Inside eDiscovery

Will we play by the Rules?: 2015 Amendments to the FRCP

In Just Follow the Rules! FRCP Amendments could be an eDiscovery Game Changer, Jennifer Brennan of iDS interviews the Hon. John M. Facciola (Ret.) and the Hon. Mary M. Rowland in a very thorough exploration of how the impending changes to the Federal Rules of Civil Procedure (FRCP) will impact practice and process. In particular, iDS’s “FRCP Amendments at a Glance” graphic is very informative as we move closer to a new stage in the development of eDiscovery best practices, standards and rule-making.

The Burgeoning Business Cost of E-mail

In Jennifer Booton’s recent article, Don't Send another E-mail until you Read this, she explores the growing cost of eDiscovery for corporate America while attributing a windfall to law firms. While the information may be appropriate and informative for a “mainstream” publication like MarketWatch, Booton’s focus on law firm profits is dated and ignores how technology is impacting the traditional law firm model.

In the early years of eDiscovery, profits in big law may have been significant because practitioners integrated the process into its hourly rate structure. However, the same technology that made e-mail (or other means of electronic communication) a revolutionary, cost-cutting communication tool is now forcing law firms to evolve in search of efficiency. In the broader legal technology industry, we are still feeling the impact of this symbiosis as firms adjust to meet client needs and expectations and consultants/technology vendors develop to satisfy a growing trend toward outsourcing and managed services.

While I don’t question Booton’s numbers or general premise, I do feel that it is inappropriate to attribute an eDiscovery “bonanza” to law firms in 2015.

Show me the Money – Are Contract Attorneys Commodities?

The simple answer is, “of course” and as commodities, their value is determined by the market.

It should come as no surprise that legal practice has changed dramatically in the past twenty years. However, a recent article (link below) in Washington Lawyer struck a shocked, revelational tone when describing both the temporary attorney market as well as the work usually performed by contract attorneys.

https://www.dcbar.org/bar-resources/publications/washington-lawyer/articles/january-2014-contract-lawyers.cfm

The context of the article ignores how the legal services industry has evolved in a few ways;

• The practice of law increasingly bears little resemblance to our legal education and we should not assume that our only value is in “fighting the good fight” like Oliver Wendell Holmes or Clarence Darrow
• The practice of law is driven by numbers (bill rates, BSR’s, realization rates, etc.) and a highly competitive market mixed with a challenging economy have been catalysts for increased focus on the business of law
• The development of technology and resultant explosion of eDiscovery has forced law firms (hopefully) to rethink billing and value and strategically commoditize their services and portions of their workflow

Typically, contract attorneys are sourced to review documents as part of the discovery process. Although the work is seldom glamorous, it is an essential component to responding to subpoenas, developing case strategy, preparing for depositions and ultimately, understanding your client. No one is well-served by diminishing the importance of this function. However, as eDiscovery and technology evolves and firms and clients develop more cost-efficient strategies for review, contract attorney rates have slowly declined since 2008. The “throw bodies at it” approach is rapidly disappearing. In the same way that first-year salaries have stagnated or declined during the same period and bill rates are more frequently questioned by clients, temporary staffing has taken a hit as firms try and manage cost, competition and process while the market assesses value.

For attorneys joining or working in the temporary market, I would advise a better understanding of the broader eDiscovery sector. Flexing with the market, firms are continually evaluating their discovery resources and permanent positions (and comp) are evolving even more quickly than temporary roles. Although I appreciate the frustration caused by a “contracting” attorney market, it is critical to acknowledge that business decisions are driving the discovery environment. Within the world of document review, if anything, conditions have standardized and firms better understand how to manage the work. Comparisons made to partner compensation, stories waxing poetic about town cars and catered meals and complaints about access to personal technology are easy red herrings that reflect a complete lack of understanding regarding the modern business of law and its challenges.

The content of the article would have been pseudo-provocative in 2004. Ten years later, it is critical for practitioners, clients and vendors to understand that the legal market is transitioning into a services model (following accountancy, medicine, etc.) where value is proven and not assumed. As an industry, we need to reconsider how to assess value and resources and, to stay competitive, we are forced to modernize and adjust to market forces to stay relevant.

Is the Legal Technology Conversation Encouraging a Cart Before the Horse Mentality?

Jeffrey Brandt recently posted an article regarding why lawyers are slow to adopt emerging legal technology and he explores law firm inertia and the likely players who act to impede embracement of technology. The article is available here.

