Corporate Counsel And eDiscovery: Regaining Control Of The Evidence Management Process

Saturday, December 1, 2007 - 01:00

CEO Chris Kruse recently met with The Metropolitan Corporate Counsel to discuss how CaseCentral reduces corporate costs, drives down risk and empowers general counsel.

Editor: Mr. Kruse, would you tell our readers something about your professional experience?

Kruse: I started CaseCentral 14 years ago. Prior to that I was a principal at a systems integration firm focused on the legal market, and I went on to join a legal technology firm called Joint Defense Data, Inc. I've spent a great deal of my career in legal technology, and have seen many changes over the years.

Editor: Please give us an overview of CaseCentral.

Kruse: CaseCentral helps corporate counsel gain control of eDiscovery through long-term evidence management. We provide a hosted platform that enables organizations to manage all matters from one secure repository in a repeatable fashion, supporting work product reuse to increase consistency and efficiency with every new case while reducing risk and cost.

CaseCentral was founded in 1994 and has been a consistent leader in eDiscovery. In 2006 we introduced Discovery Lifecycle Management, or DLM, which is a holistic view of evidence management for corporations engaged in large-scale litigation or exposed to extensive regulatory response requirements.

In 2007 we were the first to introduce technology to permit corporations to protect their content after having produced to the opposing party. We call this Information Rights Management.

We have more than a thousand customers, many of whom are Fortune 100 enterprises. With respect to law firms, 81 of the AmLaw 100 are CaseCentral customers.

Editor: Can you expand on your statement that e-discovery is "out of control"?

Kruse: eDiscovery is out of control. We have been in this business for a long time. A decade ago the number of documents involved in legal cases or investigations was relatively small. Today, it is very common for cases to involve millions of documents. The sheer volume of data and the costs associated with review and production places a tremendous burden on companies. Further, the need to produce materials quickly has dramatically increased corporate risk.

A company with a billion dollars or more in sales has an average of about 550 active cases on an annual basis. The average number of documents or emails in a case today is about five million . When we started CaseCentral, the average number of documents in a large case was 250, 000 to 300,000.

Needless to say, the costs associated with managing this volume have gone up exponentially and will continue to rise unless a company proactively takes control. The recent Fulbright & Jaworski survey - which is the source of the numbers I have just referenced - also speaks of costs rising about 20 percent a year.

This is a problem that is just getting bigger with the passage of time.

Editor: The Federal Rules of Civil Procedure were recently amended. In your opinion, is this a good thing or does it merely add to the confusion?

Kruse: The new FRCP requirements are good in the sense that the updated rules were drawn up a long time ago - before computers were part of everyday communication. From the perspective of corporate America, however, the burdens associated with having to understand what information it possesses and where it is located are heavy. We introduced our DLM platform precisely to help companies meet this challenge. I would suggest that DLM is quickly becoming a must-have resource for companies today.

Editor: Many of the Fortune 1000 companies use many different law firms. What type of impact does that have on the e-discovery discussion?

Kruse: There are good reasons for a company to use more than one firm, from jurisdictional needs to particularized expertise. There is a problem, however, with respect to control. When information is sent to outside counsel, it ceases to be under the sole control of the company. That is not such a problem where there is only a single outside firm, but with 10 or 20 or even hundreds of outside counsel the problem can become a nightmare.

The preeminent value proposition of CaseCentral's centralized approach to eDiscovery is that we provide companies with a single evidentiary site for all of their law firms. That single unified repository of litigation documents represents an immense advance on what was literally multiple repositories spread across an entire array of law firms.

Seventy percent of the cost of litigation is in document review, and anything that makes that process more efficient is going to have a material impact on cost. When a document is relevant in a number of cases, the system is able to track it for the company and for the relevant firms. Instead of paying a lawyer from each of the outside firms to review documents over and over again, a single review - available to all - saves time and money. We put the company's corporate counsel back in control of the process.

DLM serves to reduce both cost and risk and provides management and oversight by the company. That, in turn, instills confidence and efficiency back into the process.

