Transforming Data Into Knowledge To Reduce Costs And Improve Decisions

Monday, November 21, 2011 - 15:00

Bill Mariano, Applied Discovery, and Brandon Daniels, Clutch Group

In 2010, Eric Schmidt, Google’s executive chairman and former CEO, remarked, “Between the birth of the world and 2003, there were five exabytes of information created. [Now] we create five exabytes every two days.” This massive volume of data means it is increasingly difficult for companies not only to organize key facts, but also to identify them. In e-discovery, it also means that the costs of litigation, audits and investigation are rising, usually without a commensurate return in value.

The legal market has extended its institutional mind-set of retaining law firms – based upon their subject matter expertise, jurisdiction or relationship to advocate for a client in a specific matter – to the engagement of all legal service providers. Due to this myopic view of their cases, providers, firms and clients attempt to address the growing costs of e-discovery intra-matter through labor arbitrage or productivity-enhancing software, while the rapidly expanding universe of data, the complexity of cases and the frequency of investigations make it difficult to achieve any net savings. When a company resolves a matter, it moves on to the next legal crisis without attempting to leverage what it learned from the prior matter. With this pattern, outside counsel and legal service providers do not have an incentive to deliver better value. Moreover, companies do not demand more value from their providers since they view litigation as draining their organization’s cash reserves, diverting important resources from their core functions and tarnishing their brand. In other words, most organizations think legal matters offer limited, if any, value.

Recognizing this gap in the market, the conclusion was that although we may be able to reduce unit cost, there is an inevitable floor to the cost of services; therefore, we must transform litigation and investigation spend to deliver a return on investment. Under this new model, the legal department is converted from a cost center into a valuable resource that drives innovation, performance and regulatory compliance while also generating significant cost savings – and thus value – over time. In short, the joint approach we have taken converts the data and analysis that a company creates during discovery into valuable business intelligence.

Using this joint approach, the discovery process begins as any ordinary litigation or investigatory matter does, with matter-specific data collection, forensics investigation, data extraction, indexing and document review and analysis. Then, by using informed data analytics, the joint team accelerates the speed of finding relevant key documents and carves out irrelevant, tangential and nonessential documents, using two methods: cross-case semantic comparison and sample-based predictive analysis. Applied Discovery’s ability to quickly process large volumes of data, enhanced by the use of analytics technology and coupled with the efficiency of cloud computing, speeds data extraction, indexing and conversion. And instead of only leveraging the technology to drive efficiency in a first-level review for production, we use this ability to triage data to route documents to the appropriate levels of review. For instance, if a document has a high concentration of key information, is between key players in the investigation and is associated with a highly relevant time period, it should not move through first-level review, quality control or second-level review: rather, it should be positioned directly in front of the fact development team.

As the project timeline progresses, the joint team captures factual analysis gleaned from the documents and builds a data repository that clients can use across matters to reduce redundancy. Over the length of an engagement, we deploy our business intelligence analytics tools with an eye toward helping clients compile and analyze their data to answer three critical questions:

  1. What are the risks and issues that this set of documents presents, and how are they related to this new matter? When a client receives a new legal matter, the joint team will leverage a semantic comparison of documents between the new matter and the data repository.
  2. Are there any improper, illegal or noncompliant behaviors within the business? Using retroactive data analysis and Virtual Audit technology, the joint team can help clients quickly and accurately identify trouble areas, assess relative risk levels and develop a plan to address any risks that are found.
  3. What are the trends, patterns or anomalies within the business that drive performance and/or risk? Using our analysis software, clients will be able to create data points that will allow them to identify communication patterns, social media uses and discussion topics that either drive performance or pose risk to the business.

