Reduce Over-Preservation: One Of Many Uses Of Technology

Monday, January 23, 2012 - 21:26

The Editor interviews Howard Sklar, Senior Counsel, Recommind Inc.

Editor: As we enter 2012, what should law firms and corporations be looking out for?

Sklar: There are going to be several drivers of both corporate and law firm action, and certainly one of the larger ones – and one which remains a driving issue from 2011 – is the volume of information being produced.

Editor: How does that relate to over-preservation?

Sklar: When people think about the data explosion, they tend to think in static terms – they visualize a vast warehouse filled with electronic data. A better analogy might be that of an ever-expanding pipeline throwing new data into a pool. We have an unwieldy amount of information coming in every single day that threatens to overwhelm us, and this pipeline isn’t feeding into an empty pool – it’s feeding into a pool that is already overflowing.

This means that we have to address over-preservation from the standpoint of both handling incoming data as well as remediating old data. Uncontrolled data is both an information risk issue and an information governance issue.

Editor: How does this fit into concerns about over-preservation?

Sklar: Over-preservation is triggered by the natural human tendency to hang onto things as well as by the fact that the compliance department does too good of a job of scaring their business partners about the need to preserve data. It’s wrong to keep things without a plan; without an understanding of what you’re keeping and why you’re keeping it; and without knowing how you’re going to get rid of it. The problem with over-preservation is not an immediate one; there is no red flag that is going to go up because you’ve over-preserved.

You may discover you have over-preserved only after you get a litigation, information or regulatory request. If a company discovers that it has 1.6 terabytes of information that are relevant to a request, that is disastrous in terms of what they’re going to discover that they didn’t know they had. 

Editor: What can be done about it?

Sklar: There are two things that companies are going to have to do: One is they have to remediate the data pool that they already have, and the other is that they’re going to have to put governance around the pipeline that is delivering new information to them on a daily basis. The nice thing is that technology exists to help them solve those problems. Recommind offers technology that automatically categorizes information that is already in the pool as well as the new information flowing into it.

Editor: I understand how Recommind’s patented technology can help address over-preservation, but does it have other applications or use cases as well?

Sklar: Yes, because our concept-searching and categorization technology allows you to take a disorganized mass of information and create out of it an organized file structure filled with files relevant to whatever categories you design. Tackling the problem of over-preservation is just one use case. However, technology that allows the software to understand what a document is about and what’s in it is exactly the technology that both underlies all of our products at Recommind and allows for different use cases.

Editor: So it’s not just incumbent on law firms to improve e-discovery?

Sklar: No, absolutely not. Their client corporations have to get a handle on the data that resides at the corporate level. Our technology enables corporations to establish governance of their data so they can dramatically reduce the information that they provide to firms, which lowers their review costs and allows them to better implement their document retention policies.

We’re seeing a tremendous growth of interest in this area. Over the course of 2012, you will hear that more and more corporations are moving from an electronic discovery governance framework to an information governance framework.

Editor: Is another use case the application of Recommind’s technology in the context of the FCPA?

Sklar: We’re finding huge interest in the use of our technology in the FCPA context. Just as one example, a regulator was interested in a company’s practices over the last decade in several countries. The company’s  firm needed to investigate: to zero in on the right documents. They had to analyze records in multiple languages and meet the applicable data privacy requirements. That firm chose us as a solution. The review took about seven percent of the time of a regular linear review (resulting in a 93 percent savings of lawyers’ time). Because the technology is language agnostic, they were able to identify critical documents in multiple languages.

Editor: What complications has the UK Bribery Act introduced because it covers commercial bribery as well as bribing foreign officials?

Sklar: We have guidance from the UK government on the UK Bribery Act, but we what we don’t have is a history of regulatory discretion. Once there is a baseline understanding of how UK authorities are going to implement and enforce the act, our technology can be applied in a manner similar to how it is applied in an FCPA context.

Editor: What role does your technology play in monitoring compliance?

