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.

Technology 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.

Labels: Best Practices, CFO, CIO, Cooperation, Corporate Counsel, eDiscovery, eDiscovery Costs, Outside Counsel

posted by Charles Skamser @ 3:01 PM 1 Comments

Cooperation Between Legal and IT Deteriorating

Just when we all thought that communications and cooperation between the legal departments and the Information Technology departments of the Global 2000 was starting to improve, Recommind has released the results of a survey that indicates that collaboration and cooperation is actually deteriorating.  The survey of senior IT managers at enterprises averaging 13,000 employees reveals that IT and legal teams aren't collaborating on buying decisions and question each other's commitment to and understanding of eDiscovery and regulatory compliance.

As the amount of Electronically Stored Information (ESI) continues to increase and the subsequent cost of eDiscovery and Governance, Risk and Compliance (GRC)  continues to increase, it is almost beyond belief that the General Counsel (GC) and the Chief Information Officer (CIO) can’t meet over a cup of coffee and agree to play nicely.   Its actually  a fairly simple task for these two organizations to work together from a technology standpoint.   However, politically, it may be a different story.  Worst case, you would think that, given the financial impact associated with the lack of communications and collaboration between IT and the Legal, the Chairman of the Board or the Chief Executive Officer (CEO) would demand cooperation or find a GC and a CIO that could cooperate?

The full text of the press release from Recommind is as follows:

SAN FRANCISCO, CA--(Marketwire - June 16, 2010) -  Recommind, the leader in search-powered information risk management (IRM) software, today released results from its second annual survey that examines the working relationship between corporate IT and legal departments. While the inaugural survey revealed that a lack of collaboration between both teams was greatly hindering eDiscovery efforts, the 2010 installation demonstrates that this disconnect has dramatically worsened. The survey of senior IT managers at enterprises averaging 13,000 employees reveals that IT and legal teams aren't collaborating on buying decisions and question each other's commitment to and understanding of eDiscovery and regulatory compliance. This further endangers effective eDiscovery and regulatory responses at the exact time such activities are skyrocketing.

While legal and IT have been historically disparate, the exponential increase in content creation and the rising complexities and risks of eDiscovery and regulatory scrutiny have inexorably linked the needs and responsibilities of each department. With the average U.S. company facing 305 lawsuits at any given time -- a number that jumps to 556 for companies with more than $1 billion in revenue -- enterprises urgently need to ensure close collaboration between these critical departments or face massive financial, competitive and reputational risks as result. Recommind's survey reveals that communication between legal and IT has become decidedly worse in 2010. For example:

• In 2009, 67% of respondents described the relationship between the two departments as "good" or "very good"; in 2010, that number has dropped to 54%
• In 2009, 37% of respondents reported that IT and legal were working more closely together than the year before; that number has dropped to 27% in 2010
• In 2009, 40% of respondents stated that their IT department considered eDiscovery to be a high to very high priority; in 2010, that number has dropped to 26%
• In 2009, 82% of respondents said that IT was "very involved" in eDiscovery technology purchasing decisions, with legal being "very involved" 48% of the time.
• In 2010, IT's involvement has remained largely the same, dropping from 82% to 78%. The involvement of the legal department, however, has dropped dramatically, decreasing from 48% to 33%

In addition to measuring collaboration, the survey also examined the formalized processes between IT and legal and inter-departmental perceptions, focusing specifically on how the teams communicate with and evaluate each other. For example:

• 72% of respondents report that their IT and legal teams meet once a quarter or less; 52% meet once a year or less and 23% never meet at all
• When it comes to actually implementing eDiscovery processes, the focus of each department is also quite different: the primary goal of the IT department is "executing as quickly as possible" (35%), while the primary goal of the legal department is "complying with federal regulations and court orders" (61%)

Finally, earlier this year, Gartner Group recommended that global organizations start adding legal support managers -- a hybrid position that helps mediate between IT and legal -- to create policies and schedule and execute eDiscovery processes. It would appear that Gartner's advice is not yet being heeded; nearly 75% of the enterprises surveyed do not currently have this position filled.

"How can enterprises expect to avoid trouble in this hyper-regulatory and increasingly litigious environment when their legal and IT teams hardly talk? Effective responses to regulatory scrutiny and eDiscovery events are too complex, expensive and dangerous to have this level of miscommunication and mistrust between key departments," said Craig Carpenter, vice president of marketing, Recommind. "Having the right technology and processes in place are crucial, but everything starts with communication. Hopefully the fact that these problems are being exposed will serve as a clarion call for enterprises and the industry in general, because enterprises need a real sense of urgency if they want to avoid becoming front-page news for all the wrong reasons."

About Recommind Inc. Recommind's search-powered Information Risk Management (IRM) platform automatically accesses, organizes, collects and analyzes large volumes of information from myriad sources to address an enterprise's critical eDiscovery, compliance, email categorization and knowledge management needs. With faster, more accurate access to and greater control over information, organizations can lower risk, improve productivity, increase the value of information assets, and improve competitiveness and profits. Recommind customers include Bertelsmann, BMW, DLA Piper, Eversheds, Novartis, Shearman & Sterling, and Verizon. Recommind is headquartered in San Francisco and has offices in New York, Atlanta, Boston, Chicago, Houston, Washington DC, London, and Bonn, Germany. For more information, email info@recommind.com, or go to http://www.recommind.com/.

Labels: CEO, CIO, eDiscovery, GC, General Counsel, GRC, Recommind

posted by Charles Skamser @ 9:18 AM 0 Comments

Top 10 CIO Priorities for 2010 Through the GRC/eDiscovery Prisim

As eDiscovery moves into the IT deparments of the Global 2000 as a subset of GRC (Governance, Risk and Compliance), I plan to start talking more and more about the eDiscovery paradigm shift in the context of the IT department. As such, this morning I ran across the results of the The Society for Information Management (SIM) surveyed CIOs and IT executive leaders about their top priorities for 2010, based on a list of 20 IT and business concerns. A great summary of the results of this survey can be found on the Network World website in a Septebmer 25, 2009 article by Denise Dubie titled, "CIOs seek better results, lower costs".

Labels: 2010 eDiscovery Predictions and Trends, CIO, eDiscovery, GRC, IT

posted by Charles Skamser @ 8:13 AM 1 Comments