Karen HendricksonWhen it comes to the exploding costs and risks of litigation that are a result of the deluge of electronic information available, a counsel general’s office follows 3 mandates: increase efficiency, reduce costs, and mitigate risks. How severe are the problems of inefficiency, high costs, and risk? How are these problems growing or changing? How does a corporate general counsel’s office address them?
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Transcript
Sanjog Aul [00:00:00]:
Very good morning and welcome to CIO Talk Radio. To learn more about the show, please visit www.ciotalkradio.com and while you are at your computer, like us on Facebook, search for CIO Talk Radio and make sure to join our conversation on Twitter in #CTRLive and at CIOTalkRadio and look for this using your #ediscovery. Now, today’s topic is eDiscovery : Cost, Risks And Remedy and our guest for today’s show is Karen Hendrickson, who is a Chief Litigation Support Officer with Hogen Lovells. Good morning, Karen.
Sanjog Aul [00:00:36]:
How are you?
Karen Hendrickson [00:00:37]:
Good, I’m fine, thank you.
Sanjog Aul [00:00:39]:
So I just was talking to you before we started that you are a brave soldier who is working in spite of all the damages that Standy caused. So are things going.
Karen Hendrickson [00:00:50]:
They’re going just fine. We’re out of our house for a little while, but otherwise things are everybody safe.
Sanjog Aul [00:00:58]:
Now what is this causing in terms of the type of changes in the way you do business?
Karen Hendrickson [00:01:06]:
Sandy?
Sanjog Aul [00:01:07]:
Yes.
Karen Hendrickson [00:01:08]:
It hasn’t a whole lot because not much transpired in New York City proper. We did have to make arrangements to have people work from homes. We did have to do a lot of telephone rerouting and do some squeaking on our citrix lines because they were getting overloaded with so many people out of the audit.
Sanjog Aul [00:01:27]:
All right, so of course things will get better and I know that even when these natural phenomenas like Sandy don’t occur, we still have a bunch of turbulence happens in our daily lives and that’s why to some extent, this topic is very relevant, because that’s what’s happening in the world. It’s becoming increasingly complex and we are finding that we have to safeguard our organizations on a regular basis from the legal risks and of course, corresponding costs. So the first question that I’d have for you is what are those top issues that the general counsel’s office sees and or faces or experiences which are really keeping them up at night and are these primarily perceptions or reality and if they are reality, are they self inflicted or there are primarily external factors that are causing it?
Karen Hendrickson [00:02:20]:
I would say that there are some that are real and I would say most of them are real. Some of them are self inflicted. The biggest issue that I see working with clients is their retention policy and their technology, how to effectively position themselves for e-discovery readiness and often they have subsidiaries that have very different infrastructures. So it’s very inconsistent. So whenever there is a document collection that needs to happen, it really can involve many different approaches and can be very disruptive to their work cycle.
Sanjog Aul [00:03:04]:
So is it just about the document collection which keeps it up at night or is there a process issue which is making them not as mature in the way when the legal risk does present itself? That’s when they say maybe we are not prepared.
Karen Hendrickson [00:03:19]:
I think that there always are issues of how much do you invest to get yourself in a position so that if you do have litigation, you’re ready with everybody scaling down to try to install an e-discovery readiness tool across multiple offices locations and have an effective retention policy is extremely complex and costly and I think that often there’s a lot of lack of understanding and so sometimes the funds are not available to do it properly. We often see clients that have purchased one of these e-discovery ready pieces of software, but they don’t have the steps to install them and so they it winds up being just as if they had not done it at all. So you really do need to do a comprehensive analysis with a consultant and have somebody come in and set these systems up and you need to have a lot of time for testing and you need to have somebody on premises who know how they operate.
Sanjog Aul [00:04:24]:
Now you did mention about cost and or the budgets available. So while we have money perhaps allocated for any such legal issues that might come up and we are even investing in the software portion, so where do we fall short in terms of the right investment which is causing these issues in your view?
Karen Hendrickson [00:04:45]:
I would say in the hardware infrastructure and in staff. I think that people across the board are trying to operate on a very lean staff and they have people who have been doing one approach and they may be perfectly wonderful internal IT people, but they don’t understand the nuances of the legal aspect of discovery and so they’re just not equipped to really step these things up and maintain them and test them appropriately from a legal perspective. So you really do need somebody who has e-discovery knowledge and an understanding of the litigation life cycle.
