Cost containment implies both reducing costs and making them more predictable. As the volume of data rises, legal departments face increasing pressure to reduce their budgets, while law firms are under pressure to deliver greater value by offering more services at lower fees and providing greater visibility of the costs incurred throughout the entire discovery process. The need to balance costs against risks is so crucial, that corporations are willing to live with a certain degree of quantified and managed risk in order to reduce their cost of e-discovery. So, how can costs be significantly reduced and yet balanced against risk?

Contributor

• • Caroline Boudreau Sweeney, Director, Practice Group Technology Services, Dorsey & Whitney LLP

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Transcript

Sanjog Aul:
Welcome, listeners. This is Sanjog Aul, your host, and the topic for conversation is Balancing eDiscovery Cost Containment Vs. Risk and I have with me Caroline Sweeney, who Caroline is the Director of Practice Group Technology Services at Dorsey & Whitney. Hello, Caroline. Thank you for joining us.

Caroline Boudreau Sweeney:
Hello. Thank you for having me.

Sanjog Aul:
Very good. So life is treating you good?

Caroline Boudreau Sweeney:
Very much so.

Sanjog Aul:
Great. Yeah, go ahead.

Caroline Boudreau Sweeney:
I was just going to say we’re fortunate enough here in the Midwest that we’re just enjoying very pleasant weather right now.

Sanjog Aul:
That’s great to hear. Now, the topic that we have picked up today, as we all know, that eDiscovery process is cost prohibitive for many, and it’s coming to a point where even organizations sometimes say that, okay, yes, I need to prevent the risk or mitigate it, but I do not want to be breaking my bank with that said, What are the most out-of-control costs or unpredictable aspects of eDiscovery?

Caroline Boudreau Sweeney:
Well, there are any number of studies out there that indicate that the largest percentage of cost in any eDiscovery matter centers around document review and that’s why I think now there’s all that buzz that people are hearing in the industry, in the legal industry anyway, with respect to TAR, or technology-assisted review, or predictive coding, and which is really how can law firms and corporations use a combination of people, process, and technology to save money when it comes to the document review aspect of electronic discovery and there are a growing number of cases in courts that are opining on this particular topic. Clearly, though, what drives the document review costs are the volumes of data that are generated within in the corporation that ultimately are potentially discoverable and can end up requiring to be reviewed in order to fulfill your legal obligations.

Sanjog Aul:
Now, with that said, what inherent risks that you think can get blown out of proportion when an IT leader tries to cut discovery costs, or for that matter, the business leader says, or general counsel or somebody else says that this is becoming too high, so tells the leaders to go ahead and start slashing costs. How quantifiable are these risks, or this is just pure paranoia?

Caroline Boudreau Sweeney:
Well, I think the risks are very real, and there are risks throughout the process that need to be analyzed, I think, in every given situation because they’re unique to the particular litigation or to the particular corporation. A company that is particularly litigious is more likely to take on more of the cost control and the risk management than maybe a company that, has a case every so often, but there are risks. What we see are risks around, for example, collection and making sure that you’re documenting that you have the capability to conduct collection for eDiscovery purposes, that you’re documenting your process. What we’re seeing is that a lot of corporations are taking that responsibility on themselves versus going outside and hiring vendors. A more litigious company and some of our clients are bringing that certain technology in-house to enable them to do this collection process. So that helps contain costs from that perspective. Companies are implementing new technology.

