e-Discovery Team ®

Facebook’s success suggests that for organizations to prosper in a rapidly changing technological society, in other words, in today’s world, they must: focus on impact, be fast, be bold, be open, and build social value. To attain these goals they must adopt iterative processes for continuous improvements. They must promote a hands-on meritocratic culture where an idea is adopted if it works, no matter who suggested it. This is the core meaning of Facebook’s motto – Code wins arguments. It is a very practical and egalitarian approach to management.

Last week in my blog “The Hacker Way” – What e-Discovery Can Learn From Facebook’s Culture and Management I brought Mark Zuckerberg’s Letter to Investors to your attention. The letter disclosed Facebook’s core values, which Zuckerberg calls the Hacker Way. My article also began an exploration of how this new philosophy of work can be applied in our world of e-discovery. This week I’ll take the application theme a little further. I am convinced that all organizations in the e-discovery world – law firms, vendors, corporations, governments and others – can benefit from applying Facebook’s three-fold code wins methods, and five-fold Hacker Way goals.

It doesn’t take a Zuckerberg to realize that these methods and goals could be applied to any 21st Century field of endeavor. Are you involved in some way in management of your law firm or company? Do you want to stay competitive and remain relevant? If you stand still and keep the old management style and values, you will quickly fall far behind. The business and professional motivations to study Facebook’s success are obvious. I hope you will think about it, leave comments below, and help me figure out how we can all benefit from Zuckerberg’s insights.

Personal Apps?

There may even be applications of the Hacker Way to your personal life and code of conduct. Do you want your life to have an impact on the world? To have meaning? Do you want your life to embody ethical values that you are proud of? Do you share, or are you closed off, an iconoclastic island? Are you open to change, no matter how fast it may come? Can you take action, make decisions? Can you quickly implement your decisions? Are you efficient and productive? Do you dare to be bold, or just follow timid conventions of old?

I certainly will not try to answer these questions here, nor share the kind of personal fractal solutions that I try to fashion on a day-to-day basis; the iterations of action, observations, analysis, adjusted actions, repeat.  I just raise the questions to stimulate your personal thinking. Everyone has their own solution to the enigma that is life. There is no one right answer. We each have our own path on the Hacker Way. This essay will instead focus on the practical applications of Hacker Way to e-discovery management.

Impactful

In e-discovery, like anything else, you have to focus and prioritize. You cannot do everything at once, at least not if you are going for impact, or for quality for that matter. Scatter-brained is a recipe for failure. So is not knowing what to focus on first. You have to pick and choose your battles, your time, energy, and money. All tasks are not created equal. Some are more important than others. Generally you should focus on them first, and then move on to secondary problems. A wise project manager knows what to focus on and when.

The big picture, from the highest elevation, shows that the core problems in e-discovery today are the high costs of e-discovery and the low skills of practitioners. You could say high costs and high risks, but I really think that the risk management problem is secondary to the skills problem. Attorneys trained in e-discovery have the skills to avoid the colossal mistakes that we read about in the court opinions every day. See eg. Pippins v. KPMG LLP, 2012 WL 370321 (S.D.N.Y. Feb. 3, 2012).

To maximize impact e-discovery teams everywhere should focus on these two, costs and training. They should look for bold new ways to control costs and train attorneys. As discussed briefly in “The Hacker Way” – What e-Discovery Can Learn From Facebook’s Culture and Management, for me cost control means focusing on search, since review is the most expensive part of any production project. It also means building new aggressive culling methods, such as Bottom Line Driven Proportional Review.

This is also an area for vendors to be bold. Vendors must lead the way by making advanced predictive coding type software far less expensive than it is today. Making a thousand dollars each on ten-thousand users makes you ten times as much money as making ten-thousand dollars on a hundred users. Come on software companies, you know who you are, bring down your prices! Don’t make me name names.