Sanjog Aul [00:05:28]:
Now is this a catch 22 for general counsel’s office that damn if I really bring everything in house or damn if I don’t because cost in either case is going to be really creating a headache for me. What is, where are they saying which is a better poison to take?
Karen Hendrickson [00:05:43]:
I’m seeing more and more firms bring these tools in house and the reason is when you have litigation you can often have multiple issues going on at the same time. So you could have people on site collecting laptop data, really packaging the IT schemes to export email and home drive files and you could have people on the premises a lot that really just interferes with the work cycle. Also, if you don’t have your retention strategy set up in an effective way, your systems are constantly overloaded and somebody needs to really look at this and look at these issues of volume and put them into a system that might, for instance, deduplicate on the way in something so that you’re already. We’ve already sifted through a lot of these processes that will serve you well when you do your exports for processing by your law firm, because you could have already minimized your volume by 70%.
Sanjog Aul [00:06:52]:
Now, when you speak about costs, the cost could not necessarily only because the documents are not stored properly and or we do not have the right tools to search them, are there any peripheral costs which might be latent costs, but they are the ones which may be causing the true leakage.
Karen Hendrickson [00:07:12]:
I’m not sure I understand exactly what you’re asking. Do you mean costs of the litigation itself?
Sanjog Aul [00:07:18]:
See, the reason I ask this question because we immediately say that, okay, e-discovery has a cost or the very litigation process has a cost. So there are costs regardless which one is causing the most headache because we say cost and risks and we want to balance the two but where is the cost really coming from? What is, which is before, what area are you signing the biggest checks for?
Karen Hendrickson [00:07:41]:
I would say that the biggest checks are signed at the time of document review and by staff attorneys and associates at the law firm and the only way to effectively get those volumes down is to have an appropriate way to minimize your documents as they exist within the company. Again, perhaps deduplicating things on the way in, having them indexed properly so that you can search documents with a better relevancy hit and then when you go through the process, you’re already minimizing the volume that starts because if you just throw everything in the kitchen sink in every step of the way, that undue volume is going to follow you and haunt you and cost you a lot of money between running key terms searches, between processing it, between hosting that data in a database and paying people for months to go through documents, many of which will be highly irrelevant and duplicative on some level.
Sanjog Aul [00:08:46]:
Now, hindsight is 2020 for most of us, and there are organizations who may have faced a litigation, and that’s when they went through this ediscovery process and they found that the origination of the data or the way it was cataloged or coded wasn’t appropriate and that’s why when we did come to this juncture where we have to perform e-discovery. It was coming out to be cost prohibitive. So the general counsel’s office, some of them who have faces, great but others people are listening to horror stories from other organizations. So their counterparts, what are they doing to tell people within the organization and or to their IT team to make sure that if at all, in the event they do have to go through this wrong or a bad type of an event or a litigation for that matter, they do not have to worry themselves with documents which they cannot figure out what to do with them.
Karen Hendrickson [00:09:39]:
I think that they are that most firms that we deal with or most companies that we deal with are casting their IT teams to come up with an approach that house the data in a way that you can target your documents more easily, that they’re tied more to the individual business unit often and this, we see this a lot in pharmaceutical companies and science companies. They have huge networks with just servers with unstructured data and that’s really the biggest problem. So I think most in house teams are asking that their IT come up with a more formalized structure and set parameters around how people can store data, where they can store data. For instance, a lot of firms prohibit any storage of anything on local hard drives. You’re not allowed to write to your C-drive or you’re not allowed to attach to your USB port. They block those.
Karen Hendrickson [00:10:42]:
That way it minimizes all the duplicates. Say if somebody makes a backup of their Outlook every week and then you have 50 PSCs only with a 10% differential, you still have to process all of those files and those costs add up quite a bit.
Sanjog Aul [00:10:59]:
Now, do you think IT would of course want to listen to what the general counsel’s office says and does try to implement but there is always something or the other happening at the very business user level which may cause you heartburn later on because then that’s where you find where the problems are. So do you think IT and legal organizations within a corporations are really able to work together and finally get to that effective ideal state, if you will?
