Roundtable: Determining Your Legal Technology Needs

Tuesday, September 1, 2009 - 01:00

Editor: Technology can be expensive. How do you go about determining what the legal department needs by way of a permanent technology infrastructure and what can be brought in on an episodic or temporary basis? Examples?

Behnia: Yes, technology can be expensive, but the best practice for understanding the costs of legal technology involves looking at more than just the price tags for hardware, network infrastructure, and software. In our experience, it pays to look at the total cost/benefit equation for an investment in legal technology, factoring in a combination of hard dollar expenses, such as outside counsel billings, and intangibles, such as legal operations productivity. Then, it is possible to evaluate episodic or temporary technology options with the full legal department cost/benefit picture in mind. In certain cases, such as e-discovery, short-term use of specialized Web-based technologies may be optimal. In general, though, we find that a thorough commitment to a specific platform, developed in alignment with a department's unique work flows and rules, creates the best cost result long term. In addition, there are often technology delivery options, such as Software-as-a-Service, which can make the technology available with reduced up-front costs.

Harris: Electronic discovery is a business reality, and the challenges associated with it require a significant investment in technology. However, the technology landscape can be truly daunting. If you're considering the purchase of software to manage e-discovery, ask yourself (and your company) the following questions:

• Do you truly understand the problem that you are trying to solve?

• If so, do you have existing business processes, and do you understand where they succeed and where they fail?

• Does the technology you're considering specifically address those points of failure?

• Have you fully vetted the functionality of existing systems in the organization? In other words, are you using existing tools to their full capacity? Would investments in people or process yield greater ROI in the short run?

• Does your litigation portfolio and exposure to e-discovery demands warrant the investment in software, time and resources? Or would you be better served with an outsourced or SaaS-based shared services approach?

Technology can and will help automate some of these documented processes. For example, having software that can automatically manage and track legal holds will significantly ease the operational burden of the corporate legal teams. However, a sound understanding of current business processes and requirements is a necessary prerequisite before determining what technology should be considered. Even in a best case scenario, there is significant risk associated with the implementation of software in an environment where (1) the core business requirements are not clearly defined, and (2) there are no existing processes to manage the workflow.

Kibbe: Technology implementation inside a legal department firewall presents a unique challenge to the in-house practitioner. As the lawyer, you know you need to be able to respond to litigation issues very quickly. Technology decisions, on the other hand, tend to be a committee effort and move more slowly. The technology that helps you as a litigator is unlike much of what the rest of the corporation uses - by definition, it is specialty technology, most of which is not intended to be run by occasional users. So when making a decision of in-source or outsource, you must consider a number of important factors.

First, how proactive is your internal IT staff? Do they tend to be at the forefront of technology, e.g., upgrading to the next Microsoft version shortly after release or are they more conservative and wait for bugs to be found and repaired?

Second, do you have the IT staff to support an in-house purchase? Remember that it is your phone that will ring at 3 a.m. if the data does not get processed or the review platform is not available to your outside counsel. Most corporations staff their IT departments very leanly after hours, and that lack of 24X7 support may actually hinder your litigation effort.

Internal legal staffing poses additional concerns. Like many law departments today, if you are faced with more to do with fewer resources, will you have the legal oversight necessary to manage the team and the process with an internal tool? Also to be considered is the relationship with outside counsel. Is it collaborative, whereby the in-house lawyer and the outside lawyer manage the case together, each doing his or her part or is it more high-level management from inside with outside counsel making all the decisions (and being held responsible for them)? If the latter, implementing technology in-house may strain that outside counsel relationship. It comes down to authority and accountability. Outside counsel will not want to be held accountable for outcomes of technology that they were not responsible for implementing.

Sharp: The question of in-house or outsourced solutions has become a key issue for corporate legal departments in the electronic discovery arena. In this context, it's important to distinguish between event-driven activities, such as litigation, internal investigations and regulatory responses, and ongoing information governance operations, such as data retention, records management and litigation readiness applications that reside to the left of the EDRM model. Event-driven activities are typically outsourced, while information governance is usually in-sourced.

There are three main considerations underlying the way that corporations look at this:

• Control - as the corporation's obligations under information governance and electronic discovery have emerged over the past few years, corporations have been looking to take control of these applications and data.However, with the emergence of software-as-a-service applications, the boundaries have become blurred and data and system control has become somewhat less of a consideration.

• Cost - the peak and valley nature of episodic events, such as litigation, represent a key barrier for the in-housing of e-discovery applications. Litigation or investigatory events are unpredictable in terms of timing and scope, but require the corporation to act quickly. This volatility makes it very difficult to plan or size event-centric systems. In some cases, corporations will choose the in-house strategy for handling the predictable baseline portion of e-discovery volumes, often for small cases.

