As the pace and breadth of litigation continues to expand, intense effort is necessary to manage electronically stored information (ESI) and physical documents; to preserve, collect, cull, review, and produce records. For many legal teams with limited resources in staff and technology, litigation support services have become the go-to solution. Some litigation support services providers offer managed services or professional services (or both) to support corporate in-house counsel. There are differences between the two services and either can be beneficial in supporting firms.
Managed Services — is outsourcing e-discovery activities as a way to reduce costs and improve organizational efficiency, allowing departments to focus on the roles they’re uniquely able to fulfill. With Managed Services, a service provider runs ESI processing for legal teams using technology and equipment appropriate to their needs… either behind their firewall, or behind the service provider firewall.
Managed Services offer numerous benefits, including:
1. Cost Effectiveness
Managed Services streamline the progression of e-discovery and early case assessment by speeding up the process from days to hours, enabling the legal team to focus on the core of the case. Instead of spending money on equipment and software that rapidly becomes outdated, Managed Services build and maintain state-of-the-art technology and equipment, and supply the professionals to run it. This can lower in-house management and labor costs, and help reduce time spent on document review.
2. Workflow Management
Managed Services – from data forensics to data processing and analytics– can be customized on a case-by-case basis. And given how unpredictable, intricate, and protracted e-discovery matters can be, it’s important to quickly identify and resolve any in-house procedural gaps that could expose a company to various risks.
Professional Services — is where aspects (some or all) of a client’s e-discovery process are maintained by a service provider, who takes on the role of project manager and/or consultant in managing and organizing the data. The Professional Services project manager and his/her team manage most of the details associated with preservation, legal holds, interviews, document/data collection, analysis, processing, review, and productions.
Professional Services offer complementary benefits to Managed Services, which include:
1. Project Managers
One of the leading benefits of using Professional Services is that it provides a project manager who works with the client to determine the ideal approach for their e-discovery cases/projects, and then monitors and evaluates the execution. The project manager expertly crafts a plan that can be customized to changing requirements or developments. The project manager manages the team assigned to the project, delegates tasks, and manages deadline compliance while providing timely updates to counsel. Once the project is complete, the project manager provides the client with a post-engagement evaluation.
2. Supplementary Services
The Professional Services project manager can also arrange for expert witnesses, court reporting, and transcribing services during depositions and testimony.
Both managed services and professional services have similar, yet complementary benefits for law firms and in-house counsel. They can blend well and work together to reduce in-house costs and risk exposure while managing workflow and supplementary services. With the rapid pace of technology advancements, constant investment in equipment maintenance and software development is required. Utilizing experts in both managed and professional services to protect the assets of the law firm or corporate legal department, adds to a more stable bottom line.
An increasing number of litigation teams are turning toward managed services as a way to handle the more complex facets of the litigation process. By choosing an experienced litigation support services provider, legal teams are able to focus on the core of the case, rather than spending time managing paperwork. However, as with most business tools, there are both pros and cons to the managed litigation support services model.
The Essence of Provider Services
When using managed services, the details of running your project will be turned over to your provider. This allows them to have both control and accountability over the results of that case. Since this is their full-time occupation, clients can rest assured that the project management will be as efficient as possible, saving countless work hours (and the expense of them) over attempting to keep track of the data themselves.
Litigation support is unique in that so many aspects of building a case are included by support service vendors. Most vendors will offer a range of options, from evidence collection and organization all the way up to computer forensics. Clients are able to pick and choose which services will best support the needs of any particular case, and the entire process is streamlined from start to finish.
Potential Pitfalls
Although a managed services model is extremely efficient and cost-effective, it is not a perfect system. In fact, the very thing that makes litigation support so helpful is the same thing that makes some clients nervous: it’s a lot of responsibility all in one place. Granting control over the project details to the vendor rather than maintaining internal tabs on progress requires a tremendous amount of trust. It’s vital to ensure that your service provider is capable, professional, and completely trustworthy before proceeding. Ending up with a litigation support team which is disorganized or overwhelmed by the workload you’ve offered can result in a huge waste of time and money, and may even cost you the case.
Even if your vendors are fully capable, this business model simply won’t work unless the client is willing to trust the vendor’s judgment completely, so managed litigation support services may not be ideal for anyone who is uncomfortable relinquishing control over their case.