Karen Hendrickson [00:11:28]:
I think it’s difficult. One of the issues that I see is that they take two IT guys and who have never done this before and tell them to do this project without really understanding the scope, without allowing them the appropriate budget or the appropriate training in order to get themselves up to speed. I also think that there’s not enough interviewing of the end users and what does it mean when their inbox is restricted to a certain volume? What does it mean that they have to put out a sign of profile for every document that they put into the system. If you make a structured outlook file site template, how often does that, how many people does that work for and how many people are miserably frustrated all day with how that looks because the IT people get those call?
Sanjog Aul [00:12:23]:
All right, so let’s take a quick break. We’ll be right back and then look at, we look at the cost and this word cost is of course everybody gets concerned about, but is it only about the cost or we are actually able to or we are essentially in the pursuit, overzealous pursuit of reducing the cost, we are unknowingly creating more risk for the organization and in whether it is a cost or the risk, when we are talking about legal department as well as the IT department, who should be holding the bag, who should be accountable to looking at both of these areas and make a decision. Please stay tuned listeners. We’ll be right back and explore.
Sanjog Aul [00:14:25]:
Welcome back. So in the first segment we spoke about cost and that is what has been giving people the headache or a perceived headache but then what about the risk aspect of it? Do you think we could just be trying to squeeze the penny and in that process increase risk which could have its own direct and indirect costs? Karen.
Karen Hendrickson [00:14:44]:
Yes, I think that if I do think that you need to be careful that you look at what the legalities are as far as really trying to trim your volume. You need to stay on top of industry trends and you need to make sure that you’re not deleting items or going into consistent changes without appropriate documentation that for instance, I’ve seen companies that migrate all of their email but they didn’t do it effectively. Even though there could be an ongoing litigation, you have gotten rid of all of your evidence and you could get yourself in a lot of hot water from affiliation perspective and I do think that there isn’t enough understanding of what those rules are and what the commonalities are of how this work is done and that you really need somebody with an e-discovery background who talks to the general counsel. I think that’s where the law firms have a niche market that is going to continue to grow.
Sanjog Aul [00:15:55]:
Now Karen, you must have observed the IT department at a corporation and or the general counsel talking to each other. What’s the conversation like? Who is telling who what to do?
Karen Hendrickson [00:16:08]:
The law firms are generally doing the thing for the company.
Sanjog Aul [00:16:13]:
Okay, and then how’s the conversation going between the IT and the general counsel’s office with respect to e-discovery?
Karen Hendrickson [00:16:20]:
I think there’s more open dialogue but I still see instances of the ITs has given their marching orders without an understanding of the complexities, without doing appropriate interviews of the user base and without allocating inappropriate budget or getting somebody on board to guide the IT through the installation because I work a lot in litigation support, I’m quasi IT and often I’m quite stunned at how little the IT team really understand what we do. They know what we do, but they, their world is very different and a lot of the rules that are set up by the IT teams siamese, the e-discovery people and the e-discovery goal and I think that there’s just not enough joint communication. It’s more I need this, go get this done and not allowing for a full blown discussion.
Sanjog Aul [00:17:21]:
Karen, there are gaps and as you mentioned, like they may not understand it and they’re just given marching orders and things are done with the best of ability and knowledge that IT people and the leadership would possess but when it comes to a situation where you have litigation and you are looking at what kind of documentation and checks and balances were put in place and they were not in place to the degree that you expected. Who holds the bag, who gets fired and or gets their hand slapped.
Karen Hendrickson [00:17:51]:
I would say it would fall more on the general counsel’s office. Often IT is not when they’re doing a migration or a system upgrade. They’re not necessarily focused on impending litigation. They’re just told that their systems are about to crash or they need to. They have other user bases that are like this system’s outdated, you’re not doing your job. You need to get this stuff fixed up and up to date. We’re behind the times and they’re not necessarily focused on that.
Karen Hendrickson [00:18:20]:
So I would say that, every general counsel’s office needs to have somebody in house that understands this. They need to have an e-discovery director who can work with it and start to outline some of the pitfalls when they’re doing upgrades and migration assistance.