• Technology - in the information governance and e-discovery arena, areas that are not a core competence for the business, corporations tend to deploy end-to-end one-stop-shop applications, rather than custom solutions built by integrating best-of-breed technology components.

Technology becomes the decisive consideration where it is perceived by the corporation to yield strategic value. In areas where technology has standardized and commoditized, such as email archiving or data collection, there is usually more willingness to choose in-house deployment of an end-to-end solution. But in areas where technology is more dynamic, especially where emerging technologies can change the costs equation or grant the corporation a key advantage, corporations tend to outsource, leveraging the technological edge that best-of-breed solutions can offer. The outsourcing strategy allows the corporation to leave its options open, giving the corporation more flexibility than permanent infrastructure, and enabling the choice of a solution with the technology advantage that the corporation is looking for.

Editor: How do appropriate litigation support technologies contribute to the collaboration of the company's legal department, its IT department and outside counsel?

Behnia: Corporate litigation involves an elaborate choreography between the legal department, outside counsel, and litigation support personnel. At stake are exposures to potential legal and cost risks, mitigated by sound legal strategy and effective spend management. For a busy legal department, there can be hundreds of moving parts. At the very least, it's a process that should embody a degree of mutual awareness of case status. At the optimum, the stakeholders in litigation should be able to collaborate seamlessly, using technology to make the right legal moves without overspending. The IT department's role in this intricate dance is to provide a technological solution, as well as supporting infrastructure, that enables each stakeholder to engage in the litigation process as efficiently as possible. The technology solution should ideally be adaptable enough to deliver strong collaborative capabilities while flexing to suit the specific work flows, rules, and processes used by each unique department. At the same time, legal professionals should realize that the technology can't do it all alone. Legal department managers need to engage with IT, and perhaps outside experts, to flesh out a litigation support solution that will serve the specific business needs of the department.

Kibbe: Whether you choose to license in or outsource by matter, it is imperative that the decision be an internal team decision - that means, corporate IT, legal, records management and representative outside counsel should all be at the table. You realize that each of those players brings a particular expertise to the litigation table. By sharing experiences, ideas and requirements as a team, not only will you make the right technology choices but each group will have ownership (and therefore support) over the process and decisions.

Every litigation project starts with lawyers; then involves IT and records in the preservation, collection and sometimes processing stages; then back to the lawyers. That whole continuum runs more smoothly when everyone is on the same page, understands the technology and why it was chosen, and has realistic expectations of deliverables. The result is a well-run, multi-disciplinary team that can leverage that process from case to case and which will achieve considerable cost savings because of the efficiencies.

Harris: Litigation support technologies can help bring defensible controls to the e-discovery response process as well as facilitate collaboration between IT, the in-house legal department and outside counsel. Also, there are hundreds of software products and services that are available to help companies easily and securely store, manage, protect and share ESI during discovery. These technologies can help legal teams:

• Track initial notification of a hold through the identification and production of case-relevant evidence;

• Ensure that case-relevant discussions via electronic communication are managed once a complaint has been filed or a legal hold has been put in place;

• Analyze evidence in advance of full-scale collections or review to determine the scope or value of the matter;

• Support the review of potentially relevant evidence across large, dispersed review teams, regardless of location.

What a company should not do is expect the entire IT department to be involved in every matter when a request for production arises or an e-discovery planning conference is looming. Rather, having an understanding of the IT systems as part of an overall discovery response planning process will help eliminate the fire drills so often encountered. The greatest challenge, however, lies in knowing where the gaps in the process exist and which ones can be solved by applying technology.

Sharp: The relationship between the corporate legal department, the corporate IT department and outside counsel has changed dramatically since the emergence of electronic discovery. As far as litigation support technologies are concerned, it's possible to identify three periods. Initially, knowledge of e-discovery technology was the almost exclusive domain of the service provider. As a result, the service provider had a virtual free hand in the choice of technology. At the time, outside counsel were still working under the paper discovery paradigm, the billable hour orientation was dominant and technologies that could leverage e-discovery's potential for productivity enhancements were largely under-developed.

As knowledge spread, the corporate legal department, often with the support of the corporate IT department, began to take a much more active role, leading the way in the adoption of analytical capabilities that could reduce the litigation review burden. Over the last year, as the financial crisis has taken its toll and competition has intensified, the law firm and the corporation have become much more closely aligned on technology issues. In many cases, the law firm has actually been taking the role of aggressively taking on and utilizing emerging technologies. Recently, we have seen law firms playing the role of early adopters, with the aim of reducing review costs and providing the firm's corporate client with better value for money.