A Defensible, Secure And Fixed-Cost Managed Review Solution

Thursday, September 27, 2012 - 13:44

The Editor interviews John Thacher, Director of Managed Review Services, TechLaw Solutions.

Editor: Please provide a brief review of TechLaw Solutions’ core services and your client base.

Thacher: We are a full-service e-discovery hosting and processing company that focuses on managed review and operates under a fixed-price model. As a managed review provider, we organize all other discovery services toward the reduction of documents and efficiency of review. The review component is, of course, the largest cost factor in the process. We cover most phases of the EDRM (electronic discovery reference model) in-house, with a notable exception being collections, which are best handled by service providers with specialized infrastructure. We work with well-established partners on this activity.

Because we’ve got such an innovative product, serial litigants are among our most loyal corporate clients. These clients want to fix the price of document review and budget effectively. They are looking at costs from a unit pricing perspective, leading naturally to legitimate questions like why they paid twice as much for one review versus another. Lack of efficiency is the likely answer.

By definition, law firms are serial litigants, so they also are exposed to process deficiencies. Forward-thinking firms have decided either to bring review in-house or to work with a company like ours that has a completely transparent and well-established methodology.

Editor: In TechLaw Solutions’ recent report titled “5 Reasons Your Law Firm Should Embrace Managed Review,” the statement is made that “the current judicial standards for document review and production all have good faith and reasonableness at their essence. The safe harbor for these standards is a highly defined and well-thought-out process.” Please talk us through this statement.

Thacher: When facing a bet-the-company type of document review, expert attention must be paid to mapping out the process of responding to discovery requests. However, timelines are not always reasonable, and it’s difficult for law firms and corporate legal departments to become process experts while focusing on their core legal tasks.

The safe harbor is all about process, which includes not only goals and specific procedures but also how you guarantee that your process is comprehensive and meets good-faith standards. The process should be defined up front, and post-review assessment must either confirm that the process was followed to the letter or specifically outline variations that were required along the way. Variations are often a necessary part of the process. Some cases come forward with one percent of the documents being relevant and others with 90 percent relevancy, so each requires a different strategy. To apply an identical process in both situations is anathema to good faith and reasonableness, though baseline requirements for good methodology and recordkeeping apply in all situations.

Editor: Please talk about how TechLaw Solutions’ log reports tie in with defensibility.

Thacher: Our work is done in the background and underpins the central efforts of attorneys, so our log reports generally are for internal use except in the case of a process challenge. Most information about a specific review is privileged; however, if a judge in any jurisdiction doesn’t believe that good-faith and reasonable standards were met, clients really appreciate that we can produce a log that outlines all decisions and procedures during the review.

Editor: In our last discussion, you mentioned that TechLaw Solutions has achieved ISO/IEC 27001 Information Security Management System Certification, as published by the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC). Why is this important?

Thacher: This is a developing area in the law, and data security is crucial to our clients. Some banking clients actually require ISO certification, and it is an emerging area of interest for other clients, especially those dealing with cross-border situations. Many offshore companies have ISO certification in place, and the fact that many domestic companies do not reflects misperceptions about data security. Further, clients in the pharma and healthcare industries, which store confidential health information, face the specter of huge fines – up to $10,000 per HIPAA violation, so the stakes are very high.

Put simply, dedication to a formalized process is the best option for keeping data secure, and our services are greatly enhanced by the ISO certification combined with permanent staff members who are dedicated to making the process work within the guidelines every single time.

Editor: You introduced the concept of “The 10,000 Document Rule” during our last discussion. Please tell us what this means and how it plays out in real-life situations.

Thacher: The 10,000 Document Rule is simply a way of expressing that each case involves a learning curve that can’t be overlooked and for which there is no shortcut. In the past, lawyers reviewed Redwelds full of correspondence to learn the facts of a case and contemplate a viable strategy. Today’s document reviews are similar, only they are vastly larger in scale.

The theory is that you have to read a minimum of 10,000 random documents in order to be acquainted with enough facts in a given case to create a strategic map. While our clients/firms make the strategic legal calls, they love having us put in the 1,000-plus hours necessary to climb the learning curve. It’s a collaborative process that leverages our lower cost structure and willingness to do the less glamorous work, and that maximizes the legal team’s ability to focus on the substantive legal issues while more quickly developing their overarching case strategy.

Editor: What are the benefits of using automated systems during the legal hold and, more generally, during the preservation process?

Thacher: The primary purpose of having a fully automated system is avoiding information gaps. Once you identify which custodians may be encompassed within a specific litigation, an automated system will know that it needs to access backup tapes and hard drives to ensure that all information is captured to date. The process is not perfect; it cannot resolve a problem, for instance, if a backup tape gets corrupted overnight. However, having a process in place ensures that you did everything possible to capture the information.