Sanjog Aul [00:18:37]:
Now you mentioned that there should be somebody on the legal side. Now are they the type of. Would they be your counterpart like you are litigation support lead for a law firm? Similarly, would you have a person with your type of background in a corporation working in general counsel’s office directing and or working with IT to make things happen?
Karen Hendrickson [00:18:56]:
Ideally yes.
Sanjog Aul [00:18:57]:
And when you use the word ideally that’s a qualifier. So is that not done so?
Karen Hendrickson [00:19:03]:
I don’t see it always, but I’m seeing more of it.
Sanjog Aul [00:19:07]:
Okay.
Karen Hendrickson [00:19:08]:
And so that’s yes. Sometimes I see companies take somebody from the inside and designate them the e-discovery person and sometimes that works and sometimes it doesn’t. You often need to recruit from the outside and find somebody who has an in depth knowledge of these areas and have them work with the attorneys so that they can relay the importance of the e-discovery rules and why they need to do these things and to advise the general counsel on why they need different budgets and to work with IT on timelines and approaches and documentation. I’ve seen more people in that role within corporations, but I wouldn’t say it’s universal.
Sanjog Aul [00:19:51]:
Now when we do look at e-discovery process and there is a tendency for it to always be compared whether it is better done in house or outsource and somehow the very basic premise of these conversations that are happening all over is that people say the law firms end up charging a lot more or there is a lot more cost involved, when we were to get e-discovery done at a law firm versus doing in house, is there a reason why that cost is high just because you have the right type of eyeballs from the get go are looking at it or are there inefficiencies at a law firm level or there is actually that much work involved, but people just simply don’t get it that even if they were to do it in house it will be comparable too in terms of costs.
Karen Hendrickson [00:20:37]:
I think that it takes so many people and such a dedicated infrastructure and support teams to be able to bring these processes in house. I personally don’t necessarily think it makes sense if you have a vendor whose sole job is to process e-discovery. They often will take them five years to get an installation of something like irrelativity and to really work with it and integrate and a front end interface tool and make it so that it’s quick and that all the kinks that’s been worked out of it and that they can support it and they have enough people on site who can guide either the clients or the law firms during the process. Even as this debate happens also within law firms whether we should be doing processing in house, it’s generally from my perspective, not that cost effective. Certainly we have capabilities in house. We have the ability to process data. We have several robust tools like law to process data but I don’t think that it, I don’t think law firms necessarily are doing the best thing if they want to turn themselves into a processing shop.
Karen Hendrickson [00:21:56]:
I think it takes too much of a headcount, it takes too much of an investment and the technology changes so quickly that often by the time you get up and running, you’re already out for the lead.
Sanjog Aul [00:22:08]:
If you were to stand outside of your current role, that is representing a law firm and become an unbiased independent consultant and you were invited by a corporation to say I need help with e-discovery costs and risks, what would you do to say help me help you by getting some things done at the corporations level and not send a whole lock, stock and barrel to the law firm so that only the right pieces are sent to the law firm for the right quality of processing. So you get best of both worlds and in that process perhaps bring some efficiency, some reduce cost as well as reduce risks.
Karen Hendrickson [00:22:47]:
I would again look at an e-discovery readiness tool that would allow you to index your data as it is created, set up parameters to limit what individual users can do and store locally, and make sure that there’s somebody in charge of working with the outside counsel to review statements of work, look at what vendors are using, look at pricing, and also to make sure that things are tracked internally. The biggest piece of all of this is to get appropriate documentation outlining why you did what you did. I work for a major pharmaceutical company at my last firm and we collected some of those people’s hard drives over and over again and it was just a waste of time. It got processed many times and it was very difficult for them to track when they gave a person X’s hard drive and, and often by the time you collected it the next time it was not the same drive. So there needs to be a way to keep these. A lot of big companies keep retained drives in house already for some of their key players so that you can just give it out to the different law firms for the different litigation that person happens to be involved with.
Sanjog Aul [00:24:06]:
Now, we spoke about some inefficiencies or some areas that a corporation could reduce the overall footprint of the type of documents and data that they need to be presenting to the law firm. Now once the data does reach the law firm, are there any issues with that side of the house which could otherwise be causing some cost escalations and risk increase which many people complain about?