How could this add value for your company? Take, for example, the record-breaking $2.3 billion settlement of federal and state litigation against Pfizer for the off-label marketing of the painkiller Bextra, the anti-psychotic drug Geodon, anti-epileptic drug Lyrica and the antibiotic Zyvox. This settlement represents the largest healthcare fraud settlement in history. The bulk of the payment focused on penalties related to the off-label marketing of Bextra. Though the Food and Drug Administration (FDA) had approved limited doses of Bextra for relieving arthritis and menstrual pain, it rejected the use of the drug in higher doses for surgical pain. The government accused Pfizer of promoting the off-label use of its products through common industry practices, such as employing doctors to consult and speak on behalf of the company. Internal documents showed company representatives called on these physicians to serve as “public relations spokespeople” and allegedly paid them kickbacks for prescribing the drug for off-label uses.

If a large pharmaceutical company in Pfizer’s position had access to the joint teams’ fact development software and process, the company could have audited its documents and searched for evidence of the illegal activity. Upon finding suspect documents, the company could have conducted its own investigation, curtailed the illegal activity and limited its exposure. Or, by comparing the off-label revenue trends to the text or communication patterns that connote the indicia of off-label activities, the company could have presented to the DOJ an alternative perspective reflecting the responsibility that hospitals, healthcare providers and physicians must assume when employing potentially beneficial yet unapproved uses of its drugs.

In sum, this joint approach to advanced analysis translates into ongoing results for clients by reducing the expense associated with first-level review and overall discovery costs in future matters. It also helps clients mitigate risk and thus potentially avoid the costs of investigations, due diligence and litigation. Our Managed Review Services allow clients to transform information extracted from their data into knowledge that informs longer-term decision making and sound business strategy.

Bill Mariano is an attorney and director of electronic discovery at Applied Discovery, a division of LexisNexis. In his role, Mr. Mariano works from the New York and Washington, DC offices with Fortune 500 corporations and AmLaw 100 law firms in the northeastern United States to help clients improve their strategies for handling complex discovery matters while creating greater cost and control efficiencies throughout the discovery process.

Before joining Applied Discovery, Mr. Mariano served as a senior Internet business development consultant for a Fortune 100 communications company. In this role, he coordinated strategic relationships with other Fortune 100 companies and spoke on the emerging Internet medium as a vehicle to advance a company’s message to a global market.

Mr. Mariano also previously practiced law for 5+ years with a focus on securities litigation and investigations. As part of his practice, he gained experience managing document reviews on Concordance and various Web-based solutions.

Mr. Mariano earned his JD from Seton Hall University School of Law, where he graduated cum laude, and a BA in Business from the State University of New York at Oneonta, where he graduated with honors.

Mr. Mariano works as a guest trial advocacy instructor at Seton Hall University, where he teaches students how to leverage technology in practice. He is also a frequent presenter and author on a variety of topics including How to Develop an Electronic Discovery Action Plan; The FRCP Amendments: Dealing with Electronic Discovery; Emerging Case Law in Electronic Discovery; and Leveraging Technology to Reduce Discovery Costs.

Brandon Daniels is the president of managed services at Clutch Group. In this role, Mr. Daniels leads the organization’s strategy for all commercial and operational aspects of its litigation & investigation, compliance & risk, and corporate in-house services.

Prior to Clutch Group, Brandon was the VP and global head of litigation & investigations at CPA Global, a legal services outsourcing firm. In his role at CPA Global, he led the growth of the legal services business unit – defining, building and delivering innovative and award-winning solutions and services for Fortune 1000 corporations. With over 300 attorneys across the U.S. and teams in Europe and Asia, he worked with clients to coordinate regulatory matters and disputes globally. In both internal and external roles he has extensive experience conducting and managing large litigation and investigation matters, including multi-million and billion dollar investigatory matters responding to the SEC, FTC and DOJ.

Mr. Daniels also has an extensive background in the management and application of legal technology. Over the last decade, working for firms such as LexisNexis, he has focused on applying technology to legal services in order to create efficiency, increase quality and reduce risk for corporations. He has managed the development or acquisition and implementation of knowledge management, performance tracking, data room and litigation support software systems. He has also led the creation of facilities and technology environments that have withstood both risk and security audits from some of the largest investment banks, bioscience companies, and technology corporations in the world.

Please email the author at bill.mariano@applieddiscovery.com with questions about this article.