I discovered two new articles this week on my favorite subject, indeed the name of this blog, e-discovery teams. The first is a cheerleader kind of easy read by Dale Buss of Corporate Counsel magazine. He quotes many in-house counsel who are pleased with their team efforts. The second article is by attorney Eric Friedberg of Stroz Friedberg. It contains legal analysis and insights into the multidisciplinary team approach. Friedberg wrote this article in connection with an event for the Sedona Conference so you know it is a serious work.
David Buss’ Article
Dave Buss’ article on e-discovery teams is entitled Keeping Your Firm’s E-Discovery In-House. It is an informal report based on interviews with in-house attorneys and paralegals already involved with e-discovery teams. It highlights a truth already known by everyone in the e-discovery world, that the legal profession is entering a Revenge of the Nerds phase of litigation. Buss reviews a few of the benefits of managing e-discovery in-house, as opposed to the more traditional solution of outsourcing everything to lawfirms and vendors.
Ross begins by noting that most corporations are just starting to realize the magnitude of the e-discovery problems they face from runaway electronic records mismanagement. This presents in-house counsel with a question of how to go about solving that problem:
Corporate counsel first must decide whether to deal with these growing demands in-house, to outsource the function — or to use some combination of internal and external resources.
Many companies still outsource everything, but a few are now doing at least some of the work themselves. They refer out less and less to outside vendors by building a strong, internal e-discovery team to do the work.
The article quotes Thomas Avery, with the e-discovery team of Aon Corp., as recommending that “legal departments establish as much as possible of the ESI-management function in-house as swiftly as they can.” The senior manager of legal operations for Raytheon Co., Woods Abbott, is said to strongly agree. So too does Patrick Oot, director of electronic discovery and senior litigation counsel for Verizon Communications. Patrick is quoted as saying, “it’s difficult to trust a third party with your mission-critical case information.” That is one reason Verizon is moving more of its e-discovery process in-house, even including many ESI review tasks. Another factor is the company’s projected savings of several million dollars a year.
Another blogger, Jerry Bull, a young e-discovery specialist and consultant in Los Angeles with an IT background, has already written about Buss’ article. See his tech oriented blog E-Discovery in the Trenches. Bull notes the trend to taking it in-house, but also correctly points out a few of the dangers and difficulties in this path:
IT departments aren’t equipped to deal with the high stakes nature of e-discovery work; and the personnel aren’t suited at all to deal with attorneys and attorney requests. I used to be an IT guy and I can tell you that we are bred with a troubleshooting mindset. Everything is up for experimentation and subject to trial and error (we deal primarily with Microsoft tools, after all). This approach simply doesn’t work in litigation.
Still, Bull appears to think it can be done with sufficient support, including full funding and staffing. As he puts it:
Planning for an in-house staff of e-discovery professionals and a handful of reliable, independent consultants will go a long way in easing the transition.
I completely agree. An e-discovery team needs dedicated, trained players, and plenty of time to practice. This is the only way to play competitively in the professional litigation leagues.
Eric Friedberg’s Article
This nine page article by Eric Friedberg, entitled New Electronic Discovery Teams, Roles, and Functions, is written in the opposite style to Ross’ work. It is based on experience and analysis, rather than interviews. It is harder to read, but well worth the effort. Although I disagree with one minor legal statement in the article concerning preservation of “not reasonably accessible” ESI, I agree with everything else, including the meat of the article, his analysis, and insights into e-discovery teams.
The article starts with the observation that many of the mistakes made in e-discovery originate from problems in communication between IT and Legal. I call this the “Who’s On First” phenomena of lawyer/tech miscommunication. Friedberg refers to Judge Scheindlin’s famous quote of the Cool Hand Luke movie in Zubulake: “What we’ve got here is a failure to communicate.” Zubulake v. U.B.S., 229 F.R.D. 422, 424 (S.D.N.Y. 2004).
He sees the best solution to this problem, as do I, in the formation of interdisciplinary corporate e-discovery teams:
Compliance with emerging electronic discovery obligations, and conducting electronic discovery in a consistent and efficient manner, requires new cross-disciplinary teams (hereinafter “New Teams”), with updated organizational roles (hereinafter “New Roles”) and functions (hereinafter “New Functions”). These New Teams often draw representatives from an organization’s in-house legal, IT, compliance, records management, and human resources departments at the corporate and business unit levels, as well as from the outside counsel and the forensic/electronic discovery vendor to whom the company looks for strategic advice.
The article points out a fundamental problem that sometimes dooms new teams to amateur status, insufficient buy-in and funding by upper management. The article points out that differing levels of support by team owners can have a dramatic impact on team effectiveness and morale:
At one end of the spectrum, senior management and the board back and fund a broad mandate to improve records management and electronic discovery processes, and support the requisite change management. In other cases, the New Team members do what they can to coordinate their respective functions but have little budget and less staffing, and struggle in tackling larger initiatives. In such cases, senior management seems to have little understanding of how records management and electronic discovery are increasingly interwoven with corporate governance, ethics, and compliance. While senior management is ultimately responsible for the increased risk inherent in failing robustly to support New Teams, the individual team members on the front lines often feel exposed in attempting to do more with less in an era of rising obligations and multimillion dollar sanctions.
The above quote demonstrates one of the strong points of this article, which I recommend you read in full; it combines strong theoretical insights with good practical observations.