Karen Hendrickson [00:24:30]:
I’m sorry, could you repeat that again?
Sanjog Aul [00:24:33]:
So the law firm. So you got received the data. There were some issues at the corporation level. Now the data and documents that you ask for as a law firm to perform the e-discovery processing reaches the law firm and there your own crew is working. I’m not saying particularly your organization, but any law firm. Are there specific areas or gotchas or pitfalls that a law firm has to watch for which could be unknowingly increasing the cost as well as risk for their customers?
Karen Hendrickson [00:25:01]:
I think that people need to spend a good deal of time analyzing the data, what they’re really looking for, determining key terms in advance and coming to a really people should be agreeing on these. The meet and confer gets a is not used as effectively as I think it could be. Everybody saves a lot of money if you can’t agree on key terms in advance. If you’re going to guess at your key terms, you could wind up having to do all of these machinations where you do one run and then it turns out that’s wrong and the judge makes you search for this but you need to be what you’ve already reviewed, but it could be in the same document. It does have a lot of wheel spinning. If you can get that agreement up front, I think you save a lot. Everybody should be looking at two tier processing from my point of view so that you’re running key terms and that you’re deduplicating from the onset.
Karen Hendrickson [00:25:58]:
Another area that I think that the that people don’t see from the vendors that I work very hard to make sure I never see on a bill is paying for inflated volumes due to the nature of PST. When vendors blow these PSTs out in order to run the search terms, their volumes can increase two to three times what the original source is but then it immediately drops because they sift out all of the duplicates. I don’t think that the client or the law firm should pay for that inflated volume and I think it also throws the budgets out the window and many of these vendors who do this give very inexpensive dating type pricing for this and you wind up still paying more than you would have if you’d gone to a more reputable vendor.
Sanjog Aul [00:26:46]:
So it’s the vendor selection and your whole ecosystem may be at a corporate level and or at the law firm level. Whatever type of solution providers and vendors that you choose is going to become crucial to how well you deliver on the e-discovery process. Am I correct?
Karen Hendrickson [00:27:02]:
Yes.
Sanjog Aul [00:27:03]:
All right, so let’s take a quick break, listeners. When we come back, let’s look at what if we did everything we were supposed to do, maybe at a corporation’s level, within the general counsel’s office or at a law firm, and then the final resulting evidence that is presented is inadmissible, what then? What do you think could be happening there because of which we had these type of instances go high in number and frequency? Who’s responsible for preventing such an outcome and also should be varying the related costs? Let’s explore that when we come back, stay tuned.
Sanjog Aul [00:29:04]:
Welcome back. So despite bills having been paid and the resulting evidence may be inadmissible, what do you do then? Could such a result be recognized before the cost got so high or out of hand? Who’s responsible for preventing such an outcome and where’s the cost and where could things be going wrong for something like this to happen? Karen, why is this happening?
Karen Hendrickson [00:29:30]:
I’ve never seen that happen. To be Honest to the kind of degree I think that the case is morphed over time and that’s why we generally collect a little more broadly than we think we might need to. I would say if you were to ever come to that kind of situation, it would certainly be both the general counsel and the law firm’s responsibility to know what types of documents that they’re going to be able to use in their case and that they could be in sync and having conversations about what types of documents are going to be or the courts are going to allow. That’s definitely a lawyer question.
Sanjog Aul [00:30:11]:
Now, do you think when you mentioned that you’ve not seen this happen? So this is like few and far between type of instances and it should have no bearing on how the corporate general counsel’s office processes the very source data and how law firms process the evidence, eventually churn out the evidence without any fear that this is truly being admissible or the percentage is way too low for you to really lose your sleep over it.
Karen Hendrickson [00:30:35]:
I have not seen that be a big issue.
Sanjog Aul [00:30:38]:
Which is a good thing to know that all your money was not sent down the drain. No, totally understand. Now when you do talk about this whole process and you did mention about people using software or technologies or solutions, what’s the landscape looking like right now? What type of solutions are best for handling this whole e-discovery process? May it be at the corporate’s level and or at the law firm’s level.
