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Scaling up for e-discovery

Recent court cases involving vast amounts of data have placed new demands on those in the legal profession to manage large collections of documents. Typically in a lawsuit, the defendant is asked to produce documents that are relevant to the case, a process that is referred to as "discovery." Turnaround time is often very limited, and penalties for delays can be high. In March, the Bank of America was slapped with a record fine of $10 million for delays in producing some documents and destruction of others.

Discovery now accounts for a large part of the costs associated with litigation, and those costs are borne by the defendant. Defendants in lawsuits, therefore, have looked for ways to make the process of discovery both rapid and accurate. Frequently, law firms rely on litigation support companies that specialize in the discovery process to handle large cases, which increasingly are the norm.

Documents subject to discovery are selected according to specified criteria that might include particular time frames, topics and individuals. Once the search is conducted, the defendant reviews the documents to verify whether they are relevant, and if so, whether any are considered privileged and therefore protected from release. The review process is labor-intensive and requires significant human intervention. A team from within the law firm or from an outside litigation support company conducts the review. Then the documents are passed along to the plaintiff for analysis.

In the past, the discovery process was paper-based because documents were in that form. However, now more than 90% of new material created is in electronic form, so the discovery process has become "e-discovery." Entire new categories of documents such as e-mail have been ruled fair game for discovery, making discovery more complex and time-consuming. To add to the challenge, most companies do not have a process in place for responding to lawsuits, so in the event of multiple suits, each one is treated as a discrete incident.

Hunton & Williams

A client of the law firm Hunton & Williams was faced with a document request related to regulatory approval of a transaction. The governmental agency was requiring the client to produce a large volume of electronic data within a very short time. After exploring several options, John W. Woods, a partner at the firm, opted for CaseCentral. That hosted solution offered Hunton the ability to staff up quickly with a group of 40 attorneys to support the required review process.

"The regulators wanted certain categories of information," says Woods, "and the project was very data-intensive." The flexibility to scale up rapidly was a major benefit to the client. Also, attorneys in different offices throughout the country could view the documents securely online.

The CaseCentral application provided a method of quickly cycling through the documents as they were reviewed. The interface presented dropdown menus that allowed attorneys to mark documents with indicators as to whether they were relevant, privileged or requiring a higher-level review, among other notations.

"If you can move through these documents 20% faster because of a user friendly interface," points out Woods, "you can reduce the cost of review based on labor savings alone." In addition, the system automatically recorded the document ID number and the name of the reviewer, and noted the specific request to which the document is responsive. CaseCentral expedited the discovery and Hunton's client was able to meet its deadline.

"Companies are not prepared for discovery in part because they do not expect to be sued," says Chris Kruse, CEO of CaseCentral, "but also because it is difficult to get large amounts of data organized." In addition, communication channels between attorneys in law firms and the IT departments of their clients may not have been established, making it difficult for the IT staff to anticipate and support the requirements associated with legal actions.

Given a growth rate of 50% per year for e-discovery, Kruse sees potential for knowledge management tools beyond those for search to be applied. Content management is one, and workflow is another.

"There is a workflow associated with discovery," says Kruse, "so this part of the process could be automated." Although the legal profession was not an early adopter of KM technology, the digital environment of its clients is forcing the issue, and it must now become proficient.

Special care must be taken with discovery data because it is evidence as well as information, according to Mary Mack, director of sales engineering at Fios. Fios specializes in the electronic discovery process, helping clients prepare an initial response to a request and organizing information thereafter.

Policy vs. reality

"One of the things we do is find out what information companies really have, as compared to what their policies say they have," says Mack. "Policy does not necessarily match up to reality."

KM systems can help companies respond to discovery requests by making it easier to locate information, Mack observes, but they also need to be managed carefully during litigation. "The deletion process in records management may be set up to occur within 30 days," she adds, "but once a discovery request is made, the company will need to override this rule to preserve the data."

For the most part, KM systems are not designed or prepared for discovery; they cannot routinely generate redacted documents or numbering systems (such as Bates numbering) acceptable to the court. In addition, situations in which one component of a document is privileged and another is not (such as an e-mail and its attachment) are not readily handled by KM systems.

One of the most valuable services performed by Fios, Mack maintains, is its role in facilitating interaction between a client's IT staff and counsel, including the client's internal and outside counsel.

Danger of deletion

"We help attorneys think about the discovery issue and consider all the possibilities, and focus their strategy," Mack says. "Then we get the IT folks involved to zero in on what the infrastructure can deliver." Another useful element is Fios' hosted review software, Prevail, which lets multiple outside counsels access the data from any computer with an Internet connection, avoiding duplication of effort for the client.