Demonstrating this effort goes a long way with judges and, as we used to say, ensures that your side is always wearing the “white hat.” While there are many legitimate reasons to eliminate data for the purpose of protecting a client’s interests, data gaps merely raise suspicion while serving no strategic goal.

Editor: What are the benefits of process-oriented versus technology-specific managed review services?

Thacher: This is a hot topic. Our fixed-price model creates an incentive to use technologies like predictive coding and keyword searching that drive efficiency and address different parts of the review process intelligently – all of which translate to the key benefit of lowering costs. It’s a win-win; thus, we will affirmatively select and use a technology like predictive coding wherever possible. Then we focus on getting the primary inputs right, setting up the review effectively and identifying the document collection that goes on to the review stage. We don’t really see challenges at this level of the process, which attests to its viability. Concerns are more often raised, for example, with respect to skipping documents within a collection, and we look to resolve this issue via use of additional technology, such as keyword searching. In all events, technology assisted review provides a huge advantage on the front end in organizing the data before proceeding to what then becomes a systematic and targeted review. Henry Ford would have been proud.  

On the back end, we perform twice the amount of QC than most managed review companies because errors of any kind may call into question the integrity of our entire process. Being process oriented justifies dedicating our best talent to post-review assessments, and, in the end, these efforts maximize the substantive and cost outcomes for our clients.

Editor: What is the level of judicial acceptance of e-discovery technologies?  

Thacher: The law moves slowly. There is substantial judicial support for technologies that we have chosen to adopt, but it could take years for every judge’s voice to be heard and measured. One philosophy we apply is “bold experimentation without the risk” which means that we explore new options without imposing risk on our clients.

There will always be judges out there who reject a specific technology. This is why it’s important to be able to demonstrate an acceptable level of accuracy at an institutional level, i.e., regardless of technologies used. Accomplishing this will always require the right balance of man and machine to stay within the comfort zone of all parties, including judges.

Editor: Please delve further into the process and talk about real-time metrics and quality assurance. Can these capabilities address concerns about defensibility and the risk of sanctions?

Thacher: Absolutely they can, and their use provides an inherent safety net vis-à-vis the integrity of our process. If you can measure a process, then you can control it and, importantly, demonstrate your level of control to others. The key in the law is to differentiate between perceived control, which is little more than a selling point, and actual control, which is far more complicated, methodical and boring. Actual control involves getting into the fine details, but the resulting process can really insulate attorneys from unnecessary activity and enable them to focus on their substantive work with confidence. For law firms, this applies to partners and associates alike.

QA and QC metrics we use include assessing individual reviewers, not only for their accuracy and reasons for good or poor performance but also to identify individual strengths. Some are good at first review while others may be better at privilege logs. Assessing these metrics and assigning the best talent to specific tasks improves efficiency and accuracy. Again, Henry Ford would approve.

Editor: Finally, give us some additional thoughts on TechLaw Solutions’ fixed-cost structure and what enables you to offer it.

Thacher: Value-based pricing, such as our fixed-cost model, is getting more and more attention. The critical concern before moving to these models is to understand how much time is required to get the job done. Performing this calculation is a very different process with respect to the services that TechLaw Solutions provides than the same process would be for a law firm, for example, in predicting how much time it will take to draw up a motion before the facts of a case are sufficiently known. TechLaw Solutions essentially offers four review-related services: a defined level of first review, project management, quality control assessment, and redactions and privilege logs. Therefore, a fixed-price model is easier to offer in the context of these discrete tasks versus in the context of hundreds of unique tasks that a law firm might perform.

Our pricing was derived based on the average cost-per-document that we calculated from quantitative tracking efforts over five years. Even though certain kinds of cases, like patent matters, have documents requiring higher levels of analysis, we have come to know our processes well enough to be able to control the variability of costs better than most.

We took the leap after aggregating this data and realizing that everyone wins under a fixed-price structure: clients enjoy lower costs for individual matters and greater cost predictability overall, and TechLaw has developed a sustainable business model. Further, we created incentives for great work and fostered shared responsibility for the company’s profitability across our employee base, which reduced our operational costs and gave everyone the opportunity to share in the upside.

The results speak for themselves: we currently operate well ahead of deadlines and there’s no drama involved . . . no up-charges and no overruns. We knew we had a good idea, but we didn’t expect that our pricing model would call us to be great.

Please email the interviewee at jthacher@techlawsolutions.com with questions about this interview.

For further information about TechLaw Solutions, please click here.