Karen Hendrickson [00:31:06]:
I think that there is a big move towards this computer assisted coding and that is because the largest part of your expense is in the attorney review of these documents. Even if you use outside agencies for a fraction of what an associate bills, these costs can go up into the millions quite easily. What I see people wanting to do is to refine how they use their key terms and use them to use computer assisted coding functions to train the documents that and the reviewers so that they can really start to automate a little bit the basic relevancy calls. You’re always going to have privilege issues and things of that nature that you’re going to need hands on, but the linear review is not necessarily going to be what I think people do in the future.
Sanjog Aul [00:32:04]:
Do you think this is not truly a magic bullet where you just have a software go through everything and have an attorney come at the last moment, just take a cursory look and be done with the discovery process?
Karen Hendrickson [00:32:16]:
No, I think you need to have the attorneys at the front end and I think that’s one of the misnomers of computer assisted coding you need to do the work on the front end. You need to establish what your issues are and what kinds of documents you are interested in and train the system on the front end.
Sanjog Aul [00:32:36]:
What type of solutions technology solutions would you truly at this stage of evolution, wherever they are, which are promising some, they’re promising some success or a good aid to the discovery process, which ones would you keep in your arsenal?
Karen Hendrickson [00:32:53]:
Probably one of the least aggressives is the relativity analytics. I see a lot of people using those because you can take advantage of some automated computer assisted coding of documents, but you’re not just funneling something through with a set of rules and having something spit out the other end. This way you can from depending upon the sensitivity of the case, some people might want to lay eyeballs on a majority of the documents and you certainly want to identify which ones you’re going to produce now and keep the other ones at bay and here if they’re said determine that there’s 90, 97% chance that they’re irrelevant. You can always put them to the side without risking withholding your documents. You can do things in a very smart methodical way that doesn’t put you up for any kind of a sanction or accusation of withholding documents. It’s just critical that you do have appropriate documentation and that you do have a more senior person on your team. Do the initial training of these systems.
Karen Hendrickson [00:33:58]:
I think often they have the lowest level person on the case team duties and it’s not effective. You need to have somebody who really knows the issues of the case stand a little upfront time training these document tools.
Sanjog Aul [00:34:12]:
Now we did have a LinkedIn conversation a couple of days back where people were suggesting different solutions and we were talking about that DIY the do it yourself. We take pride in doing things ourselves many a times but to what degree would you recommend DIY to a general counsel’s office? I know this might be, this might cannibalize into your revenue stream, but still from an outsider since you also represented a pharma organization in a similar capacity. So would you have brought e-discovery in house and or selectively done it in house?
Karen Hendrickson [00:34:49]:
I think that it’s a good idea to have, like I said before, to have an e-discovery consultant director of some kind in house. I think that for small cases it might make sense to have some limited processing tool like a, an egante or a law processing system so that you can get things down and dirty into something like a concordance or summation or some people are even Doing that in relativity, in house, so that for cases that you’re not quite sure where they’re going to go, so that you’re not spending a ton of money on something that might fizzle. I think that there is a place for that. You just have to, you generally are not successful if you’re going to put that on the backs of the people who are already there, just because you don’t want to increase your head count and tell them now they have to learn this new skill. Sometimes that works if she and somebody who’s highly motivated and interested but often you just have somebody who becomes honestly more of an impediment to getting things done from the law firm perspective.
Sanjog Aul [00:35:54]:
Now, the type of people you mentioned that you should have an e-discovery director just getting one person who understands both sides of the coin, which is the technology as well as the law, is that just about enough or there are some other upfront readiness checks and or readiness measures that we should put in place before someone even contemplates bringing the whole e-discovery process in house or even selectively.
Karen Hendrickson [00:36:18]:
I do think that people need to look at tools such as eVault. There’s a lot of these e-vaulting tools that can be installed for both the emails and non email type documents and have a set up in advance so that you can get to your documents when you need them. I think that is something that’s very important and that also doesn’t result in a fire drill for your IT team every time you have to do a collection and it also allows them to understand a little bit more what you’re trying to do. Sometimes I’ll get stuff searched without any conversation. I’ll have things searched in Outlook that are not really valid searches. They have not given me what I need just because they’re so busy or they roll key terms and give you one giant PST, not broken down by custodian because nobody’s bothered to communicate with the IT team exactly what we need.
