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Bringing eDiscovery In-house: What Corporate Counsel Wants Versus What They Need

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Monday, January 17, 2011

Bringing eDiscovery In-house: What Corporate Counsel Wants Versus What They Need

2011 will be the year that a significant percentage of eDiscovery technology and services moves “in-house”.  Historically, Corporate Counsel collaborated with outside counsel, litigation service providers, computer forensic companies and litigation technology consulting organizations to have this work completed.  I would suspect that the reasoning or justification behind this outsourcing mentality was a byproduct of the days when litigation required thousands and thousands of boxes of documents to be scanned, digitized and reviewed  using one of the document review technologies.  And, this had always been done by third parties.  This outsourcing partnership was part of the cultural fabric of “how things are done”  and therefore most corporate legal staff didn’t and probably still don’t believe that it is something that should be or needs to be changed.  After all, if its not broke…  However, many casual observers think that it is broke and therefore does need to change.  But, does that mean if you are an attorney / litigator that you need to do all of this eDiscovery technical stuff yourself?

Practicing Law not Technology Aside from the practice of medicine, practicing the art of law has risen to the very top of the intellectual food chain.  However, having many friends that fit neatly into both categories, I have always found my doctor friends to be much more technically savvy and “up-to-date” on available technology than my lawyer friends (please note that I have identified gross exceptions on both sides of the isle).  It may be that the technology demands of practicing medicine have advanced much more quickly than those of the legal profession.  Or, it may be that the healthcare industry has already gone through the technology paradigm shift.

At any rate, and for the most part, this whole new world of eDiscovery, computer forensics, semantic search, automated coding and identifying  Electronically Stored Information (ESI) / potential evidence on Facebook and Twitter has come as a huge cultural shock to most within the legal profession.  After all, this is not something that was taught or required in law school and it not something that the previous generations of lawyers had to know much about.  Well, things have changed!  And so, I get back to my original questions and that it is,  “what eDiscovery stuff does Corporate Counsel want brought in house versus what they need to have brought in-house?”

Cost In the perfect Corporate Counsel world and in an effect to maintain status quo and not tip the proverbial apple cart, I would guess that most Corporate Counsel would just as soon leave things the way that they are and pick up the phone and call outside counsel, their service providers, and their litigation consulting partners to deal with all of this eDiscovery when the need arises.  However, I would further guess that over the past 24 months that corporate counsel has been under intense budgetary scrutiny from the Chief Financial Officer (CFO), the Chief Executive Officer (CEO) and maybe even the Board of Directors (BOD) to slash the cost of eDiscovery.  And, unfortunately, upon further review, most Corporate Counsel have found that “outsourcing” eDiscovery work is needlessly expensive and outsourcing it through your outside counsel is outrageously expensive. With markup minimums of 100%, it doesn’t take a financial wizard to figure out that doing it yourself in-house is going to be much less expensive.  At least from a direct cost standpoint.  So, even though Corporate Counsel may not want to bring eDiscovery in-house, if they want to stem the cost, they really need to.

So, given the fact the Corporate Counsel has to bring eDiscovery in-house to reduce the cost, that doesn’t mean that they even know where to begin from a technology standpoint.  It’s probably one of those classic situations that they “don’t even know what they don’t know.”  However, not to fear because within that very same corporation is another C level executive with the title Chief Information Officer (CIO) and I would bet that there is very little about eDiscovery technology that the CIO and his/her Information Technology (IT) group won’t understand.  In fact, they (the CIO and IT) already have control over most of the Electronically Stored Information (ESI) that the Corporate Counsel may need to meet the demands of litigation.  And, I would also suspect that they (the CIO and IT) have not been particularly pleased over the  past few years as teams of outsiders, under the general order of Corporate Counsel, have descended upon their  “turf” extracting, harvesting and just generally being a nuisance.  Further to this, I would also suspect that they (the CIO and IT) believe that if just given the chance and the budget, that they could do a much better job fulfilling eDiscovery requirements at a significantly reduced cost.  However, that may mean that the Corporate Counsel and the CIO may actually have to talk to each other  and figure out how to cooperate and collaborate.

Cooperation and Collaboration Historically, no one in the legal department really wanted to venture down to the IT department and make an effort to figure out exactly what they did.  Likewise, the last thing that anyone in the IT department wanted was to get a call from the legal department about anything.  I contend that in the spirit of what is best for the corporation and the stockholders that this historically dysfunctional behavior needs to change.   Corporations need to form new multi-stakeholder tasks forces and create new liaison positions to develop and formalize new lines of communication between the legal departments and the IT departments.  It may not be what Corporate Counsel wants to do but it is definitely what they need to do.

I will admit that I have been overly aggressive with my sweeping generalities about the state of the entire industry.  There are in fact numerous case studies of successful cooperation and collaboration of the legal and IT departments in the Global 2000.

I just think that we need to see more of it.  And, despite what some may want, its what the the industry needs to reach the next level of success.

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At January 26, 2011 at 7:53 AM , Blogger David Cowen, president said...

Great article!
Your take on the industry and it's direction is spot on. Now more then ever the need for communication between Records, Info Gov, Info Tech and Legal is critical.
Luckily this process has begun and the continuing financial pressures should keep the pressure on all parties to connect and cooperate and an ever increasing level cooperation. We might even figure out how to manage the Cloud Challanges together.
David Cowen
The Cowen Group


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