Does it Make Sense for Corporations to Bring Litigation Services and Technology in-House?

After having the opportunity to discuss several interesting case studies at LegalTech in New York last week with leading Early Case Assessment (ECA) vendors in which they provided technology for corporations to do their own ECA and then spending some time with the General Counsel of a Fortune 2000 company this week that wants to do his own email archiving and eDiscovery when required, I am beginning to wonder if the proverbial pendulum has swung and corporate legal departments have decided that it is time to bring eDiscovery in-house?

As the amount of litigation, investigation, and regulatory compliance related eDiscovery costs continue to grow at an accelerating rate coupled with the downturn in the world economy, corporations are looking everywhere for ways to reduce costs and eDiscovery appears to be a target rich opportunity.

Businesses and other organizations spent more than $2.7 billion on electronic data discovery last year, and spending on EDD will grow to more than $4.6 billion by 2010, according to consultants George Socha and Tom Gelbmann, who presented their Sixth Annual Socha-Gelbmann Electronic Discovery Survey in a report published last year on Law.com.

Therefore, looking at this $2.7 billion cost from the perspective of a corporate GC with the knowledge that many law firms are marking costs by at least 100%, it would be natural to assume that it might be less expensive to bring some, if not all, of the eDiscovery work in-house. However, I am going to contend that the issue of what to bring in-house and the actually savings is very complex and therefore it is a path the the corporate GC should consider with great care.

As such, over the next few weeks I am planning to compile a list of issues that the corporate general counsel should consider before making the decision to bring litigation services and technology in-house. Following is my preliminary list:

1. Do you currently understand what you are being billed by your outside counsel and other third party litigation services and technology vendors?
2. Have you talked with them about reducing costs?
3. Have you compiled a list of opportunities to reduce costs by brining them in-house?
4. Is this an all or nothing decision or is there some middle ground to bring some things in-house and leave other things with the outside counsel and third party providers?
5. What technology infrastructure will be required?
6. What eDiscovery expertise will be required?
7. Have you considered the issues with being able to provide the "experts" that can prove that they following the appropriate rules in regards to how your eDiscovery collections and processing was done?
8. Are there cloud computing and or Software-as-a-Service (SaaS) based solutions that may provide a cost effective alternative to building and/or maintaining in-house systems?
9. Does your corporation have enough litigation to justify the cost of a full time eDiscovery department and staff?
10. Are there relationships that you can develop with the 3rd party providers that don't require you to do through your outside counsel?
11. Are there viable off-shore solutions that could reduce costs?

This is obviously not a comprehensive list. However, I would encourage any GC's or staff members from corporate legal departments that are considering bringing eDiscovery in-house to respond to and/or comment on this post with their list of ideas and concerns for reducing eDiscovery costs by brining eDiscovery in-house.

I would also like to encourage technology vendors and other third party service providers to respond to and/or comment on this post with their list of ideas and concerns for reducing eDiscovery costs by brining eDiscovery in-house.

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