Sanjog Aul [00:37:17]:
So you did mention about putting a tool or two. What about the very process would you do? The same old approach to handling any kind of litigations or related processing or if you’re thinking to prepare the organization for doing a DIY e-discovery, what process changes would you make?
Karen Hendrickson [00:37:38]:
I think that there’s only so much that you’re going to be able to do yourself. So no, I wouldn’t really change too much. You would have perhaps a couple of states of law or e-scan it or some kind of a tool and so that you can do a limited number of files in house if need be. I don’t necessarily see the benefit of setting up this full processing shop in house. I just don’t think that you get the kinds of efficiencies that you get when you have to have all of those labor costs when you could just pay somebody, if the prices have gotten so low, you could pay somebody $300 a gig to process everything including key term searches and it doesn’t necessarily make sense to bring that in half.
Sanjog Aul [00:38:24]:
And if you were to do the math in where we either try DIY or compared to do only incremental or selective processes brought in house and rest is sent to the law firm, has anybody done any research in that regard to say what’s the net profit in or a net savings you could get by things at least to some degree in house versus giving lock, stock and barrel to an outside agency, like a law firm.
Karen Hendrickson [00:38:50]:
I have not seen those studies. I do know that there are firms that say that they do all of that in house and that they charge by the gigabyte as a vendor does. I think there’s so many exceptions to every rule in those instances for people who don’t want to be billed for that time by their law firm or in house. I think that it, I think it can create a conflict of interest as well in some areas and I do think that there is always the issue of an arm’s length transaction between your processing and your productions that should be maintained for the safety of the corporation.
Sanjog Aul [00:39:33]:
All right, let’s take a quick break listeners, will be right back and let’s look at this whole e-discovery process. Whether you do it in house and or start working with organization outside or within a corporation, legal working with IT, this is a change management issue. People have not traditionally worked as closely but now they are required to and it doesn’t happen overnight. So what does leadership at both legal and IT side have to do to prime their staff and also align their processes so that it is not too much of a challenge for either party and it becomes a good working relationship internally with the corporation and also then with any of the outside providers who are helping out? Please stay tuned. We’ll be right back.
Karen Hendrickson [00:40:17]:
Thank you.
Sanjog Aul [00:41:43]:
Welcome back. So here comes the change management that is required perhaps at all three levels. The general counsel’s office within a corporation, IT department within a corporation, and the legal firms that are supporting the cause with respect to e-discovery. So Karen, what is it at the leadership level should change or must be done and must be done in order to make this a success because people at the operational level can keep remaining busy, but that may not result in the intended outcome. What have you seen the trends and or patterns in the organizations who have really pulled this off successfully?
Karen Hendrickson [00:42:24]:
I would say I can speak from a law firm perspective as well as in health. For instance, when I came on board here at Hogan Lovells, we brought, we created this practice support group and there was a lot of support from key managing partners to say we have these issues, we want to have oversight, we’re going to invest this kind of staff, we’re going to invest this kind of money in infrastructure and have somebody whose job it is on a senior level to support these initiatives and try to push them through the firm so that people are all doing things consistently and everybody has an opportunity to understand why we’re doing what we’re doing. The same thing should happen in house. I really think that the attorneys like to do their own thing. That’s just the nature of how they are and they often think that a lot of what e-discovery entails is more of an impediment than a health and you need somebody who’s got a good personality, who’s got a good interest in this, who can go out and sell this to the attorney so that they understand why and that they get interested in it and they also feel risk averse enough to not want to short shrift the processes
Karen Hendrickson [00:43:46]:
and you need to have people at very high levels who actually believe in this, who are willing to spend some time having side conversations with people who don’t need a relevance of this. People like me in the e-discovery world, you frequently get comments from senior counsel that I know nothing about that. Don’t care about it, never going to do it. That takes a lot of marketing and patience to try to get through to those people so that you can, as a firm, have a projection of how you handle technology on behalf of your clients in a comprehensive way.
Sanjog Aul [00:44:18]:
Now, this is not very old phenomena while we had been doing discovery process, but e-discovery is relatively new. You cannot truly find as many leaders who would have prior experience doing it but what would be the type of traits you would look for at all those different ends so that the end result is desirable if you were to bring people on board as leaders?