"Having a good records management program is essential," says Whitney Adams, general counsel and senior VP of business development at Cricket Technologies, "but about half of today's companies do not have one that covers electronic documents. Of those that do, few have a litigation hold policy for electronic documents."

The biggest challenge for corporate counsel today, contends Adams, is avoiding spoliation charges, because electronic information can be deleted so easily, or be changed or destroyed inadvertently. Metadata also can be changed unintentionally when a document is moved or copied. If litigation is pending, a company should conduct a comprehensive review to decide what systems of records have relevant documents and then manage its backups, overwrites and deletions appropriately.

One example of KM technology being incorporated into litigation support is the recent announcement by Stellent that several of its component technologies have been embedded into the IPRO Image Server and IPRO View products from IPRO Tech . IPRO's line of products is geared toward litigation support, including image capture and management, and data coding and validation software designed for law firms. Stellent, widely known for its content management products, has technology for filtering, viewing and transforming data.

Native formats

"The filtering component extracts content and metadata from over 250 file types," says Steve Mullen, VP of sales and marketing for Stellent's Content Components Division. "Files can be viewed in their native formats or converted into XML, HTML or other standardized markup languages for browser-based viewing."

"The big challenge in e-discovery is that there are so many file formats," says IPRO President James King. "Stellent's technology lets us view documents and their attachments and to preserve the metadata in its native format." That is important, according to King, because judges are now asking for data in native format rather than in paper or TIFF files. Once the files are screened by reviewers to exclude privileged information, they can be sent through the filter to make sure nothing has been missed.

"Lawyers are dealing with massive amounts of data in litigation," adds King, "millions of pages' worth. They need to be able to find what they need and view it, with the assurance that nothing is being changed."

Visualizing the big picture

Getting a high-level view can help set the direction of a case and facilitate the process of sorting out relevant issues. Attorney Stephen J. Harhai uses MindManager from Mindjet for the complex divorce cases his office handles.

"We list all the pending issues, show breakouts of tasks to be performed and document the legal authority for each issue," says Harhai. "MindManager can also be helpful in opening arguments in a trial because it presents a visual map of the key issues and shows links to evidentiary documents. In settlement conferences, the participants can see clearly what needs to be resolved, which helps us work toward a solution."

Rather than bring in large amounts of data, MindManager allows the user to bring in just the information needed to make a decision. The "output" is more commonly an action or decision rather than a document. MindManager provides a convenient way to accomplish tasks such as note-taking and creating reports. Mindjet reports that with a price of under $300 and a short learning curve, its solution has attracted over half a million users across a diverse range of businesses.

Capitalizing on relationships

Like many professional service organizations, law firms rely on relationships both within and outside their firms in order to succeed. InterAction from Interface Software creates "relationship intelligence" about connections between people, organizations and data that helps companies make the most of their opportunities.

For example, Cynthia Reaves, a partner at the Detroit-based firm of Honigman, Miller, Schwartz and Cohn , identified a potential client who could benefit from her expertise, but did not have an existing relationship that would facilitate the first contact. Using InterAction's "Who Knows Whom" feature, she identified another attorney at Honigman who did have connections with the individual, but lacked the right expertise. Putting the relationship together with the expertise resulted in a retainer for the firm that is expected to bring in a six-figure increase to the firm's revenues.

InterAction uses information from back-office systems and other databases to provide up-to-date profile information on clients and prospects that could be valuable in developing business relationships. It also integrates with Microsoft Outlook, Lotus Notes and GroupWise to leverage contact information.

KM's future in legal

Developing effective KM solutions for the legal profession has been a challenge, according to Kingsley Martin, because of the complex concepts contained in legal documents. Recently named a director to lead the West km Advanced Consulting Practice, a division of Thomson Elite , Martin sees growing use of KM solutions in the future, however.

"Increasingly, we will be using sophisticated search strategies to find documents that are particularly useful, classify them and look at relationships among them," Martin says. Initially, he believes that work in progress, typically found in document management systems, will be the first type of legal information to be fully leveraged in this way. Later, e-discovery and other components of litigation support can utilize the technologies being developed for advanced KM systems, along with other functions ranging from content management to marketing. Semantic indexing as well as probabilistic and statistical techniques will all be used to find and classify relevant information.

West km provides a solution that allows attorneys to integrate their own document collections with the widely used WestLaw online legal research system to maximize the value of the intellectual resources available to law firms.

Judith Lamont is a research analyst with Zentek Corp., e-mail jlamont@sprintmail.com.

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