation Trends Survey published by Fulbright & Jaworski LLP.

These companies and firms realize that they are not really in the business of managing complex legal discovery systems daily. They have their own businesses to think about, and eDiscovery is not a core competency or focus. Their job is to render legal advice and help identify risk, not necessarily to manage all facets of it. So these companies strive to find the right balance in externalizing the cost of hardware, software, personnel and processes while retaining control over them without all the overhead and headaches.

If a matter changes in scope, complexity, or timing, a best site program can quickly adapt …


In essence, this is a “best site” approach. At the same time, outside counsel fees for document review and provider rates for document processing and hosting have plummeted, making it more palatable for in-house counsel to outsource some of it again.

Best site solutions provide companies a tool kit from which they can choose the right people, processes, and technologies for each job. If a matter changes in scope, complexity, or timing, a best site program can quickly adapt, because it is designed to anticipate the fluidity of legal disputes and discovery.

For example, electronic data concerning a typical supplier contract dispute could first be loaded into a firm's on-premises solution. Several boxes of hard copy files also could be scanned onsite, leveraging the firm's copy center capabilities, converted into searchable text (.tiff or .pdf files and then OCR'd), and loaded onto a local network review platform. The firm may elect to manage the copy center itself, or as many firms have, engage a professional third-party company to run the copy, mail, scan, and eDiscovery operations. If the volumes of electronic files or hard copy documents spike significantly or the timetable accelerates, the firm could also leverage the vendor's more robust near-site data centers—still in an entirely consistent, defensible and price-sensitive manner.

Best site solutions optimize eDiscovery resources and are adding value in other areas as well.

eDiscovery Beyond Litigation

Traditional eDiscovery tools are growing in popularity, and non-eDiscovery applications are starting to migrate toward eDiscovery as well. Both are converging around managing customer information and risk.

Advanced eDiscovery applications allow lawyers and their clients to work in highly collaborative and secure cloud-based environments. For example, let's say that five lawyers sit in a Boston office, five more lawyers gather in another firm's New York office, three clients are located in the Midwest, and a couple of lawyers are on the road getting ready to take depositions in California. They all want to access parts of the same core data set and share information with one another without revealing all of their activities. They can do that with a collaborative, cloud-based solution for processing and reviewing data.

Companies are now taking the same kinds of technology and using it to index and collapse information to better process and manage mortgage applications, health insurance claims, and telephone subscriber applications in the ordinary course of business. These companies have huge volumes of data, and they need to understand what they have and take action on it.

In addition, there's a growing interest in records and information management. It's fueled by a desire to know where active and dormant information lives, so that it can be easily located if it's needed for litigation or ordinary business reasons.

Right-balancing eDiscovery

The acceptance of the business need for eDiscovery has really been defined in the last five years. Managing eDiscovery is evolving to where there is even greater cooperation among companies, law firms, and third party providers to establish practical, cost-effective, legally defensible and actionable programs to manage big-data challenges.

The fundamental goal is much the same across the board: driving down legal eDiscovery costs and risk by reducing the size of a company's data universe prior to litigation. Right-balancing the insourcing and outsourcing of eDiscovery is a compelling way for companies to drive down those costs, improve accuracy and create repeatable transparent processes.

Stephen D. Whetstone, Esq., is Vice President and Leader of Pitney Bowes Legal Solutions. Stephen has written many papers on legal discovery and technology developments and best practices, which have appeared in, prominent national and international publications, and he is also a frequent speaker at conferences and CLE programs on legal discovery developments and best practices.

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