Editor: Please briefly share some information about SPi and your background.
Kellner: SPi Legal is a litigation support provider in the areas of electronic discovery and paper processing. I have been involved in litigation support for over 20 years, starting with a large New York law firm. Having worked on both the operations side and the consulting side, I have been involved in the area of electronic discovery now for a little bit over ten years. At SPi, I am responsible for consulting and project engineering.
Editor: Is it useful for general counsel to have relationships with litigation support vendors directly, instead of working with vendors through their outside counsel?
Kellner: I think the general counsel can probably get a lot more information directly from a knowledgeable and experienced vendor. The information doesn't need to be filtered through the law firm litigation staff or the legal team. The general counsel has IT resources to get involved in a very direct and productive exchange with a knowledgeable vendor about the scope of the company's project, the computing environment, the nature of the electronic data, and the volume of the electronic data. The direct relationship is a much cleaner path for information to reach the general counsel.
Editor: What is meant by a full-service or end-to-end provider, and what kinds of services do they provide?
Kellner: An end-to-end provider can work through all of the elements of data identification, preservation, collections, processing, search, analysis, review and production. I think a good end-to-end provider can provide flexibility and advice along the way without being stuck on a single software or technology approach. If an end-to-end provider has feet on the ground in more than one continent, so to speak, it can handle paper as well as electronic discovery on a global scale. It can use the right combination of onshore and offshore resources to get the job done economically. Typically, an end-to-end provider has all of its resources under one roof, but if not, it may act as a general contractor for other services that may need to be brought in.
Editor: What benefits can a full-service or end-to-end provider bring to the table?
Kellner: When an end-to-end provider has good project management, the general counsel doesn't have to be his or her own general contractor. A single service agreement can cover the workflow for an entire project and even deploy services to multiple outside counsel as well as to coordinate those services. Also, because there is a unified suite of services, there are time and cost savings and risk management in keeping the project under one roof. There are additional time savings and the risk management benefits in that companies don't have to worry about data formats being transferred from organization to organization when they contract with an end-to-end provider.
Editor: Can a corporate law department take advantage of economies of scale better than a law firm?
Kellner: Law firms are buying services from vendors on a project-by-project basis. They are essentially bidding each one separately. A corporate law department that is busy with many litigations or regulatory projects has a lot more purchasing power and can usually negotiate better pricing. Also, the service provider and the company then get to know each other better as the relationship develops. They get to know each other's personnel, data, recurring issues and repetitive litigation, billing practices, payment terms - all of these things work to the benefit of the company that ultimately needs the service and is ultimately paying the bill, rather than to the law firm that is handling one particular project.
Editor: Do you have a breakout of your clients as a percentage of your total? Those who are in-house counsel and those who are outside counsel?
Kellner: Most of our revenue comes directly from our relationships with corporate clients. Those relationships are repetitive from project to project. As a whole, they are less numerous than the individual projects that we've received from individual law firms. So, I would say that about two-thirds of our work, but one-third of our clients, comes directly from corporate counsel.
Editor: Typically, how do corporate law departments go about directly obtaining the services of a litigation support vendor such as yourselves?
Kellner: We have seen it vary from company to company. Sometimes a request for proposal emanates from the law department, or sometimes from global purchasing. Sometimes it comes from a call directly from an attorney or a technology staffer in the law department. It is important that when the RFP comes from global purchasing, which so many people are required to do these days for compliance purposes, to make sure that the global purchasing group really has a firm understanding of the service and the marketplace. These are services that are often integrally linked, and we've seen attempts to purchase them either as software or as commodity data processing.
Editor: What sort of due diligence should general counsel or corporate IT undertake before engaging a legal service vendor?
Kellner: This is a relationship that is dependent upon a well-run outsourced business process. It is something that has a great deal of consequence to the company as well as to the provision of legal services to the company. It is critical to inquire about references, data security, and quality management at each step. Because things change throughout the course of a litigation or a regulatory compliance project, it is important that there is an understanding by the legal team regarding the sort of flexibility the vendor has if something should change if they need to go back, to re-search the data, or to change directions in approaching the data because the content or strategy of the case has changed. So flexibility is important. Also important is an ability to contribute ideas regarding collection, preservation, search and review - not just taking orders for data processing. Many full service providers have a lot of experience and can contribute to streamlining a process in ways that attorneys working on just one project cannot.
And then, overall, financial strength and staffing strength are important. When the heat is on, and the deadline is coming up, does the organization actually have the horsepower to see it through? Can it handle things in multiple shifts if it is necessary to do that with outside counsel?
