Trending: Bringing E-Discovery In-House

Over the past few years, the legal industry has seen a growing and sustained trend toward enterprises reducing the amount of e-discovery work they are outsourcing to third-party service providers and outside counsel. This trend has been repeatedly highlighted in independent research, including Altman Weil Law Firms in Transition 2016, The 9th Annual Law Department Operations Survey and Exterro’s 2016 In-House Legal Benchmarking Report.

The impetus behind this trend is fairly obvious—litigation costs have ballooned due to the ever-increasing amount of data that is being created. In addition, advancements in software have resulted in powerful solutions that not only can accurately perform all the necessary functions, but also reduce risk through workflow automation via easy and intuitive user interfaces. This combination has led business executives, general counsel and CIOs to re-assess their internal legal operations and implement cost and risk-reducing measures as they relate to the e-discovery process.

Research data suggests this trend will continue to gain momentum as we enter 2017. For instance, 77% of those surveyed in Exterro’s 2016 In-House Legal Benchmarking Report stated that half or more of their organization’s legal services (i.e., legal holds, document review, data collection/processing, depositions, matter intake, etc.) were already conducted internally. On top of this, 76% expect to perform more legal services in-house in the next 2 years. The biggest reason why in-house legal is heading in this direction, according to the survey results, is the expense of law firm/service provider services.

Of course, implementing change within an organization always carries an element of execution risk, which can be minimized through established best practices.

Best Practices for Insourcing More of the E-Discovery Process

The old business maxim “culture eats strategy” is especially applicable when it comes to e-discovery. Any organization with a large litigation portfolio is going to have established processes for how things are done and it’s important to remember that e-discovery is only one part of a much

larger legal ecosystem. The best way to gain alignment from senior leadership to break from the status quo is to develop a plan, make a compelling business case for why change surrounding e-discovery is necessary and demonstrate continued value to the organization.

Some best practices to consider for achieving this include:

Auditing internal processes—A great way to assess the capacity and degree to which e-discovery activities can be brought in-house is by conducting a full audit of current processes, costs and constraints. As part of this exercise, it’s often advisable to bring in an outside resource, whether a consultant or service provider, with specialized e-discovery expertise to help answer such questions as:

1. What is the current state of your e-discovery process?

2. Where do the most significant gaps exist?

3. Are there special legal or regulatory considerations owing to the structure of your company or industry?

4. What parts of the process are costing the organization the most money and how do costs compare across vendors/firms?

Clearly defining responsibilities, competencies and metrics—Once the process assessment is completed,the next step is aligning it with internal resources. Bringing more of the e-discovery process in-house often necessitates a reshuffling of the legal and litigation support team toensure there are dedicated resources in place to handlee-discovery tasks. This may also impact the IT, records,compliance and even HR departments. It is importantto consider what training might be required to get theseprofessionals up to speed on new responsibilities andwhether outside resources, such as an e-discoveryconsultant, may be needed to assist in each phase ofthe plan. Finally, the business executive has to establish howto measure productivity and efficiency to demonstratewhy any internal investment was ultimately beneficial tothe legal department and overall business and that thebusiness plan was successfully implemented.

Investing in new e-discovery technology—As companies look to bring more downstream, data-centric e-discovery processes in-house, such as collection, processing, analysis and first pass review, the need for specialized technologies becomes more and more essential. Traditional “right side” e-discovery tools were designed for their primary user base, law firms and service providers, and may have limited utility in a corporate environment.

Fortunately, the e-discovery software market is evolving quickly. These new technologies differ from traditional e-discovery data management tools by delivering certain key capabilities, including:

1. Legal project management: Software specifically designed to help orchestrate the tasks and activities associated with legal projects, such as e-discovery, matter intake, etc.

2. Pre-collection analytics: Allows legal teams to gain the early understanding and insight of potential costs, keywords, and custodians through the testing of search criteria before documents are actually collected.

3. Targeted collections: Allows legal teams to target only relevant documents for collection based on specific, user-defined criteria creating much smaller review sets than traditional collection methods.

4. In-place processing: Allows legal teams to process cull and de-duplicate ESI at the point of collection, eliminating the need for additional post-collection processing and related fees.

5. Technology assisted review (predictive coding): Allows legal teams to train software to distinguish between relevant and non-relevant documents, eliminating a company’s dependence on manual, human review.

Whether it is appropriate to bring all or more of the e-discovery process in-house will be determined by the unique combination of your organizational structure, risk tolerance, industry and litigation profile. But the value gained by taking control of more of the process is well-documented, and thus re-evaluating your current operations to identify ways to cut costs and reduce risk via in-sourcing is strongly recommended.