Caroline Boudreau Sweeney:
They need to be thinking about the potential risk of litigation and the fact that the data that’s stored in a new system, for example, rolling out SharePoint, say, how are you going to collect from those, from a SharePoint site? Because the information stored on the SharePoint site is potentially, as I’ve said, is potentially responsive to litigation or relevant to litigation. We’re seeing, companies as they’re moving to the cloud to help manage IT costs, that’s another area where there’s potential e-discovery risk and a need to evaluate where your cloud storage provider is located, whether you’re— is it, you know, international, is it within the US? Is your data commingled with other companies? And if another company, say, was subpoenaed, would your potentially your data end up being subject to collection? What kind of data privacy functionality or capabilities reside in the cloud? So all of those are considerations when you’re and sorry, I’m jumping around a little bit, but another thought with the cloud is if your data is going to be stored in the cloud and you need to collect it for litigation, what is the process and how can you go about doing that? So as companies are looking at cloud computing as a cost control factor, they need to be thinking about the eDiscovery risks that they have there. Another thing that we see a lot is around retention policies or information governance, and you’re seeing, hearing a lot of talk about that these days. What we tend to see is sometimes there’s a lack of retention policy, or there’s a policy, but there’s not necessarily adherence to that policy or there are, you know, I can think of a particular case where the company has email retention guidelines, but given a good business case, you can bypass the retention guidelines and as a result, people have mailboxes of 30, 40 gigabytes of data and that, when it comes to eDiscovery, can drive up because of the volumes of data, it can drive up your cost when it comes to the review side. So understanding and actually implementing and auditing retention policies, thinking about things like holding on to legacy data.

Caroline Boudreau Sweeney:
We had one client where they had years of legacy email data from a another platform, and what they did is they went through their backup tapes and transitioned data that was already under a litigation hold to their current platform and backed it up again from there so that they were reducing the amount of data that they were holding onto that then becomes subject to litigation potentially down the road, and then the other thing that we see and where cases, where there’s been the most frequent number, I’d say, cases around spoliation and in charges by the court with respect to spoliation is companies having some sort of litigation hold technology or policy, and that making sure that there is a way to consistently implement litigation holds across users, across data sources, across custodians in multiple locations, and knowing, having a good sense of where your data resides, because that is a growing expectation, or that is an expectation, I shouldn’t say a growing expectation, but an expectation of the courts that your outside counsel is going to be educated on, and you will be able to educate them on where data resides within your corporation, and oftentimes what we find is that IT thinks that, well, here’s our policies and this is how we do things. People aren’t it’s against policy to store, to create PST files and store them locally, say, when in fact what happens is users are creating PST files, and then saving data beyond retention cycles, and that snowballs back to my opening comments around document review. So kind of a lengthy explanation, I realize, but a lot of different sorts of risks that I think need to be evaluated

Caroline Boudreau Sweeney:
and as I said, it’s really dependent on the company’s litigation profile, I think, in terms of how much risk you’re willing to live with and how much you need to be able to better manage it.

Sanjog Aul:
So let’s take a quick break, listeners. We’ll be right back, and Caroline, when we come back, I’d like to explore if there is a linear relationship between the cost and risk when it comes to discovery process, or rather e-discovery process. If not, then how can one safely calibrate the balance between the two? So please stay tuned, listeners we’ll be.

Caroline Boudreau Sweeney:
We’ll be.

Speaker C:
Right back. Take control of eDiscovery with flexible integrated solutions designed for early data assessment, processing, document review, and litigation presentation. LexisNexis offers comprehensive solutions that work together as well as with other industry-leading tools to help you maintain a seamless chain of custody throughout discovery. Most of these solutions can be offered in a hosted environment with access to fully customizable support resources dedicated to your success. You are listening to CIO Talk.Radio Viewpoint.

Sanjog Aul:
Welcome back, listeners. So Carolyn, again, I’d like to explore this. Where is there truly a linear relationship between cost and risk when it comes to eDiscovery? And if not, then how can one safely calibrate the balance between the two?

Caroline Boudreau Sweeney:
You know, I’m not sure if there’s a linear relationship, but there’s absolutely an association between cost and risk, and I think, as I said previously, that it’s really important to understand your litigation profile and to balance, to make those evaluations and balance the cost and the risk. So, for example, in one of the earlier topics or examples I gave about moving to the cloud, there’s obviously a cost-benefit to a company to doing that. Now, looking at, or typically there’s a cost benefit to doing that, and so then what you need to look at is how do you balance that risk? And I would say that’s making sure that there’s communication with the right people, that the right people are involved in the decision-making process and evaluating the different risks. So involving legal, involving outside counsel, really reviewing your contracts with the cloud provider so you understand things, as I said earlier, like where your data is stored, is it commingled, what your options are for exporting data from the cloud, how you apply your retention policies, etc. Another example might be you’re looking at implementing new technology. We see a lot of clients, for example, implementing, as I mentioned, SharePoint or social media tools.