Editor: How easy is it for corporate counsel to adapt to DLM?

Kruse: Very easy. We can have DLM up and running in days, not weeks or months. We have found that litigation support is seldom a core function in many enterprises, and that corporate IT often cannot put a solution in place quickly. We can.

We deliver an on-demand service over the web, and there is no initial hardware-software acquisition and deployment cost. For many companies our software-as-a-service model results in the service paying for itself within 60 days. It is not a three-year ROI proposition.

Let me also mention predictability. Historically, eDiscovery has been a notoriously unpredictable exercise. For example, one of our customers once received an unexpected bill of three million dollars from the outside firm charged with managing its litigation - much of it related to the mechanics of evidence management. DLM would have been useful in this instance.

Our DLM platform adds a new level of predictability to eDiscovery that enables our customers to dramatically reduce their costs and eliminate surprises throughout the evidence management process.

Editor: You have used the terms "repeatable business process" and "re-use of work product" many times, could you explain these in more detail?

Kruse: A lawsuit is a very disruptive event in the life of a company. With large companies this may occur hundreds of times each year. Rather than react in indignation and surprise, it is necessary that the company build out a business process just as it does with accounts receivable or HR-supervised hirings.

With the amendments to the FRCP, the company must have a process in place to preserve evidence relevant to the case sufficient to convince a judge and the opposing lawyers that it has done everything necessary for preservation and production of documents. The benefits of having such a process in place - a pro-active as opposed to a reactive policy - are well known. What we add to the discussion is that setting up such a process on a macro level, making it repeatable - consistent from one user to the next - is an immense step forward in reducing the disruption that litigation represents to a business enterprise. This is what we mean by the term "repeatable business process."

"Re-use of work product" has two major benefits - cost savings and consistency. Until now, companies were forced to pay hundreds of dollars per hour over and over again for legal review of the same document from case to case. The ability to access the document from one case to the next - to determine that it has been reviewed for privilege and redacted - represents a huge savings for the company.

A second benefit of re-use is consistency. If the company produces one set of documents for one case and a slightly different set for another, there may be a perception that it is not playing by the rules, even hiding information. Inconsistency is something the plaintiffs' bar is quick to exploit and regulators are quick to notice. This is a huge risk for the company. Our unified platform enables consistent review across cases - which is of immense benefit to the company.

Editor: DLM sounds like an approach that any large organization could benefit from, but are there any types of organizations that receive more benefits than others?

Kruse: Our experience is that we can be of benefit to just about any company that faces large litigation risks. CaseCentral customers include many of the world's very largest and most litigious enterprises, but we can certainly provide immediate value to companies with three or four outside firms handling, say, four or five cases each on an annual basis.

Editor: Could you prioritize why corporate counsel should consider CaseCentral?

Kruse: The first point I would make to corporate counsel is that CaseCentral's eDiscovery platform permits them to regain control of a process that is currently out of control.

Point two is that DLM, with its repeatable business process and re-use of work product, reduces costs and delivers a new level of predictability.

Point three is that we help reduce corporate risk. In order to maintain defensible positions, the company needs to have policies and procedures in place that are clearly defined, and evidence must be reviewed and produced consistently across matters.

We developed our DLM platform in cooperation with our customers specifically to meet all three of these major needs - control, reduced costs and reduced risk.

Editor: Is there anything that you would like to add?

Kruse: At the moment many people are focused on "litigation readiness" or "litigation preparedness." Taking control of evidence management is the single most important aspect of litigation risk and is a function of preparedness. The stakes are high - as shown by the $19 million settlement paid by Perkins Coie for inadvertent production of documents during litigation. I am sure the firm had malpractice insurance to cover the settlement, but the reputational damage it has suffered must be incalculable.

Anything that in-house counsel and outside counsel can do to regain control of the process is going to be of significant benefit to the company and, by extension, to corporate America.

Please email the interviewee at info@casecentral.com with questions about this interview.