General Counsel Take Note: The E-Discovery Process Continues To Evolve - Part II

Monday, September 1, 2008 - 00:00

The Editor interviews Brandon Daniels, Co-Head of Legal Process Consulting, CPA Legal Services, Rob Hellewell, Senior Director, LexisNexis Applied Discovery, and Edward H. Rippey, Partner and Co-Chair of E-Discovery Practice Group, Covington & Burling LLP. Part I of this interview appeared in the August issue of The Metropolitan Corporate Counsel.

Editor: What viable solutions can companies implement to help reduce the astronomical costs of e-discovery associated with large-scale litigation?

Rippey: If you are trying to cut costs, you have to look at what is causing those costs. For instance, it is possible to reduce the volume of data that must be reviewed in a number of ways. Negotiating well with opposing counsel at the outset of a litigation is one way to accomplish this. Another option is to use technology that permits the reduction of data through efficient culling and filtering. The trick in both of these instances, of course, is to accomplish the basic goal of reducing volume without increasing the risk to the client.

Daniels : The use of technology is extremely important, but as we discussed earlier, there is a need to understand the technology and specifically what it can and cannot do. Among other things, the ability to understand how the technology really works is essential in light of the fact that courts tend to believe - correctly or not - that human review is better than review by way of technology. Privileged communication is a case-in-point: we do not possess technology that provides us with an absolute assurance that a particular document is privileged. If an attorney attempts to defend such technology in a courtroom setting, he is generally met with skepticism.

In light of the risks involved, a prudent practitioner in this area looks to technology to provide a great deal of support in reviewing documents but not as a substitute for human judgment. Through the use of key words (that have been vetted by sampling or analysis) or technology that identifies recurring terminology across a range of documents, it is possible to reduce an enormous volume of material to something manageable. At the end of the day, however, a judgment call must be made, and that brings in the human dimension. There is no substitute for human expertise and experience, at least not yet.

Another option that companies employ to reduce e-discovery costs is the offshore option. There are great benefits available through offshoring, but there are risks as well. This is a very competitive arena, and there are a great many start-up companies in the business that simply lack the infrastructure to protect the intellectual property of their clients. While this risk exists in the U.S. as well, it is of particular concern offshore. It is important for a company to know with whom they are dealing and to have confidence in their data security systems.

Another issue that is of some concern when dealing with an offshore service provider in this area is, of course, the quality of the staff. Even in India or the Philippines, where the standard of English is very high, the attorneys hired to handle the discovery process may lack the requisite experience to properly assess the materials they are reviewing. It is important to know something about them - their educational qualifications and how they are recruited, what the workplace environment is like and how they are managed - and whether there are cultural differences that might influence the review process.

A third issue that is important in the offshore context is financial stability. Very often that is an important indicator of whether the enterprise has done good work for its clients in the past and will be there for them in the future. You do not want to be in the middle of a review facing a production deadline and learn that the offshore provider has run out of money and cannot meet payroll.

Hellewell: Another factor is the platform used to review email and electronic documents. There are different options, to be sure, but one of the principal mistakes we see is the tendency of some corporate clients to choose the review platform that is least expensive, but not necessarily the most efficient. Review platforms are not created equal. Some may be more expensive than others, but the platform that permits attorneys to complete their review effectively and quickly will save the most money in the long run, irrespective of the upfront costs.

Daniels: Let me add one comment to our discussion of the offshore solution. Over the last three years or so the offshore option has become a prudent way in which to reduce costs, but the question is whether the results of that exercise can be effectively utilized by the attorneys in charge of the litigation. Do they have the experience to use these offshore resources effectively? Many corporate clients remove their outside counsel - who, after all, have been retained to handle the litigation - from the process of managing the offshore review. In our experience this is not necessarily a prudent step although it may result in some short-term savings. The point is that if outside counsel have the primary responsibility for conducting the litigation they need to understand, and have confidence in, all of the resources they are being asked to use in fulfilling their duties.