The high price of advanced search software is a core problem. When it is fixed it will have a big impact on e-discovery. Who will be the new Facebook of e-discovery search? Fame and fortune await the bold company who can now move fast. The same old timid low-volume, high-profit approach must be abandoned. Try a new value approach in your next iteration. You need to do so fast before the first-to-market competitor eats your lunch.

In addition to solving the needle-in-the-haystack problem, another good way to cut costs and maximize the impact of an e-discovery team is to better prepare for e-discovery. You can have a high impact on both costs and skills by engaging in what I call an e-discovery readiness program. It typically involves what the old EDRM referred to as Information Management. But e-discovery readiness actually involves far more than that, including massive amounts of education and training, not only for lawyers, outside and in-house, but also for corporate IT and management stake-holders. It involves forming a functioning corporate e-discovery team, updating electronic retention policies, especially email. It also requires design of proportional litigation hold procedures, and efficient ESI storage architecture and software.

This kind of pre-litigation readiness program should be adopted by all corporations, governments, and other large organizations who must routinely litigate and respond to subpoenas as a cost of doing business. It can result in tremendous savings, just like a more efficient culling and search method.

Fast

The 2006 Amendments to the Federal Rules of Civil Procedure put a premium on speed. You have to work fast to get your act together before the initial 26(f) conference. Under the new rules you are required to discuss and disclose your e-discovery plan, including your preferred format of production, preservation efforts, and plan for search and review. Evolving case law on litigation holds also requires you to act fast, to send out written notices quickly, to collect key ESI quickly.

Obviously most search, review and production projects also require you to act fast to meet tight time deadlines. How many files an hour can your CAR go, your Computer Assisted Review? You have got to be fast to succeed in e-discovery. Yet, at the same time, you must act reasonably and minimize mistakes. This means that you must have quality control methods built into your CARs. You have to know when to double-check your efforts. There are straightaways in e-discovery where you can go fast, such as irrelevancy culling, and there are curves, such as privilege review. You have to know when and where to slow down so you don’t go flying off the curves.

Some analyses and conversations need to happen quickly, right at the beginning of a case. Determination of key players and key player interviews and preservation instructions come to mind. So too do conversations with IT to suspend automatic deletions and old hard-drive recirculation. So many things in e-discovery are front-loaded. You have to act fast at the beginning of a case. This is a big change in culture where for decades Rule 26(f) meet and greets have been mere drive-bys, where the initial discovery analysis could be postponed. Now it cannot. Now you must act fast and early.

Fast is also important in law firm management. Firms need to quickly get their e-discovery departments up to speed. They need to move fast to ramp up their attorneys’ skills. Gradualism is a recipe of failure. You cannot just wait until the next generation figures it out. Yes, it may be easier for the twenty-somethings to learn this new area of law, but do you really want them to do that by trial and error on your clients’ cases? Do your clients want that? Anyway, they won’t learn the right way to do things. They will stagger along without the benefit of senior advisers.

For a law firm to move fast, they really need to do what my law firm did, and others have done. They need to hire an outside attorney who is already skilled. Then the senior experts can train and help others get up to speed, especially the young rock-star e-disco associates who otherwise practice e-discovery without adult supervision.

Vendors need to move fast too. Indeed, the pressure on vendors is even more intense because the competition is hotter. Speed and early adoption are all important in the world of e-discovery vendors. They cannot slow-poke around with yesterday’s technologies, such as keyword-only based search, or expensive on-site licenses. They need racing CARs. They need to move, and move quickly, to affordable SaaS based delivery systems, and to  bring those prices down, if they are going to win the race. They need advanced search with artificial intelligence (“AI”) type agents that the user trains, i.w. predictive coding type software. SIRI is here to stay. Take a look at Nokia’s and Research in Motion’s stock values as compared to Apple. Which team to do you want to be on?

