Survey Finds That E-Discovery Presents Significant Management, Cost Challenges

By Michael Greene

Sept. 30 — In-house attorneys are reporting challenges in handling large volumes of data, indicating there is room for improvement when evaluating their organizations' e-discovery management effectiveness, according to a forthcoming survey by BDO Consulting.

The survey, which was completed by 100 senior in-house counsel and is scheduled to be released in late October, found that corporate counsel gave “internal and external resources a grade of 6.5 out of 10 for overall effectiveness.”

Critical Factors

Participants were asked to “identify the critical factors impacting their e-discovery process,” and almost half (48.4 percent) identified “understanding the universe of potentially responsive evidence early in the case” as most important.

In a statement e-mailed to Bloomberg BNA, Stephanie Giammarco, a partner with BDO Consulting, said this factor is crucial to e-discovery because “[i]t sets the stage for the planning process—from resource allocation, to timeline, to technology, to budget. Failing to understand this early can significantly impact the effectiveness and cost of the entire e-discovery process.”

Predicting the total cost of e-discovery (15.6 percent), reducing e-discovery review fees (14.1 percent), and the ability to use previously collected and processed electronically stored information (ESI) for other matters (12.5 percent) were the next most-critical factors impacting the e-discovery process.

Management Challenges

Corporate counsel also discussed challenges they expect to face in managing e-discovery, and 22.5 percent said “managing mobile and social networking data is the number one issue they will face in the near future, followed by cost control (17.5 percent), new regulations (15 percent) and automating processes (12.5 percent).”

When asked why social and mobile networking data might present a significant challenge in the near future, Giammarco cited the lack of management control over this data. “There are nuances that must be considered when it comes to preserving and extracting this type of information, and many companies are still working to determine the policies and procedures that will enable them to navigate this new data frontier.”

In response to some of the challenges presented by e-discovery, 31.4 percent of in-house counsels reported “implementing new guidelines or policies within the past year to streamline and improve their response to litigation. One in four (25.5 percent) say they have adopted tools and technologies, while 15.7 percent say they have hired an outside vendor.”

“Corporate counsel are under significant cost pressure. While implementing new tools and technologies can result in significant efficiencies and cost savings on the back end, the investment can be hard to justify on the front end,” according to Giammarco. “We expect to see more technology adoption in the coming years as increasing volumes and variety of data forces companies to reevaluate how they approach e-discovery.”

The innaugural “Inside E-Discovery Survey by BDO Consulting”was completed by in-house counsel at U.S. corporations. A majority of responding companies (81.5 percent) reported revenues of more than $100 million.

To contact the reporter on this story: Michael Greene in Washington at mgreene@bna.com

To contact the editor responsible for this story: Ryan Tuck at rtuck@bna.com

A link to BDO's press release is available at http://www.bdo.com/news/pr/3434.