Karen Hendrickson [00:44:42]:
I think that you need somebody who’s interested in technology. You need somebody who understands the connection between the marketing of your firm and of your company and how it ties to being up to date with technology. I think it’s no longer considered hip or okay to have no knowledge of what’s going on. Attorneys are required to understand this and the rules have been quite clear that lack of knowledge of how these processes work is not an excuse for not following appropriate industry standard procedures. So I want somebody who knows technology, understands the risks, knows how to let people who do this, like me and people under my team do it, enact best practices and give them the support with an appropriate staff that they need to get this done and do road shows and internal training to let people know why this whole industry exists and why it’s really important as a firm to pay attention to it.
Sanjog Aul [00:45:51]:
Now, truly, is this wild west or are there any standards and benchmarks that have already been established which someone can look up to because there are people who want to do this, they’re on the fence, but they don’t know how. So has something been developed or is something in progress, which is one version of the truth on how you go about in a best possible manner, handle e-discovery processes, whether in house, DIY or outsourced.
Karen Hendrickson [00:46:15]:
I think there are developing standards. There still isn’t enough of a playbook for my taste, but we’re starting to get there. I think you have the donor conference, you have a lot of think tanks. There’s an organization that came up kind of AEDDs that now has mechanisms for e-discovery people to kind of look at what the basics are. I think that there are best practices that are at play and there are books. When you look at the rules of civil litigation, they’re vague, but they do give you some pretty solid outlines and I do think there are developing standards that are acceptable and some that clearly are not and it’s not quite the wild west. It’s not quite firmly established yet either.
Karen Hendrickson [00:47:08]:
I think it’s still a little bit in the middle.
Sanjog Aul [00:47:11]:
When it comes to the policies and compliance mandates. Is government really helping? Are the policymakers really helping making this a realistic, doable initiative or is it only causing us more heartaches and more sleepless nights?
Karen Hendrickson [00:47:28]:
I think that the government agencies have too many variables. From my experience, you have the DOJ does things one way, the SEC does things another way between at the SEC, between different agents, you’ll have different requirements on how people want to receive data and different levels of knowledge. I think there’s still a ways to go to standardize that. I think that clients and law firms both feel frustrated that even though you’ll have a production standard that the DOJ will issue, there’s still a lot of widow room and a lot of openness that makes people feel that they’re not always 100% sure that they’re incompliance and I do think that these agencies need to and the courts need to be a little more specific going forward.
Sanjog Aul [00:48:20]:
So overall, what do you think? Can these all different entities, maybe the stakeholders, general counsels, legal firms, technology solution providers, as well as policymakers can do together or in their respective roles to make this e-discovery a more manageable and cost effective process and it also helps reduce the risks or safeguard controlling risks.
Karen Hendrickson [00:48:44]:
I think if, and this may be counterintuitive to how attorneys want to approach things. I think if we can just jointly within a litigation, establish some ground rules, you don’t have to fight over the e-discovery and everybody can lessen their burden. Often it’s a money game, so people are fighting and putting undue demands on and just as a way to get the other side to back down and I know that’s part of the law, so I don’t want to tread into what case strategy is but sometimes I see costs escalate in a way that is just not necessary based on just a lack of understanding and a lack of wanting to sit down and go, in this particular case, the discovery is not going to make or break the case. Let’s minimize costs on all ends.
Karen Hendrickson [00:49:35]:
Let’s try to do this together and cooperate. Sometimes the area of discovery and what’s happening is going to be critical to the case and then that’s going to be something that you’re going to want to use as part of your case strategy, but I think there’s at least half the time where people could come together, agree to minimize, focus their discovery demands, and be a little more reasonable so that both sides can gain.
Sanjog Aul [00:50:02]:
On behalf of our show and the listeners, I’d like to thank you so much, Karen, for sharing your thoughts about e-discovery and its related costs and risks and what remedies can be utilized to make it a more manageable process.
Karen Hendrickson [00:50:15]:
Thank you very much for having me.
Sanjog Aul [00:50:18]:
Thank you so much again and listeners, please join our conversations on LinkedIn, like us on Facebook if you enjoyed this conversation and also follow us on Twitter. Thank you again for listening to CIO Talk Radio. This is Sanjog Aul, your talk show host. Till next week take care and god bless.