Sklar: Our technology permits that process to be systematized for the first time and implemented in a way that makes sense. It allows corporations that have identified higher-risk employees to run concept searches across their data and proactively identify any hidden issues.

Editor: How can your technology expedite internal investigations that must be conducted within a particular time frame?

Sklar: Our technology can not only reduce the cost of internal investigations, but can also produce a much faster and more accurate result than a human review of the documents. Under the Dodd-Frank whistleblower provisions, which limits the amount of time a whistleblower can wait to call the SEC, a company effectively has only 120 days to investigate any allegations. Speed is therefore important.

Editor: Early case assessment is viewed as a good way to decide whether to fight a case or settle. What is the role of your technology in making that assessment?

Sklar: Even with the most advanced technology out there, we haven’t ignored the ground strokes. Our software is excellent at culling by date range, de-duping, and taking out system files – because when you’re doing a review you don’t need to go through the systems coding that undergirds Microsoft Word. By taking out irrelevant files, it enables those making the assessment to quickly hone in on files that are truly relevant. These are all the ground strokes of early case assessment providing the tools that enable you to quickly get a grasp on the data volumes you’re going to have to deal with and then make that critical decision on whether to settle a case or proceed to litigate it.

Early in the case, our technology enables you to very quickly establish reasonable estimates of the time and resources necessary to complete a review project. It also allows you to do the kind of basic or advanced searching that gives you a better idea of what the case is about.

Plus, in a litigation context there are both outgoing and incoming documents. Great for creating efficiencies in reviewing outgoing documents, the technology is perfect for quickly understanding incoming documents.

As to incoming documents, you may get a dump of 250,000 documents from your opposing counsel, and you have no idea what’s in them. Again, our technology quickly enables you to get a handle on incoming documents because you can throw those into the system and let the system chew on those documents for a while: doing concept searching and creating concept groupings to identify the critical documents and concepts that enable you to evaluate the case.

Editor: Are regulators using Recommind’s technology to track down violators?

Sklar: Yes, many of them do. We can’t disclose which regulators use our systems, but I can tell you that we are seeing more and more interest from the public sector. As I often say, you cannot afford to have your regulators know more about your documents than you do. For the first time, using our technology, this is more frequently the case.

Editor: What is next for predictive coding in 2012? What effect will Judge Andrew Peck’s positive assessment of concept searching have?

Sklar: What Judge Peck’s piece said was that while you’re waiting for that definitive case approving the use of predictive coding, take my article as evidence that the judiciary accepts that kind of technological search. There is also a fascinating audio podcast with Judge Facciola, in which he said that concept search has to be used: the math of linear review no longer works. There are too many documents and not enough time. Those judicial statements, combined with Maura Grossman and Gordon Cormack’s data around the inefficiencies of linear review, present the strongest possible case for the value of predictive coding.

Editor: Where does EDRM fit into this new era of information risk?

Sklar: EDRM has served its purpose. I don’t think that people have come up with an equivalently authoritative information governance risk model, but I am satisfied that this is inevitable.

Editor: What effect will all this have on law firms? Does it make alternative fee arrangement profitable? Does it let lawyers concentrate on the case?

Sklar: Companies are demanding alternative fee arrangements (AFAs). Because AFAs reward law firms for efficiency gains, adopting technology that significantly reduces costs makes AFAs profitable for law firms. Besides review time, law firms see gains from seeing senior lawyers spend less time on review. Law firms will inevitably become more profitable as more senior lawyers spend their time winning cases rather than concentrating on collateral – and sometimes unbillable – review tasks.

Law firms are businesses and need to turn a profit. If they are forced into alternative fee arrangements – or voluntarily accept alternative fee arrangements in order to generate business – then they need to create efficiencies in order to make those fee arrangements profitable. Our technology makes AFAs profitable for law firms.

Editor: What are the costs for companies that don’t make proper use of the technologies you offer and what are the benefits for those that get it right.

Sklar: As I have described in this interview, the consequences of failing to use available legal technology can include unnecessary time and expense; while using these advanced functions saves time, money, and resources.

 Please email the interviewee at with questions about this interview.