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E-discovery: What metrics reveal

This article appears in the issue September/October 2019 [Volume 28, Issue 5]
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Metrics tell two stories about e-discovery. One relates to the process and the content of e-discovery—how long does it take, how much does it cost, what types of documents are reviewed, how many custodians’ documents are put on legal hold, what factors contribute the most to costs, and how costs can be reduced. Decisions can be made based on these measures, including whether to handle a case in-house or use an outside resource, and even whether to go to court or settle.

The other story that metrics tell relates to the legal tech tools used in discovery—how much can these tools save in time and cost of litigation, how can they improve quality of output, and how can they be leveraged to create efficiencies throughout the enterprise. Decisions can then be made about whether to invest in new legal technology, change internal processes, or expand the role of metrics to gain further insights.

The role of metrics

Both sides of the metrics story can be used to help predict costs for cases and to plan budgets for future years. This role for metrics is becoming more important because legal departments in corporations are increasingly being seen as business units rather than cost centers. Although they are not expected to be income-producing, they are being held accountable for expenses. Similarly, the cost of outside law firms and litigation services is under increasing scrutiny, so they too need to manage their costs as well as provide feedback to their clients.

The unpredictability of litigation poses some challenges with respect to establishing a consistent metrics program. While organizations in some industries such as pharma face litigation on an almost constant basis and are prepared for it, for others, litigation may be more unexpected. Either way, it is intense and time-sensitive. “Organizations are often left without the time to plan,” said Nishad Shevde, managing director, client operations, at Exterro. “They are in a reactive mode, and the combination of responding to litigation and also measuring various aspects of e-discovery may be overwhelming, leaving little time to step back and evaluate the process.”

Exterro offers an end-to-end platform that covers all phases of litigation, from legal hold through review and production. “The most expensive and time- consuming part of litigation is review,” continued Shevde, “so that is the logical place to start with cost containment, and metrics can help manage that.” As with so many aspects of enterprise information management, volume of data is a key factor. “One metric to look at is how much material is being reviewed, compared to how much is productive,” he noted. “If it is high, then better screening of the content can reduce costs considerably.”

Managing legal holds

Legal holds are generally the first step in a litigation process; when an organization is notified that a lawsuit is on the horizon, it must retain documents that could be pertinent to the case. These might be related to an individual, a topic, or a timeframe. More organizations are taking charge of this step rather than opting for outside services, in order to minimize costs.

“Data volumes are growing rapidly, along with the inherent costs of e-discovery, making it more important to measure and manage them,” said Brad Harris, distinguished fellow for e-discovery at Zapproved. “Organizations also want more predictability and transparency in their processes. They can start with a few metrics and build on them over time. The first step should always be to start with the business goal, such as driving down costs or developing a budget for the future, and then select the approach that best meets that goal.”

Zapproved launched its Legal Hold Pro software more than 10 years ago and has since expanded its platform to include collection, processing, and review. Geared toward in-house legal teams, Zapproved’s platform is designed to provide a simple user interface that allows for easy task management and reporting. “Most companies are tracking general costs,” commented Harris, “but often the reporting is not very granular. By looking at the details, companies can start predicting how much data they are likely to be required to preserve and collect based on the number of custodians, how much will need to be reviewed by attorneys, and so forth.”

Only a minority of companies are using metrics to communicate with upper management, according to Harris. “More typically, e-discovery metrics are used at the departmental level to monitor the volume and pace of e-discovery. The more mature organizations are working with their general counsels and reporting all the way up to the board level,” Harris observed. “If a packet of information is prepared that shows the board how litigation is managed in terms of cost and risk, it is easier to validate the associated business costs.” 

One large insurance company uses Zapproved’s Legal Hold Pro to track metrics such as the number of holds issued, the number released, and the compliance rate in terms of acknowledging receipt, a requirement in legal hold situations. According to the company’s associate group counsel for e-discovery, the legal hold metrics allow the company to anticipate storage requirements for retained information, calculate costs for collections, and identify outliers. For example, in one rather modest sized case, information was put on hold for 10,000 individuals when only 300 were likely custodians of the data needed for the case.

Although the counsel noted that there were some good reasons for erring on the side of caution in this case, the scope was unusually broad. Not only do extensive holds inhibit deletion of that information for years, but unwinding the information for all those individuals once the hold is over may be difficult, especially if subsequent litigation has also put their content on hold. Therefore, metrics that provide real-time insights into the extent of a hold can help a company focus on whether a hold is required or justified.

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