Overcoming eDiscovery Trepidation - Part II: A Better Outcome

In this two-part series, I interview Gordon J. Calhoun, Esq. of Lewis Brisbois Bisgaard & Smith LLP about his thoughts on the state of eDiscovery within law firms today, including lessons learned and best practices to help attorneys overcome their trepidation of electronic discovery and build a better litigation practice. This second blog focuses on how attorneys within law firms can save their clients money, achieve better outcomes, and gain more repeat business once they overcome common misconceptions around eDiscovery.

You mentioned earlier that you think attorneys who try to shoehorn volumes of electronic data into older workflows developed for paper discovery will likely cause attorneys to lose clients. Can you explain how?

Sure. My point was that non-technological workflows often pop into the minds of attorneys because they are familiar, comfortable approaches to responding to document requests.  Because they are familiar and can be initiated immediately, there is a great temptation to jump in and avoid planning and employing the expertise essential for an optimal workflow.  Unfortunately, jumping in without much planning produces a result that is often unnecessarily costly to clients, particularly if the attorneys employ in-house resources (which are usually several times more costly than outsourced staff).  In-house resources often regard document review and analysis as an undesirable assignment and have competing demands for their time from other projects and cases. This can result in unexpected delays in project completion and poor work product (in part because quality degrades when people are required to perform tasks they dislike). The end result is untimely, lower quality, and more costly than anticipated, which will ultimately cost the attorney their client.

Clients will always gravitate towards the professional who can deliver a better, more cost-effective, and more efficient solution while avoiding motion expenses.  That means that attorneys who are informed enough to use technology to save clients money on multiple cases are going to earn the trust and confidence of more and more clients.  And that is the answer to the question as to what’s in it for the professional if he or she takes the time to learn about or partners with someone who already knows eDiscovery.

Well, coming from a legal technology company, I agree with that sentiment. But we also tend to see attorneys from the other end of the spectrum: lawyers who understand the benefits advanced eDiscovery technology can provide, but avoid it because of fears around overhead expense and surprise fees. Have you seen this within your own practice? If so, how do you advise attorneys who may have similar feelings?

I experience the same thing and, again, this type of thought process is completely understandable. When eDiscovery technologies were comparatively new, they seemed disproportionately expensive.  The cost to process a GB of data could exceed $1,000, hosting charges ran into the many tens of dollars per month and there were no analytics to expedite review.  When the project management service was in its infancy, too many of those providing services simply followed uninformed instructions from counsel.  An instruction to process data was not met with inquiries as to whether all data collected should be processed or if an alternative should be explored when initial analysis indicated the data expansion would be unexpectedly large. Further, early case assessment (ECA) strategies utilizing only extracted text and metadata were years in the future.  The only saving grace was that data volumes were miniscule compared to what they are today.  But that was not enough to prevent widespread reports about massive eDiscovery vendor bills. As you might suspect, the problem was not so much the technology or even the lack thereof as it was the failure to spend the time to develop an appropriate workflow and manage the eDiscovery process so the results were cost effective. 

Any tips on how attorneys can overcome the remnant fear of eDiscovery “sticker shock”?

This challenge can be met by research, planning, and negotiation: research into the optimal technologies and which providers are equipped to provide them, planning an appropriate workflow, and negotiation with eDiscovery platform providers to customize the offerings to the needs of your case. If you have the aptitude, consider investing some time and doing some research about eDiscovery solutions that provide predictable, transparent prices outside of the typical hourly and per-GB fee structure. A good eDiscovery platform provider should work with you to develop a fee arrangement that makes sense for your caseload and budget. There is no reason why even a small firm or individual practitioner cannot negotiate subscription-based or consumption-based fees for eDiscovery solutions the same way that forward thinking serial litigants like large corporations and insurers have. The pricing models exist and there is no reason they cannot be scaled for users with smaller demands. Under this type of arrangement, there will be no additional costs or surprise fees, which in turn will allow any practitioner to pass that price predictability on to his or her clients. Ultimately, this lower cost, increased predictability, and efficiency will enable an attorney to grow his or her book of business with repeat customers and referrals.