Editor: Is the person who engages you generally the general counsel or is it someone from IT? What kind of an introduction do they make for you to the team?
Kellner: If it's an arrangement that is started by the company, it is typically a process that is started by the general counsel and is leveraged to both IT security staff as well as global purchasing. The IT folks then turn to the vendor with questions on quality management, data security, hosting ability, references, and so forth. Assuming that those thresholds are crossed, then we're handed over to general counsel for discussions about cases: what kinds of projects are on the table and what kinds of services and advice can we provide.
These are legal projects that require legal supervision; lawyers have to be involved in the strategy, tactics and substantive decision-making. The vendor, no matter how good it is, has to make sure it is not substituting its decisions for what need to be legal decisions. It is an attorney's responsibility to maintain substantive control of projects managed by vendors. Because of federal and state court rules along with ethical obligations, the company and its lawyers, both inside and out, have to be sure that the output of all of this technology processing is complete and defensible. It should not just be taken on faith that what comes out on the other end is what the lawyers had intended.
But overall, it is a team. It is the company's legal matter, with outside counsel providing the legal service, and with vendor supplying the technology support. There has to be frequent and productive communication among the three groups to make sure that everyone is aware of each other's requirements and time constraints, and that there is consensus of approach.
Editor: What resources should the general counsel be considering in supervision, oversight and quality control?
Kellner: I think that there needs to be a point person in general counsel's office, and certainly a main point of contact with outside counsel. There must be someone in each location who is watching the expenditures, the requests, the meeting of the deadlines and the marshalling of resources. Then, the point person ought to ask the following questions, including: What is being done in terms of quality management? What is being done in terms of meeting the deadlines, staffing resources, budgets, and so forth. There at least has to be a point person in the general counsel's office who is overseeing the whole project that has some bottom line responsibility for it.
Editor: Is there any knowledge transfer as far as uses of technology? Can a corporation become more ESI-discover independent over time?
Kellner: This is an area where the direct relationship really pays off with the company- the techniques and technology for data collection, preservation, implementation and management of litigation holds, archiving, email, contingency planning for future projects - these are the areas in which the company has an opportunity to leverage on what it learns from a good litigation support provider. The company can also make sure that it has the benefit of the use and the reuse of the databases that it has made for its project. A lot of times we see this information as being disposable to the project; we try to make sure that the company can use the data, the database, and the attorney work product from one project to another if that's necessary.
Editor: Long-term, across multiple projects, what other benefits or insights can the corporation gain by having consistency with an end-to-end provider?
Kellner: The company uses the advice and experience to improve its case management sometimes by procedure, sometimes by the use of a particular new technology, sometimes both. Many companies are weighing the future costs of electronic discovery against the future costs of procedures and technology for corporate-wide initiatives for electronic records management and, more broadly, for ECM, or electronic content management. The well-run large project gives general counsel and senior IT personnel the experience and ability to plan strategically how the company is storing, retrieving, and retiring its electronically stored information.
The general counsel can also start to think about the litigation support resources in the same way that he or she thinks about securing the services of outside counsel. What is the volume of work from month to month or year to year? The general counsel and the provider can come to terms with the predictable level of service, and they can come up with a predictable annual price. This is something new for the general counsel. We know that they are looking to achieve regular annual agreement with their outside counsel in ways that are not just hourly billing. We are looking to do the same so that we can have regular annual pricing for a particular service, broken up into even monthly payments, and then for the general counsel, the litigation support capability is there, and there's no surprise every month as to what the budget request or the monthly bill is going to be.
Editor: Did you find in the first year with a client that your billing is much higher because it is getting up the learning curve for both of you?
Kellner: No, I wouldn't say that. I think that predicting billing can be relatively straightforward. There needs to be a good intake procedure, and probably a year's worth of experience viewed in retrospect. With that information, the company and the vendor can predict what the costs will be next year, rather than risk seesaw billing every month, depending on what projects are coming in. A service agreement with a budgeted amount for the year can be put into place, with a means to account for the work as it occurs. The result is a predictable service with predictable billing that has good knowledge transfer and increasing value to the company.
Editor: Apart from the case-to-case economy of scale, what impact might the relationship have on overall costs of discovery?
Kellner: The experienced service provider has a lot of tools to be able to process, search, analyze and deliver data for review. These tools are built for heavy lifting, more so than, say, the document or email management tools in the corporate computing infrastructure. The better that the provider and the client know each other's business, the better a collection can be targeted. So, a good relationship with a solid vendor can help keep down the volume of emails and files that are in play in any given case. General counsel has, with that, a great opportunity to keep the lid on overall discovery costs.