Deciding What’s Right for You
Managed litigation support services, when used correctly, can be a tremendous benefit to any case. However, it does require a lot of trust between both parties, as well as excellent and ongoing communication. If you have the right attitude and are willing to let your vendor handle most of the fine points involved with your case, managed services could be the perfect solution for you.
Debates over which party should bear discovery costs is something that has not changed with the advent of eDiscovery. In fact, the question is becoming even more urgent, as the costs related to the search, retrieval, and production of electronic data are on the rise. For larger cases, truly vast amounts of data must be collected and assembled in order to respond to just one discovery request. Decisions in the past have ranged from requiring the requesting party to bear all production costs to requiring that the producing party carry them. Is there an answer which may fall in between?
The History of Discovery Costs
Back in 1978, the defendant in Oppenheimer Fund, Inc v. Sanders was required to produce a list of class members so the plaintiff could give notice, which required the hiring of a third party to do the vast amounts of manual work involved. The Supreme Court ruled that the preceding order from the lower court ordering the defendant to solely bear that expense was an abuse of discretion, particularly since it was for the benefit of the plaintiff. The initial ruling was reversed, and the plaintiff was ordered to bear discovery costs instead. This precedent has affected many rulings related to cost sharing.
When related specifically to eDiscovery costs, an even more important precedent has been set. In Zubulake v. UBS Warburg LLC, the Southern District of New York Court ruled that the producing party “bear the initial cost of searching for, retrieving and producing discovery” yet allows for costs later to be split between parties, according to seven factors.
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The extent to which the request is specifically tailored to discover relevant information;
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The availability of such information from other sources;
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The total cost of production, compared to the amount in controversy;
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The total cost of production, compared to the resources available to each party;
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The relative ability of each party to control costs and its incentive to do so;
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The importance of the issues at stake in the litigation; and
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The relative benefits to the parties of obtaining the information.
Zubulake also describes five different categories of electronic storage methods. Two of these, backup tapes and erased or damaged, fragmented data, are considered by the court to be not readily available, making them subject to cost-sharing. The seven factors listed above are applied to the necessity of extensive electronic discovery in those two specific cases. In the original Zubulake case, the court ordered the requesting party to reimburse 25 percent of eDiscovery costs.
Moving Forward
The cost-sharing standards set forth in Zubulake are not officially a national standard, yet their influence has spread far beyond the New York state line. Zubulake is the most commonly quoted precedent regarding eDiscovery cost-sharing. For most current cases, inaccessible data is subject to cost-shifting requirements due to the often costly methods used for eDiscovery, while readily available data is more easily produced and does not incur costs much in excess of standard litigation procedure.
No one wants to throw money out the window; unfortunately in the world of eDiscovery, many organizations are spending far more than what’s required. Beyond implementing proactive data management policies, corporations should also be looking to specific eDiscovery rules under the Federal Rules of Civil Procedure (FRCP) and the United States Code (U.S.C.) for cost reduction opportunities.
Below are two specific FRCP rules that can be leveraged by organizations to help them lower eDiscovery costs:
- FRCP 26(b)(2)(C): - Cost shifting through proportionality claims during the discovery period
Under the FRCP, the responding party bears the cost of complying with production requests no matter how outrageous they may be, unless it can be proven that the request imposes an undue burden or expense relative to the proposed benefit of the information being sought. Put another way, production requests are only considered valid if the value of the requested electronically stored information (ESI) is proportionate to the resources required for retrieving the ESI. In a vast number of cases, it boils down to the accessibility of the ESI; including where it’s stored, what form it’s in and the resources required for producing it to the requesting party.
Below are three options for bringing a proportionality claim under the FRCP:
When planning eDiscovery, legal teams should proactively assess the validity of document production requests and whether actions can be taken to reduce potential downstream costs (e.g., processing, review, and production). During eDiscovery, the responding party (usually the defendant) is often faced with production obligations that can be financially crippling. By following these simple tips, costs can be easily reduced:
- Equip the legal and IT teams with the proper technologies and expertise that allow them to quickly search and assess the potential costs of eDiscovery. Having valid, defensible eDiscovery cost metrics, can help counsel effectively argue for narrower eDiscovery parameters during FRCP 26(f) meet and confer negotiations.
- Work as cooperatively as possible with opposing counsel to negotiate a more cost-effective eDiscovery plan. Proactive cooperation will foster goodwill with the presiding judge and should a protective order be requested from the court, better position the organization.