By the way, some have questioned my use of the term AI in connection with the new search algorithms. Please note the generally accepted definition of AI is “the study and design of intelligent agents”^[1] where an intelligent agent is a system that perceives its environment and takes actions that maximize its chances of success. This is what I mean by AI. SIRI is example of this. Admittedly, we are still in the early design stages of AI agents for e-discovery (and phones). I know that our programs today will look pretty stupid in a few years. (So will everything else as the pace of change and improvements continue to accelerate.) But the first vendors out there with smart AI agents will gain a huge competitive advantage. Those stuck in hyped-up keyword searches, which is just 1960s technology with better interface and faster execution, will go the way of the buggy whip manufactures. You know who you are. Don’t say I didn’t warn you. You had better go out there and hire a team of information scientists now if you want to keep up.

Bold

Timid and lawyer are two words that were never meant to go together. Yet for most AmLaw 100 law firms today, they do, at least when it comes to e-discovery. For a law firm to be bold, they need to do what my law firm did, and others have done. They need to hire outside attorneys who are already skilled, and they need to make a full commitment to these attorneys and what they bring to the table. That means hiring them as a Partner, like I was, or my friend Paul Weiner was, not as an Of Counsel or Special Counsel, or even worse, as non-partner track Staff Attorney. But there is more to this than just titles. The newly hired e-discovery experts should be provided with authority to make a real e-discovery team, not just design a marketing ploy. National e-Discovery Counsel, like Paul and I, need to have the clout of Partner status, and top management back-up, to be taken seriously and implement necessary changes.

The attorneys who specialize in e-discovery should dedicate their whole practice to e-discovery, and e-discovery alone. Be bold and go all the way. Unless you are full time, like Paul and me, and Paul’s partners Cecil Lynn and Michael McGuire, to name just a few, you really will not have the time and experience to master this complex subject. Would you want your heart surgeon to be a part-timer who also does podiatry? Would you want your anti-trust lawyer to also be a family law practitioner? Law, like medicine, is complex and e-discovery is one of the most complex subjects in the law today. Law firms had better move quickly to hire or facilitate full time practitioners. It does not work to just have a few lawyers in a firm that dabble part time in this new area of the law. Mistakes will inevitably follow as the dangerous little-bit-of-knowledge syndrome sets in. As Alexander Pope said in 1709:

A little learning is a dangerous thing;
drink deep, or taste not the Pierian spring:
there shallow draughts intoxicate the brain,
and drinking largely sobers us again.

Halfway, band-aid measures won’t cut it in e-discovery. You have got to go either all-in or all-out. The days of a law firm setting up a marketing type e-discovery department by sending out a few of its attorneys to CLEs, and then posturing them as experts, are long gone. It takes bold all-out efforts. You need to hire full-timers and give them authority. Mere marketing with part-timers can be set up fast, but that is not bold. That is same-old, same-old. That is timid.

Longtime e-discovery commentator and consultant George Socha is also leery of poser type law firm practice groups. In the recent LTN article, True Grit: Four Models to Rein in E-Discovery Costs, that featured Paul Weiner on its cover (who is no poser), George is quoted as saying that most law firms:

[C]ontinue to be marketing groups more than anything else. I continue to see that most lawyers at firms with putative internal EDD practice groups either do not know those groups exist or do not use them. Firms ought to do a better job of taking control of EDD, at least for those clients who lack the wherewithal to take on EDD themselves. Firms seem unwilling, however, to make the initial and on-going investments needed for that to happen.

How many of the AmLaw 100 law firm’s have bona fide e-discovery practice groups with at least one partner who does electronic discovery full time? That is the true litmus test for bold management, a test which most firm’s fail. It bears repeating: timid and lawyer are two words that were never meant to go together. Be bold law firm managers. Be a mighty mouse, not timid rodent. Hire a full-time expert e-discovery lawyer as a partner in your firm today and give him or her the juice they need to get things done.

As to vendors, be bold and be willing to take a chance, to go with the changes sweeping the industry. Stop trying to milk your outdated products for all they are worth from uneducated consumers who don’t know any better. Get rid of your old products instead of adding a few minor enhancements each year. Shorten your new product cycles. Invest in research. Buy or be bought already. Look to a company like Clearwell for a Hacker Way to do things right.

