Do-it-yourself is a great concept, but as many of us have learned from home and auto repair, what works in concept may not always prove true in reality.
With this in mind, there is no one-size-fits-all model for bringing e-discovery in-house. When considering what and how much to bring in, there are two important factors.
First, how much e-discovery burden does a company have—is the level high enough to produce continuing savings or other benefits from developing more capabilities in-house?
Next, how much support, including budget, does the company have for bringing the work in-house? It is never a one-time investment, and typically requires adequate investments in infrastructure, technology, people, and process.
Yet, if the conditions are right, some companies can reap major benefits from bringing aspects of e-discovery in-house in the form of cost savings, as well as greater control and consistency.
When and How to Solicit Help
Small to medium-size companies that are not involved in serial litigation or investigations should probably continue to rely on outside counsel and companies to handle their e-discovery.
But they can still achieve lower costs and better outcomes by making sure that their outside counsel include at least one firm with broad e-discovery expertise.
The expertise of that firm should be leveraged across matters—even where that firm is not serving as primary merits counsel—to help ensure consistent, efficient, and defensible e-discovery processes, along with associated successful outcomes and cost savings.
For larger companies with a sufficient volume of e-discovery work, their first investment in bringing e-discovery in-house should be in people, not technology.
A knowledgeable e-discovery manager can help to assess needs and, at a minimum, be a center of expertise for the company, managing use of outside e-discovery resources to help ensure that the company is getting high-quality services, the best available technology, and competitive pricing.
The rise of e-discovery companies and other alternative legal service providers has produced a very competitive market, so the most achievable savings can be realized by smart deployment and management of those outside resources.
Who Should Manage What
Discovery managers need not be lawyers, as long as they have the requisite e-discovery expertise and can collaborate with and gain the confidence of other internal personnel to approach them early and often with e-discovery matters.
E-discovery managers can also handle legal holds and, if there are many such holds—e.g. more than 10—it can be cost-effective to license technology to issue, manage, and document legal holds.
This relatively small investment in technology can return cost savings in a timely way, plus reduce risk by facilitating legal hold best practices, including timely hold issuance, acknowledgements, reminders, documentation, and lifting legal holds when appropriate.
Only companies with ongoing streams of e-discovery work—and sufficient ongoing budget—should consider taking the plunge to bring in-house the more intensive parts of e-discovery, including data processing, hosting, analytics, and review.
Those tasks require significant expertise and support—often 24/7—as well as substantial ongoing investments in people, technology, and infrastructure. There is no ‘easy button,’ and don’t believe anyone who tells you otherwise.
Risk and Process Management
The risks of doing e-discovery wrong are substantial—and if a company takes on those e-discovery responsibilities as a litigation party or investigation target, additional risks and complications can arise.
These can include second-guessing on the adequacy of their processes, compromising of privileges, and reducing the ability to deflect blame when snafus occur—as some inevitably will.
It can be dangerous and expensive for companies to lower their standards for in-house discovery—e.g. insufficient support, outdated software, longer delays, or limited expertise—when there are great e-discovery resources available outside.
The best way for companies to right-size their internal e-discovery resources is to proceed incrementally. They should start by bringing in one or more e-discovery managers, and automate and optimize legal hold procedures.
After that, it helps to consider whether it is cost-effective and sustainable to bring in-house and support the more complicated parts of the process—including technology and substantial human resources required to provide the highest levels of service and support.
We know of several companies that, with sufficient ongoing resources and experience, have learned to do this very well. But others have tried, then returned to the outsourcing model after a costly experiment.
Managing e-discovery in high-stakes matters can be risky. For most companies, outsourcing most aspects of the process will lead to better outcomes—and ultimately lower costs—than trying to develop and maintain all of those resources internally.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Reproduced with permission. Published Feb. 23, 2023. Copyright 2023 Bloomberg Industry Group 800-372-1033.