So, if an attorney is able to negotiate an alternative fee arrangement with a legal technology provider, is that the end of the problem? Should that solve all an attorney’s eDiscovery concerns? 

It’s a start – but no. Even with a customized eDiscovery technology solution, part of the concern for most attorneys is the magnitude of the effort required to respond to discovery requests.  On one hand, they’re faced with document requests fashioned by opposing counsel fearful of missing something that might be important unless they are massively overinclusive.  They ask for each, every, and all documents and any form of electronic media that involves, concerns, or otherwise relates to 30, 50, 100, or more discrete topics. On the other hand, the attorney must reconcile this task of preserving, identifying, collecting, processing, analyzing, reviewing and producing ESI in a manner that complies with the applicable discovery laws or case specific discovery orders… all under what may be a modest budget approved by the client. This is where experience (or guidance from an experienced attorney), as well as a good eDiscovery technology provider can be a huge help. The principle that underlies a solution to the conundrum as to how to manage an overly broad discovery request with a limited budget is: proportionality. Emphasizing this principle is a major focus of the 2015 amendments to the FRCP. 

Got it. I think the logical follow up question to that answer is: how can attorneys attain “proportionality” in the face of ridiculous discovery requests (while also not exceeding the limited amount the client is prepared to spend)?

The key to balancing these conflicting demands is insisting upon proportionality early and often.  The principle needs to be addressed at a granular level with a robust understanding of the client’s data that will be the subject of opposing counsel’s discovery requests.  For example, the number of custodians from whom data should be collected should not be a laundry list of everyone who might have knowledge about the issues in the case. Rather, counsel should be focused on the key players and how much data each has.  The volume of data that counsel can afford to collect, process, analyze, review, and produce should depend largely on what the litigation budget is, which in turn should generally depend on the amount in controversy.  There are exceptions to this rule of thumb, but this approach to proportionality needs to be raised during the initial meetings of counsel in advance of the first case management order. If the case is one where the general rule does not apply (e.g., a matter of public interest), the client should be informed immediately because the cost of litigation is likely to be disproportionate to its economic value and the client may prefer to have some other entity litigate the issue.  An experienced attorney should be involved in this meet and confer process because the results of these early efforts are likely to create the foundation and guard rails for the remainder of the case. Any issues that are left to future negotiation create a potential for costs to balloon in unexpected ways. 

Can you dive a bit deeper into proportionality at different phases of the discovery process? Is there anything else attorneys can do to keep cost from ballooning before data is collected?

As I alluded to a moment ago, one key to controlling scope and cost is to negotiate a limited number of custodians that is proportional to the value of the case. In larger cases, it will be appropriate to create tiers of custodians and limit progression into the lower tier custodians to those instances where opposing counsel make a good faith showing that additional discovery is necessary based on identifiable gaps of information rather than upon speculation about what might be found if more discovery is permitted.  If opposing counsel doesn’t agree to a limited number of custodians or staging discovery in larger cases, counsel would be well advised to prepare a case management order or a protective order to keep the scope of discovery proportional to the value of the case.  To be successful, an attorney and his or her technology provider will have to understand the data in the client’s possession and provide metrics and costs associated with the alternative approaches to discovery.

Great advice. How about once data is collected and analysis has begun? How can attorneys keep costs within budget once they've got the data into an eDiscovery platform?

Attorneys should continue to budget proportionally throughout the case. This budget will obviously include the activities identified by the Electronic Discovery Reference Model (EDRM). The EDRM provides a roadmap to respond to opposing parties’ discovery requests: identifying those documents that are needed to make our case, regardless of whether opposing parties requested them; winnowing the documents identified to a subset for use in deposition preparation; drafting potentially dispositive motions; and preparing for mediation; and, if necessary, preparing for inclusion on the trial exhibit list. The EDRM was designed to help attorneys identify documents that are reasonably calculated to lead to the discovery of admissible evidence or relate to claims and defenses asserted in the case.  In a case with 100,000 documents collected, that could easily be 10,000 to 15,000 documents. The documents considered for use in depositions, law and motion, or mediation will be a small fraction of that amount and will include a similar culling of those documents produced by other parties and third parties.  Only a fraction of those will make it onto the trial exhibit list and fewer will be presented to the trier of fact.

