eDiscovery Update: Managed services and the e-discovery industry
Posted: 12:48 am Tue, October 23, 2012
Years ago, law firms sought to reduce expenses through Facilities Management. By outsourcing the functions of photocopying, scanning and even the mail departments, law firms were able to realize significant cost savings. Salaries and benefits were paid by the FM provider to its employees, while the firm only paid for services that were rendered or materials that were expended.
Many firms still use this model today because it makes financial sense and there are other benefits. FM providers implemented new technologies and workflows with little to no expense to the law firm. However, many firms did not have the volume of business that would warrant bringing in an FM provider.
The same conundrum now exists in the electronic discovery industry. Law firms, small and large, struggle with a deluge of Electronically Stored Information, advancing technologies and finding the right people to handle ESI internally. Firms that want to bring this type of service in-house must invest hundreds of thousands of dollars into people, process, hardware, software, backup schema, data centers, help desks and countless other steps that go into developing a world-class electronic discovery operation.
The firm believes that the investment may help it to reduce electronic discovery costs, and pass those savings on to its client. An additional benefit is that the law firm controls the data, a fact that may give the end client a sense of comfort.
Dropping a million dollars or more to develop these capabilities in house may not faze a partner at an AMLAW 200 firm, but what about the small- to medium-firms? Do they not have clients with electronic discovery needs? Enter the modern day analogy to FM, or what is being touted as Electronic Discovery Managed Services.
David Cowen, principal of a job placement organization, The Cowen Group, predicts that “… Managed services is going to drive into the industry like a bulldozer,” (Bay, 2012). He is predicting that due to the onslaught of big data, existing litigation and future regulatory and civil matters will compel firms to outsource electronic discovery functions, whether people or technology. Again, that sounds great for large firms, but what about firms that only need electronic discovery services a dozen or more times a year (or even less than that)? How can they take advantage of managed services?
Enter the cloud
Electronic discovery vendors are using the cloud to remotely manage electronic discovery services for law firms and organizations. You have heard of the “cloud” but may not know what it is. It is basically the Internet and you have been using it for years. A traditional electronic discovery process comprises the following parts: Hardware, software, people and location. You may wonder why location is on that list, but if you are properly storing your client’s data and accessing it in the cloud, it needs to be in a secure facility, whether that is offsite or onsite. Digital evidence stored in a paralegal’s top drawer is not secure!
Ask three questions
When trying to find an EDMS model that works for your firm, think of the parts in the process mentioned above and ask these three questions: My staff or the vendor’s staff? My stuff (hardware/software) or the vendor’s? My location or the vendor’s?
For example, a small- to medium-size law firm may have already invested in a product like Summation for document review and storage. However, with only six new cases a year requiring Summation, the firm wonders whether it is necessary to pay a paralegal to maintain a sufficient level of knowledge to operate the software. Due to the infrequency of use and the inexperience of the paralegals, they spend an inordinate amount of time doing even the simplest of tasks within the application. This hypothetical firm is currently very busy and could better use the skills of the litigation paralegal in more traditional ways.
This is an example of how a firm can utilize EDMS. The firm can contract with a company to run Summation remotely. The firm would only pay for services rendered. The vendor would pay the salary and benefits of the technicians running the application. This could save a small law firm thousands of dollars a year. Experts are running the show and they can continuously implement new technologies and improved workflows.
The example above is just one possible scenario that illustrates EDMS. That same firm may have outdated hardware and its current secure facility is less than “secure.” A firm might choose to have the e-discovery software and hardware placed at the vendor’s secure data center to be managed by the vendor, yet it remains accessible to the lawyers and paralegals at the firm.
The EDMS model is not just for small or medium size firms. Recently, Jackson Lewis, a national employment firm with over 700 attorneys, outsourced its entire electronic discovery department to a vendor, which would then be expected to provide service and technology to Jackson Lewis clients at a level that surpassed its own internal department.
Jackson Lewis attorney Ralph Losey, explained why the firm chose to outsource its electronic discovery services, saying that outsourcing “… allows my firm to provide our clients with access to the latest Computer Assisted Technology and forensic services, and do so at a good price. But there were many additional reasons for us to go all out with a professional vendor. In fact, there are many good reasons for any law firm to phase out their e-discovery processing and software hosting services. They are not legal services. So why are we selling them?” (Losey, 2012).
Why, indeed? Why are law firms selling electronic discovery services? It sounds like a rhetorical question, but law firms of any size can and should think about outsourcing all or part of their electronic discovery process and infrastructure. What do they have to gain? Decreased expenses, introduction to new technologies, less personnel on payroll, and myriad other benefits. It may not be for every firm, but I predict that like FM, EDMS is here to stay!
Bay, M. (Aug. 28). Cowen Group Forecasts Surge in Managed Services at Law Firms. Retrieved Oct. 22, from Law.com.
Losey, R. (2012). Going “All Out” for Predictive Coding and Vendor Cost Savings. Retrieved Oct. 22 from e-Discovery Team.
Peter Coons is a senior vice president at D4, providing eDiscovery consulting services to clients. He is an EnCase Certified Examiner, an AccessData Certified Examiner, a Certified Computer Examiner (computer forensic certificates) and is a member of the High Technology Crime Investigation Association, the professional organization for people involved in computer forensics.