Caroline Boudreau Sweeney:
And so understanding, again, if litigation were to arise, those are potential sources for data or data collection for eDiscovery. So how are you going to be able to put a litigation hold on the social media site, for example? How are you going to collect from that social media site? So understand— and then, you know, your solutions might involve bringing technology in-house. They might involve working with particular providers, but the idea is to really assess what the overall risk is and understand, as I’ve said numerous times now, understand your litigation profile.

Sanjog Aul:
Now, while there is one thing to optimize your people and processes the way they function in order to mitigate risk and perhaps also lower cost, but when it comes to balancing, do you think the technology solutions that are out there, are they really able to help in this regard? And what type of solutions do you think are coming close to providing some sort of relief?

Caroline Boudreau Sweeney:
Yeah, I do think that there are solutions out there that are helping to balance cost and risk, and some of the things that I can think of off the top of my head include, for example, clients that we see implementing email archiving tools. So, you— email is really considered the low-hanging fruit when it comes to eDiscovery, and by being able to centralize email in a single repository where you— most of the tools have the ability to allow you to implement a litigation hold. So, you’re reducing risk there by centralizing email and typically not then having external email repositories in the form of PST files local to somebody’s laptop, for example, you’re reducing cost when it comes to collection, and you’re reducing cost when it comes to document review, and you’re able to implement— typically, you’d be able to implement your records retention schedule against your email platform or your email archiving solution. So that, I think, is a really good example of technology that helps to balance the cost and risk. We’re seeing some of our more litigious clients actually purchasing tools to help them do collections, so tools that allow them to crawl their network and local laptops and do that initial collection is also another tool or another example, I guess I should say, of technology helping to balance cost because they’re not reliant on external companies coming in to help them with collection, risk because it’s less, and it’s also less disruptive if they’re able to do that internally. On their own, less disruptive to their business process than having vendors come in and do that kind of collection.

Caroline Boudreau Sweeney:
You know, I think looking at what we’re seeing are certain clients looking at legal hold tools so that they are able to successfully implement, monitor, and issue reminders with respect to litigation holds and the data sources and the custodians that they have. Underhold. So those are some examples of technology that, that we see being used successfully in managing both the costs and the risk.

Sanjog Aul:
Now, finally, what interrelationships among corporations, outside counsel, and technology solution providers can get us the best results in your view, in terms of reduced or predictable costs and acceptable risks?

Caroline Boudreau Sweeney:
Well, I’ve already mentioned that, we’re seeing some people bringing the tools in-house, and it’s important that if you’re going to do that, that you also invest in training and understanding how to use those tools. We’ve seen some clients purchase tools and then have them sit on the shelf because they don’t have the resources to become knowledgeable with some of the self-collection tools, for example. We are seeing many clients looking for national eDiscovery counsel. So law firms, a law firm that can really get to know the company, the types of electronic data that the company has, the sources of that data, and are able— the law firm, then the eDiscovery counsel is able to, regardless of whether or not they’re merits counsel on a case, they’re able to defend or communicate the company’s eDiscovery, their electronic data sources and what have you, so that that’s all being managed consistently across cases, regardless of of the law firm that might be their merits counsel. We also see clients selecting their own preferred vendors. So once they’ve done collections, say internally, going to some of the national eDiscovery vendors and having a single point of contact where they can manage, then have that vendor do consistent processing of their data, and they can better manage the costs and distribution of their data with different vendors, and, I started off this conversation talking about document review. Being the most expensive aspect of a litigation matter.

Caroline Boudreau Sweeney:
And what we’re also seeing is that there are a number of both law firms and document review vendors that are working directly with clients and providing technology and staff to conduct document review at a predictable price, whether it’s a per document or a per gig price. So that’s another area that where we ourselves have such a solution and it’s been very successful and very well received by clients because it’s predictable cost when it comes to document review.

Sanjog Aul:
Once again, thank you so much, Caroline, for sharing your thoughts and insights about balancing eDiscovery cost containment versus risk.

Caroline Boudreau Sweeney:
My pleasure. Thank you for having me.

Sanjog Aul:
And listeners, I invite you to find more conversations about eDiscovery on our website at www.ciotalkradio.com/eDiscovery.