Responding to discovery and preparing the case for resolution are two very different tasks and the attorney’s budget must accommodate these two different activities. Monies must be reserved for other written discovery requests, both propounding them and responding to them, and for depositions.  Because the per-GB prices for these activities are predictable, an attorney and technology provider should be able to readily determine how much information they can afford to collect and put into the eDiscovery workflow.  Counsel needs to be ready to share this information with opposing parties during the early meetings of counsel. 

But what happens when there is just a legitimately large amount of data, even after applying all the proportionality tactics you described earlier?

Counsel should only agree to look at more data than that to which the parties originally agreed if opposing counsel can show good cause to incur that time and expense.  If more data needs to be analyzed, the only reliable way to avoid busting the budget is to use AI to build on the document classification that occurred during the initial round of eDiscovery activities. Counsel should take advantage of statistically defensible sampling to determine the prevalence of responsive documents in the data and cut off analysis and review when a defensible rate of recall has been achieved.  The same technologies should be employed to identify documents that should not be produced, e.g., those that are privileged or contain trade secrets unrelated to the pending litigation or other data exempt from discovery – enabling counsel to reduce the amount of expensive attorney review required on a given case.

By proactively managing eDiscovery proportionality and leveraging all the efficiency that modern eDiscovery platforms provide (either by developing the necessary expertise to do so or associating with an attorney who does) – any lawyer will be able to handle any discovery request in a cost-effective manner.

You mentioned choosing a database and legal technology provider. Do you have any advice for attorneys on how to choose the best one to meet their needs?

I won’t weigh in on specifics, but I will say this: do the necessary research or consult with someone who has. In addition to investigating the various technologies available, counsel must become familiar with a variety of pricing models for delivery of the technologies needed to respond to eDiscovery requests. Instead of treating every case as an a la carte proposition, consider moving to a subscription-based self-service eDiscovery platform solution. This allows counsel savvy with the technology to control his or her cases within the platform and manage costs in a much more granular way than is possible when using a full-service eDiscovery technology provider, without incurring additional licensing, hosting, and technology fees. With a self-service solution, a provider hosts the data within their own cloud (and thus takes on the data security, hosting, and technology fees), while counsels gain access to all the current versions of eDiscovery tools to help manage the client’s costs. It will also allow counsel to customize the platform and automate workflows to meet his or her own specific needs, so that no one is spending time and money re-inventing the wheel with every new case. A self-service solution also comes with the added benefit of being immediately available from any web browser and gives counsel the ability to transfer data into platform at the touch of a button. (This means that when a prospective client asks whether you have a solution to handle the eDiscovery component of a case, the answer will always be an immediate “yes”).

What happens if counsel does not feel ready to take on all eDiscovery responsibilities in a “self-service” model?

If counsel is not ready to take on full responsibility for managing the eDiscovery process but still wants the cost-savings of a self-service model, find a technology provider that offers project management services and guidance that will act as training wheels until counsel is ready to navigate the process without assistance. There are also service providers who offer flexible arrangements, where large matters can be handled by their full-service team while smaller matters or investigations can remain “self-service” and be handled directly by counsel.

Those are great tips, Gordon – I couldn’t have said it better myself. Any last thoughts for attorneys related to discovery and leveraging eDiscovery technology?

Thank you, it’s been a pleasure. As for last thoughts, I think it would be this: in 2021, no attorney should fear responding to eDiscovery requests. 

Attorneys who still have that fear need to start asking, “If the data exists electronically, can I use technology to extract what I need less expensively than if I put eyeballs on every document?”  The answer is almost always, “Yes.” 

The next question those attorneys should ask is, “How do I go about extracting the information I need at the lowest possible cost?” The answer to that question may be unique to each attorney, and this is where I recommend doing some up-front research and preparation to identify the best technology solution before you are looking down the barrel at a tight discovery deadline.

Ultimately, finding the right technology solution will enable you to meet every discovery request with confidence and ultimately grow your book of business. 

If you would like to discuss this topic further, please reach out to Casey at cvanveen@lighthouseglobal.com and/or Gordon Calhoun at Gordon.Calhoun@lewisbrisbois.com.