I wholeheartedly agree with Brandt’s underlying premise; firms need to modernize and evolve with the demands of practice. A competitive legal market paired with exploding eDiscovery costs necessitates that that the business of law constantly assess not only how it serves clients but also how it manages internal data. However, as I stated in my summary of LegalTech NY 2014 (available here), legal technology products aren’t created and don’t exist in a vacuum. Technology is powerful but, it is a means to an end and lawyers start with jurisprudence before partnering their client/strategy with a specific process or product.

Focusing on technology decision-makers in firms, Brandt highlights three “suspects” who may be roadblocks to quickly endorsing new products; lawyers, senior management and IT management. Reasonably, each of these cohorts has its own perspective. Expanding on Brandt's list, I would like to include the client as a critical catalyst in the law firm technology conversation. Clients are decision drivers. Client expectations can accelerate the adoption of new technology and conversely, can obstruct it because of cost, fear of the unknown, a lack of education, etc.

The technology equation in law firms is complicated. Layered on top of potentially competing decision-makers is an ever-changing list of priorities that spans one or more invested law firm demographics and includes (in order of importance);

• Versatility – For large firms with diverse clientele, products need to be versatile to fit large and small matters and linear review to predictive coding
• In-house versus Outsourcing – How do firms balance the flexibility and long-term cost of internal solutions with the advantages of up-to-the-moment resources where your costs are a la carte
• Cost to the Client – What are the fees associated with specific products and what cost sensitivities exist from single plaintiffs to financial institutions
• Cost to the Firm – What institutional costs are there (dedicated servers, bandwidth, computing hardware, etc.)? How does the cloud affect cost?
• Functionality – Incorporating the concept of versatility above, is there a “self-service” option, how customizable are interfaces, etc.?
• Cross-border Litigation/Investigation – What tools best support multi-jurisdictional, international matters and their associated issues (data privacy, liability, etc.)?
• User Experience – An intuitive, robust user experience (from document reviewer to back-end analyst)
• Institutional Expertise – Although being technology-agnostic is valuable, firms should be competent with all the products they employ to assure that they are meeting their responsibilities to the client
• Brand – Reputation and tenure in the market is significant. A vendor who has evolved with the market more likely proves itself as viable
• Customer Service – Often the vendor/client breaking point, the project management component of eDiscovery providers is an important variable.

So, in my opinion, lawyers and firms are slow to warm to technology because of the competing tensions in a professional organization where substantive practice and process converge. Law firms would be wise to create dynamic matrixes that combine players and technology priorities that guide a best practices approach to vendor selection.

Democracy and eDiscovery: Part 2

Association of Certified E-Discovery Specialists (ACEDS) recently published: A call to vendors to make e-discovery affordable for ‘The Other 85 Percent’ available here.

Christine Taylor does a great job of itemizing the issues associated with eDiscovery designed for the "1%." Christine's article partners well with my post Democracy and eDiscovery – Can Affordability and Proportionality be a Reality?  found here and originally posted in December 2014.

The Dewey Downfall – “Cooking the Books” is a Dish Best Served Cold

An article posted yesterday on www.nytimes.com and available here describes indictments issued on March 6, 2014 against members of Dewey & LeBoeuf leadership in the aftermath of its historic downfall. Prosecutors disclosed detailed e-mails between Dewey employees that seem to track an orchestrated plan to “cook the books” and this proves that (alleged) fraud is a plan best served cold and probably not memorialized in recoverable data.

The recent developments in the Dewey story are important and elucidating for a number of reasons. From an eDiscovery/Information Governance perspective, the actions of the indicted former Dewey employees prove a powerful lesson in the technology age. Data is valuable and often determinative and emerging, dynamic technology has the ability to isolate “smoking gun” information as part of a strategic discovery process. The Dewey e-mails also show the importance of institutional education that stresses the risks of data in the modern workplace. While this is especially important in a law firm environment (and ironic in this instance), it should be an essential component of an Information Governance plan in any organization.

Although the Dewey story may be punctuated by alleged illegal actions on behalf of its employees, it reflects an ongoing struggle amongst large, international law firms who seek to maintain market share, partner profits, revenue goals and marquee practice groups. Dewey proved to be a dramatic exclamation point on large firm failures after Heller Erhman and Howrey. While we are now focused on the indictments, they only reflect underlying issues that challenge the business of law in an era when a broader legal services market is expanding and clients’ concept of value is evolving. Although there are complex macroeconomic variables forcing change in the legal market, considerable experience as an eDiscovery attorney (outside traditional tracks) gives one some perspective on the interplay of the substantive and administrative sides of large law firms. I continue to believe that the “business” of eDiscovery may provide a rich model for structural change within law firms as the industry transitions to a services-oriented approach with an updated perspective on billing, value, brand, customer service, resources, relationships and “partnerships.”

