This is a live report from Legal Tech NYC on the session E-Discovery – Considerations for In-Sourcing and Outsourcing. 

The panelists:
Marilyn Caldwell – Director of Practice Support, Lowenstein Sandler
Michelangelo Troisi – Senior Counsel and Director of Risk Managment, Samsung Electronics America
Scott Cohen – Proskauer
Craig Ball – Consultant and court-appointed Special Master for EDD

Introduction. Most everyone is already outsourcing at least some EDD work, so this panel is focused on considerations for bringing work back inhouse. A recent poll of inhouse counsel found that 3/4 said law firms are not doing enough to respond to cost pressures, especially on EDD. The volume of ESI keeps growing, so the problem is not going away. And ESI is becoming more complex with the advent of new media such as Facebook and Twitter.

The law is now clear – companies have a duty to preserve records. Doing this poorly, without expert advice, can lead to problems. So for organizations taking EDD inhouse, how do you make sure you meet your obligations?

“The reality of e-discovery is it starts off as the responsibility of those who don’t understand the technology and ends up the responsibility of those who don’t understand the law” – Craig Ball

Identification and Preservation. Craig discusses the EDRM reference model. Prime candidates for insourcing are RM, identification, preservation, collection, and processing. Questions latest Judge Scheindlin Pension Committee decision, suggesting that custodians must be involved in preserving records. Custodians need to be involved but that is not enough. Mike says that it is not practical, at outset of litigation, to immediately go out in the corporation and interview all the custodians. Samsung sends out notices to employees. He says that this ends up in over-preserving. Talking to custodian to determine relevance just takes a lot of time. Custodians preserving their own docs is really the only practical solution. But acknowledges that not all employees read all notices.

Craig suggests some institutional / enterprise steps to help ensure preservation. For example, before sending out preservation notice, create and save back-ups of key systems such as an Exchange. Samsung does this with Exchange and Enterprise Value (again, he says, this results in over-preservation).

Collection. As lawyers and legal staff acquire skill, they will be able competently collect data. But today, lawyers deal with intermediaries. Craig argues that lawyers need to be closer to the data earlier in the case than is currently the case. Marilyn points out that lawyers are nervous about collection because they are aware that they may change the data. So some debate over whether collection is merely ministerial. Craig: why didn’t these lawyers know the answer to the data change issue. Marilyn: IT staff knew meta data needs to be preserved but business people think only about document content. This leads to a discussion of what credentials or training is required to collect data appropriately. Craig points out that there are no readily available certifications / training for lawyers. He says he could teach most lawyers in 2 to 3 days. But he is not aware of any courses. And he’s not sure how many lawyers would sit for such a course. Craig: in all the time lawyers spend rationalizing why they can’t or shouldn’t learn this, they could actually learn it. [Editor note: reminds me of mainframe computer days, when I sat though meetings where glass box IT staff spent hours explaining why data I needed was impossible to get instead of spending that time writing code to get it.]

Scott: many tools purport to help with collections. But you first have to understand requirements. Once you understand the legal requirements, then you can match up with actual capabilities of tools. Emphasize actual, meaning having tested the tool and not relying only on vendor representation.

Craig: bring as much as you can inhouse so that corporation can competently and defensibly reduce data volumes. This will yield smaller data set that gets turned over to vendor for processing and that needs review. A show of hands: many companies have hired vendors to forensically collect data. Craig thinks that with one competent and properly trained inhouse person, this is not necessary. Marilyn counters that you need someone who can testify appropriately and this may not be the typical inhouse IT person. Craig responds that if the collection is competent, the likelihood of having to testify is very low.

For companies outsourcing some of their IT infrastructure, they need to consider the real total cost of ownership, which includes the cost of collection and preservation.

Audience question: Should law firms offert IT training to clients? Scott would be more comfortable pointing clients to appropriate third parties. Marilyn would also turn to 3rd party vendors.

Steps for Insourcing – Corporate Perspective. (presented by Mike)

Questions :
1. Do steps comply with law?
2. Do you have the right processes?
3. Do you have an action plan for when litigation arises?
4. Has the action plan been tested and used?
5. Is the process defensible? Has counsel signed off on the plan?
6. Is the process repeatable? Does it work for all or at least most cases?
7. Who owns and manages the process and plan?

Forming an internal EDD team:
1. Is it cross-functional?
2. Who leads the team?
3. Does the the team have the necessary resources?
4. Is IT fully involved and committed?
5. Is the team truly cross-functional?
6. Which department manages ESI? (At Samsung, law department manages ESI. Company pays IT for support it needs.)

1. How can tech help the process and people work better?
2. Is the tech modular or upgradeable?
3. Will the vendor continue to suppor the tech?
4. Can the company survive without the solution?
5. Can the company live with the tech becoming obsolete?

Steps for Insourcing – Law Frim Perspective. (presented by Marilyn)

Evaluate and Plan
– Need personnel with right expertise, technical and consulting
. Keep in mind that training is a continuous process
– Need the right hardware and software
. Is your system scalable
. Does your tool have the right feature set
. When there are problems, what do you do?
– Determine admin requirements
. Keep track of what you have done and who did it
. Record action in case challenged in court
– Assess risk
. What happens when something goes wrong?
. Will the firm accept this risk?
. There are a lot of moving parts – is the firm ready for all these costs?

SWOT analysis
– Flexibility, efficiency, deeper understanding, transparency, control
– Cohesive work with case teams
– Integrate tech efficiencies into work flows
– Expand knowledge
– Limited exposure to varying data types
– Staffing constraints
– Difficult to decline work once you’ve started
– Scaling up
– Data volumes growing
– Software bugs

Considerations for In Sourcing
Do you have the people?
Do they hae the time, expertise, and interest?
Do you have the budget?
Can you monetize?
Do you have the right tools and infrastructure?
Can you stay current with tools, with the right training, and keeping methods current
Are you lawyers willing to be looped in?
When in doubt, farm it out