The article goes on to describe the work of the team, but without the sports analogies I employed in my last article, What Game Does an e-Discovery Team Play? Friedberg focuses on the teamwork needed to create effective litigation hold procedures, new ESI archiving platforms, consistent positions in court, data mapping, and the collection and search of ESI. On these last key functions, which my article refers to as finding and picking up the ball, Friedberg points out a valid issue, or problem, which all teams must face, when and at what point to outsource:
The key consideration in establishing these New Functions is to determine where the internal IT function leaves off and when outside vendors should be utilized. Even highly-competent in-house forensic teams can not handle spikes in collections required by large civil or regulatory matters, short deadlines, or a confluence of cases. In addition, it is much more difficult to search data effectively than to collect it. There is less external training available for electronic discovery search technologies and methodologies. As a result, in-house personnel typically rely on off-the-shelf software, which may fail to properly search data or to convert data to searchable form. . . . .
Many in-house IT personnel, for example, use the Outlook client to search Outlook mail. That client, however, does not search attachments or flag items that it can not search. New Teams can address these risks by receiving outside consulting advice on acceptable protocols for searching electronic data. Determining where to draw the line between in-house and external resources is not only a technical issue. Cases that are high-profile or in which the prior role of IT has already been criticized may call for the use of independent resources.
True, true. For a good example of this, see Louis Vuitton Malletier v. Dooney & Bourke, Inc., 2006 U.S. Dist. LEXIS 87096 (S.D.N.Y. Nov. 30, 2006). I previously wrote about this case showing incompetence by corporate IT in Louis Vuitton Sanctioned for Sand-Bagging.
Friedberg’s article concludes with a discussion of outside electronic discovery counsel, whom he calls “one of the most important New Team members.” Not surprisingly, I agree with that. I think all e-discovery teams, even experienced, well established ones, should include an outside attorney on the team. Since experienced outside counsel typically associates with and represents a number of different corporate teams, they can provide unique perspective and advice to each team they represent. Their independence can also serve an important function. It not only allows them to appear in court to represent the team, but also puts them in the best position to steer the team away from any Qualcomm-like disasters. Good outside counsel can make sure the Team plays by the rules, even in the big ticket, high pressure games where employee players may come under a lot of pressure to win, no matter what the cost. An outside attorney on the team can help keep the games clean, and steer team members away from the kind of temptations that cost Qualcomm its patent, and its GC his job. Further, this kind of high-road team participation puts outside counsel in a strong position to protest any questionable calls made by the umpire.
The article also points out the many ways outside counsel can assist a team, including important training functions:
The right counsel can facilitate the entire New Teams process, providing stewardship and key strategic advice to achieve compliance and help avoid sanctions. Indeed, New Teams are using outside counsel to train in-house Team members on emerging case law and the obligations under the New Rules. Not only does the substantive advice help the New Team, but in the event of an electronic discovery mishap, the training itself demonstrates the organization’s good faith, which is a key to avoiding sanctions.
Friedberg also notes a danger in the use of outside counsel that are also trial counsel. Personally, I do not serve as trial counsel anymore. If I appear of record in a case, it is solely to handle electronic discovery related issues. Apparently some attorneys still do both, and I admire their genius, but frankly I do not have enough time or talent for both roles. This limitation removes me from conflicts inherent in the dual role, and allows me to provide independent advice in the area of my core competency. Friedberg correctly advises a company who uses the same attorney as trial counsel and e-discovery lawyer to beware of possible conflicts of interest inherent in such a dual role:
First and foremost, a company’s outside counsel must have deep expertise in electronic discovery law and strategy. When outside electronic discovery counsel is also trial counsel, the in-house team members should closely consider whether outside counsel’s electronic discovery advice will be adversely affected by its role as trial counsel. Such an affect can take the form of over-preserving data so as to avoid any arguments that might, in trial counsel’s view, “distract” from the merits of the case. This might be the right strategy in a particular case, but it can also cost the company substantial sums of money and create stockpiles of data that are difficult to manage thereafter.
The article also points out that the e-discovery lawyer may sometimes be called upon to testify in court, and explain to a judge what happened when the team’s procedures are challenged. Here the credibility of your e-discovery lawyer becomes very important. Moreover, if a waiver of privilege is required to defend the team, it is easier to limit the scope of the waiver if the e-discovery lawyer played only a limited role in the case.
This is a balanced and well thought out article, and not simply a white paper pitch for services. Eric Friedberg also points out a problem with separate e-discovery counsel.
On the other hand, there are clearly inefficiencies in having multiple counsel, and separate electronic discovery counsel can struggle to become fully integrated in the matter so as to render their best advice.
This is very true, which is why it is important to have experienced counsel, capable of working closely with trial counsel to quickly understand the issues in the case.
Another problem which the article does not point out, is the simple fact that using multiple counsel can be very costly, and may not be practical in smaller or even mid-size cases. The services of specialty e-discovery attorneys, especially ones with sufficient knowledge and skills to serve on an internal corporate e-discovery team, can be expensive. There are not that many attorneys with these specialty skills, and all the ones I know carry a high hourly rate. Some cases are simply not worth the expense. Unfortunately, these smaller dollar value cases can still have very complex ESI collection and e-discovery issues. The proportionality limits of Rule 26(b)(2)(C) can help, but even so, costly mistakes leading to sanctions can still be made.
Here a company could help itself with retainer agreements and other alternative billing arrangements. See Eg. the Law.com Article on Mark Chandler, General Counsel for Cisco, who champions alternative fee arrangements. That way a company could always get good “off the clock” advice on complex issues whenever it is needed, regardless of the size or economics of the case. Otherwise, it is all too easy for a stupid, nothing case to explode into a nightmare, and, if your company is the defendant, force a settlement for far more money than a case is worth. We have all seen it happen, even with pro se cases, where the courts tend to lean over backwards to allow a case to go forward. Having a technology attorney on call with some kind of creative retainer agreement as Mark Chandler recommends might be a good way to avoid that trap.
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