Is Your Data Corrupt? – eDiscovery and the Evolving Foreign Corrupt Practices Act (FCPA)

The global marketplace and increased international business exposure are catalysts in the growing instances of Foreign Corrupt Practices Act (FCPA) investigations and prosecutions. In plain terms, the FCPA is fashionable. A side effect of this growth is the explosion of international eDiscovery and the complications that follow suit…data privacy concerns, collection issues, experienced cross-border vendors, the challenges of foreign language review as well as sophisticated technology and workflow processes.

A recent report by the Texas Public Policy Foundation (http://www.texaspolicy.com/press/tppf-releases-reforming-foreign-corrupt-practices-act) explores the substantive issues with interpreting the Act and doing business in culturally-different jurisdictions. In addition to addressing the overall ambiguity in assessing business practices in other countries with a “blunt Western sword,” it also cites lost corporate opportunity as a secondary implication of the Act.

I continue to believe that FCPA-related discovery presents a huge opportunity for law firms and eDiscovery vendors because few providers or firms are effective/efficient resources for clients defending against anti-bribery charges. However, what is an opportunity for legal services is a huge drain on corporate legal departments and that should be a component of the conversation evolving in media recommending changes to the Act.

As legal practice and jurisprudence strive to balance litigation with fairness, remuneration and social/business integrity (e.g. history behind the amendments to the FRCP), current analysis has failed to consider the significant discovery costs associated with FCPA investigations. Carter-era macroeconomics was defined by a much-changed playing field where American, global, corporate giants could dramatically impact the intersection between mercantilism and diplomacy. Similarly, discovery requirements and costs have exploded in the past 20 years. Acknowledging the anti-American effect of bribery, FCPA investigations may need to evolve to “judiciously” balance cost, impact, fairness and economics.

Democracy and eDiscovery - Can Affordability and Proportionality be a Reality?

I have enjoyed getting to know Nextpoint's perspective and products via a great morning coffee with Jim Lancaster and through their Nextpoint Newsletter available at http://www.discoverycloud.nextpoint.com/.

In a pre-Thanksgiving post by Nextpoint's John Krause entitled, Low Cost eDiscovery: The Secret to Making Legal Services Affordable, I think that we see that Nextpoint is initiating a new conversation regarding the democratization of eDiscovery cost, affordability, and proportionality based on their cloud-based solutions. As John suggests in his article, these issues are quite relevant as FRCP updates are being considered.

I think that it is interesting to consider a few aspects of democratizing eDiscovery;

• Who benefits from "cost democracy?" Clients, firms, services providers?
• Is a "low-cost solution" an enterprise solution or, is it part of your solutions stable?
• Is the cloud a boon to small law or, is it more democratic than that?

Referring to my experience in large law firms, attempts to provide flexible eDiscovery options never completely satisfy all clients. Large law firms are often like hundreds of small firms under one umbrella. With each new client, large law firms are forced to calculate a new proportionality formula and capable, intuitive, and cost-efficient products could serve the single plaintiff or corporate monolith.

 

TAR: Table for One? - Subject Matter Experts (SME's) and Technology-Assisted Review (TAR)

John Tredennick posted an interesting article on SME's last week for Catalysts' "E-Discovery Search Blog" (http://www.catalystsecure.com/blog). The post link is below.

In the world of document review, training the reviewer (attorney team or algorithm) is critical to success. Working with 100's of case teams, I have learned that there is NEVER one SME. At any given point in the life-cycle of a document review, the attorney who is most expert with respect to the substance of a matter may change.

Immediately after collection, the expert may be the fourth year who "managed" the collection. There may be experts who are assigned to individual issues.  As a matter progresses, it is more likely that expertise may be found with a senior associate who is charged with managing the production relationship with opposing counsel, organizing depositions or preparing motions as the case develops.

In addition to it being unlikely that you will find one oracle at Delphi for your matter, I worry that the use of one SME encourages a very singular perspective regarding the crux of a case. Even well into a review, I have seen attorneys practically come to blows about review analysis/interpretation. In the realm of TAR, I think that it is most instructive to have 2-3 experts so that debate and consensus is encouraged.

For more detail, please enjoy, Subject Matter Experts: What Role Should They Play in TAR 2.0 Training?;

http://www.catalystsecure.com/blog/2013/11/subject-matter-experts-what-role-should-they-play-in-tar-2-0-training/