Above all dear vendors, be bold and lower your prices. I know that vendors are not like lawyers and law firms who have a fiduciary duty to their clients. Vendors instead have a duty to their shareholders to maximize profits. I get that. But you can still do that and lower prices, because this will increase the number of sales. It is a virtuous cycle. The more affordable e-discovery becomes, the more lawyers will do e-discovery. Lower prices will increase sales, and thereby increase profits too. Be bold. Be the first to step up to the plate and make dramatic price reductions, not just a little bit here and there.

Open

Vendors need to be more open about their profits and their black boxes. Got some special mojo? Then patent it like the rest of the technology industry does, and protect yourself that way, instead of by using trade-secrets. Software vendors, open up your black box! Show us the secret sauce and you will go a long way to building trust.

Openness builds trust. That is why transparency is now a key component to the new paradigm of discovery cooperation. The way to walk your talk in cooperation is by disclosure. How did you go about preservation? How did you go about finding the documents requested? Use the tools of sampling. Make aggressive disclosures so that you can support your proportionality arguments. As Judge McMahon said recently in Pippins v. KPMG LLP, 2012 WL 370321 (S.D.N.Y. Feb. 3, 2012):

But I cannot conclude that the cost of preserving the hard drives outweighs its benefit, as KPMG urges, any more than Judge Cott could, because the record before me is devoid of information necessary to conduct such an analysis. See Order at *8. KPMG refused to allow Judge Cott, or Plaintiffs examine even a single hard drive to ascertain the “benefit” of preservation, so there is nothing in the record before me to inform any decision. Even assuming that KPMG’s preservation costs are both accurate and wholly attributable to this litigation which I cannot verify – I cannot possibly balance the costs and benefits of preservations when I’m missing one side of the scale (the benefits). Neither can I conclude that KPMG has kept hard copy data of everything on the drives that might prove relevant to this action. KPMG cannot simultaneously demand that the Court analyze how long every Audit Associate worked and what every Audit Associate did and also ask the Court to sanction the destruction of what is probably the single best source of that information.

In short, KPMG is hoist on its own petard.

The petard here is KPMG’s refusal, no doubt upon advice of counsel, to make disclosure, to be open.

As Judge McMahon went on to explain:

I certainly do not intend to reverse Judge Cott’s Order on the purported ground that he erred by concluding that KPMG failed to demonstrate that preserving the hard drives was unreasonable. Frankly, the only things that were unreasonable were: (1) KPMG’s refusal to turn over so much as a single hard drive so its contents could be examined; and (2) its refusal to do what was necessary in order to engage in good faith negotiations over the scope of preservation with Plaintiffs’ counsel, in purported reliance on an order of this Court that it interpreted unreasonably. It smacks of chutzpah (no definition required) to argue that the Magistrate failed to balance the costs and benefits of preservation when KPMG refused to cooperate with that analysis by providing the very item that would, if examined, demonstrate whether there was any benefit at all to preservation.

KPMG’s attorneys here were bold in their litigation conduct, but not open. As a result their actions were seen as chutzpah. Judge McMahon earlier detailed some of the failures to be open that caused him to affirm the Magistrate’s earlier controversial ruling:

KPMG, hiding behind the stay of discovery, insisted it could not produce even one hard drive for inspection by Plaintiffs. It also refused to respond to any question regarding the content of the hard drives, furnish Plaintiffs’ access to any hard drives, inform Plaintiffs whether the data on the hard drives might be derived from other sources, or discuss the costs of possible alternatives to preserving the data on the hard drives. Instead, KPMG made a series of “take it or leave it” offers, and sought to have Plaintiffs agree that KPMG only had to preserve a smaller sample of the hard drives without giving Plaintiffs the opportunity to review the contents of any hard drive(s) first. (Citations to the record omitted.)