Rippey: What Brandon has said about offshoring gaining legitimacy over the past three years or so is absolutely correct. And companies are becoming increasingly savvy when it comes to conducting a review. The first-line review might be offshore, and the second handled by associates at their U.S. outside counsel. And as this development proceeds, I believe that an increasing number of companies understand that the low bid provider is not automatically going to be the best one to retain. Cost is a factor that is central to this issue, but service is now recognized as equally important, if not more so.

Editor: You've spoken about e-discovery at conferences across the U.S. What are the main messages you try to share with the legal community to help them reduce the risks and costs associated with e-discovery?

Daniels : For me, the key message is early attention. When I speak, I urge the conference attendees to learn about the technologies that are available, to develop preferred vendors for specific cases, and to stay abreast of developments in a rapidly changing environment. The more attention you pay up front, the more problems you will avoid as you proceed through the e-discovery process.

Hellewell: Along the same lines, it is important to deal with people who are truly experts in the areas of e-discovery and document review. In some cases much of the responsibility of vetting providers, developing review strategy, etc. was left to very junior associates. It is essential to connect with people who have the expertise to address these issues before they get out of control.

Editor: What e-discovery issues do you see taking center stage in the coming years?

Rippey: Even as recently as a year ago, I was not convinced that offshoring was more than a passing phenomenon. Today I think that it is around to stay. That said, an issue that arises from this state of affairs concerns the attentiveness of outside counsel. They need to be prudent in selecting the right offshore vendors, shrewd in delegating responsibility to them, and proactive in exercising the requisite degree of oversight.

It is not sufficient to have someone in charge who understands something about document review. Today almost everyone in charge of this particular function is a firm partner with expertise in the area and a knowledge of the case law and the Federal Rules of Civil Procedure. This strategic and supervisory function is not a job for a junior associate.

Daniels: It is accepted wisdom today that offshore review under the supervision of outside counsel can be a very effective method of reducing the cost of litigation. So I concur with Ed that structuring the relationship between outside counsel and offshore service providers is a key issue going forward. Second, the way in which search terms are devised and the methodology used to deploy them will be a key issue. This will possibly lead to the man vs. machine review discussion becoming increasingly heated.

Hellewell: Technology is improving on an almost daily basis. Web-based review platforms, advanced searching capabilities and other technologies that exploit the unique characteristics of electronic data are relatively new inventions. It is difficult to predict in any precise way what specific technology will dominate in the future, but clearly some of the innovations that are just now emerging will significantly help reduce the cost of litigation.

Rippey: One of the things that is driving the dramatic improvement in the technologies that address this issue, of course, is the really incredible pressure on our corporate clients to cut costs. Anything that accomplishes this result - whether the development of an approach such as offshoring or the emergence of new technologies - is weighed more heavily than it was just a few years ago. People are simply more receptive to new ideas in this area today, and that is going to influence the rate of progress here.

Editor: Are you aware of any current cases or pending legislation that may have an impact on e-discovery?

Hellewell: Evidence Rule 502 is intended to reduce the risk of forfeiting the attorney-client privilege or work product protection. It limits forfeiture to documents that have been produced, as opposed to creating some sort of subject-matter forfeiture as a consequence of inadvertent disclosure during discovery. It even permits the recovery of documents that have been inadvertently disclosed. This could have a major impact on e-discovery.

Daniels: Another issue has to do with lobbying and legislative activities in this area. Legislation that serves to effectively limit the cost of litigation, and specifically the cost of discovery in light of the volume of electronically stored data, is not a high priority for the general public and for legislators. The pace of such legislation, accordingly, is much slower than the members of in-house legal departments would like to see. That is a reality that we all must live with for the time being.

Please email the interviewees at bdaniels@cpaglobal.com, rob.hellewell@applieddiscovery.com or erippey@cov.com with questions about this interview.