- In the event ESI has been collected with overly broad discovery terms, don’t fret. With the proper documentation and assessment, legal teams can bring proportionality claims after collection to mitigate downstream eDiscovery costs (e.g., privilege review), which can be the most costly. If the responding party can prove an undue burden with a diminished benefit, the Court may retroactively shift all or part of the costs to the producing party.
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28 U.S.C. 1920(4) and FRCP 54(d): Taxation of e-discovery Costs after the case
After a winning case has been closed, it’s possible to recover eDiscovery costs from the losing party. Under FRCP 54(d), costs are “allowed to the prevailing party.” Even though the word “costs” can be an ambiguous word, 28 USC 1920(4) clarifies that costs include “fees for exemplification and the costs of making copies of any materials.” Courts across the country have struggled with the meaning of “copies.” Does it include native file to TIFF file conversion? Does it include database searching by a third-party vendor?
Litigants and Courts don’t seem to have a definitive answer on what eDiscovery activities are included under “copies.” Some have taken the word copies more literally, disallowing eDiscovery costs outside the spectrum of copying, while others have done the opposite. Either way, attorneys on both sides can take proactive measures to receive a big return from the Court or minimize costs owed to the prevailing party, by adjusting their eDiscovery strategy to account for the following:
- Accurately track, record and log expenses, so the Court can accurately assess the claims for additional eDiscovery costs.
- Cooperate with opposing counsel to formulate eDiscovery preservation and collection parameters that target only potentially relevant ESI. This will help minimize additional costs and the risk of paying additional costs to the prevailing party.
Michael Hamilton is a Sr. E-Discovery Analyst at Exterro, Inc., focusing on educating Exterro customers, prospects and industry experts on the issues solved with the eDiscovery management. His eDiscovery knowledge, legal acumen and practical experience give him a valuable perspective on bridging the gap between IT and legal teams. He is a regular blogger on the E-Discovery Beat: http://www.exterro.com/e-discovery-beat/.
The rising costs of eDiscovery are of concern to virtually everyone in the legal profession. Yet, electronic discovery is an essential part of today’s litigation processes. How can the possibility of unexpected costs be mitigated in order to contain litigation fees? Here are five tips which can help reduce the costs of electronic discovery.
1. Choose the right tool for the right job.
There are many different types of e-discovery tools and software available, but not each application is appropriate for each job. Small, straightforward requests can be handled simply, while those involving more complex data will require a more robust search functionality and extensive capabilities. Through choosing the right approach, firms can see significant savings.
2. Reduce data volume.
When faced with a major case, it can be tempting to dive right in and start looking for evidence. However, the more raw data is examined, the higher electronic discovery costs will rise. Today’s sophisticated software tools can more effectively narrow data sets prior to submitting anything for a deeper review. Effective early case assessment through this manner allows for a smaller total volume of data to be examined, which again lowers eDiscovery costs.
3. Streamline procedures.
Streamlining procedures will greatly reduce billable hours spent reviewing case data, allowing counsel to instead focus on more substantive core issues relevant to the case. Advanced technology is able to combine different tools to provide advanced review and data analysis. These will increase the speed and accuracy of document management, and also provide greater consistency. Improving this process at the initial review will set the stage for lower costs moving forward.
4. Establish repeatable processes.
Every hour invested in establishing a process is wasted unless you’re also focusing on ensuring those processes are repeatable and defensible. Implementing an eDiscovery strategy which incorporates the benefits of advanced technology and sophisticated analytics builds repeatable processes along with filtering and review functionality. Once this system is established, future data can be moved through more quickly and selectively, preventing time and money wasted by responding to any disputes claiming an incomplete approach to electronic data collection.
5. You get what you pay for.
Regardless of how sophisticated the available technology may be, the end results of your eDiscovery will only be as good as your litigation support team. Looking for an initial bargain can cost big later on, if processes are not repeatable and data is not defensible. Re-processing the same data because of inefficient initial results is a tremendous waste of time and resources. Commit to quality litigation support up front to prevent unexpected costs down the road.
In the end, although the possibility for inflated bottom lines is making many legal teams nervous, there are several strategies available to reduce the potential for higher costs. The technology for cost-effective eDiscovery exists; the next step is hiring a litigation support team who is able to efficiently implement that technology.