Old school, hide-the-ball, “take it or leave it” approaches no longer work in e-discovery. When are the old-timey, non-specialists trial lawyers going to get it? When are they going to move over and just let the full-time experts do e-discovery without interference? There will still be plenty for the trial lawyers to do, plenty to argue about. Above all, when are clients finally going to catch on and insist upon an open, expert approach?

Values

Building social value is no longer an idealistic pie-in-the-sky dream. It is an effective business strategy. It is an especially effective strategy for professions such as medicine and law, occupations that by nature have a higher calling than just making money. Lawyers serve their clients and the law. It is a dual task and if there is conflict between the two, the law must always prevail. That is why we have extensive an code of professional conduct.

The ethical codes of the legal profession embody our values. They provide a solid guide to the conduct of our services, our noble quest for truth, justice and liberty. The ethical codes require all lawyers to be competent, and, if faced with a legal task wherein they are not competent, such as e-discovery, to bring in other attorneys who are. Model Rule 1.1 (“A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation.”)

Our ethics also requires diligence, a task that is impossible unless you actually know what to do and when to do it. Model Rule 1.3 (“A lawyer shall act with reasonable diligence and promptness in representing a client.”) The Hacker Way value of fast action is thus built into our code. It is emphasized again by Model Rule 3.2 that requires lawyers to expedite litigation. (“A lawyer shall make reasonable efforts to expedite litigation consistent with the interests of the client.”)

Our values also require candor towards the tribunal, the judges. Candor means openness and complete honesty. It is a core value that may never be broken under any circumstances. Should it violate your duty of loyalty to your client, you are required to withdraw from representation, rather than ever be dishonest and closed to the presiding judge. Model Rule 3.3 (“(a) A lawyer shall not knowingly: (1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer; . . . (3) offer evidence that the lawyer knows to be false. . . .”)

Our values as lawyers also requires fairness to the opposing party in litigation and fairness to the opposing counsel. This means, among other things, that games of hide-the-ball are forbidden. This does not mean that you should provide evidence harmful to your client that was not requested, or not relevant, or that you are not legally required to produce such as privileged information. But if it was requested, is relevant, and you are legally required to produce it, it is unethical not to do so. If the client refuses to do so, you should withdraw. Model Rule 4-3.4 (“A lawyer shall not: (a) unlawfully obstruct another party’s access to evidence or otherwise unlawfully alter, destroy, or conceal a document or other material that the lawyer knows or reasonably should know is relevant to a pending or a reasonably foreseeable proceeding; nor counsel or assist another person to do any such act.”)

In the United States, like the rest of the civilized world, citizens have a fundamental right to justice, to due process. If it costs too much to discover the truth, they are deprived of that right. If only the rich can afford to find the truth needed to do justice, then the values we have worked so hard to develop in this country and the world over the last several centuries will be destroyed. We cannot let that happen.

Lawyers and judges must take the proportionality principle very seriously. We must innovate and constantly improve our methods to control the costs of e-discovery, to make it affordable to all. Vendors have a key role to play in this process of cost containment. They can and must work side-by-side with law firms to keep our litigation just, speedy and inexpensive. That is how we can all work together to build social value in e-discovery.

Conclusion

We can all learn from the Hacker Way that has been implemented so successfully by Facebook. It’s five goals and three methods provide good advice to all, even to senior lawyers wrapped up in e-discovery who may think they already know it all. There is always room for improvement, for growth. Those of us who are hands-on everyday in e-discovery know this to be true.

The legal profession does not usually take advice from 27 year-olds, but that is part of a meritocracy. If a young associate is right on a point of law, they are right. Their age does not matter. The law has always striven to be a meritocracy, so this is really nothing new. We should take advice from wherever it comes, if it is good advice, if it has been proven to be sound. The success of Facebook is proof enough for me. Code wins arguments, so too do stock prices. Let’s watch the Facebook IPO and see what happens, and beyond, as it continues to change every aspect of the lives of millions of people around the world. The Hacker Way is worthy of further study. I look forward to your comments below.