As electronic discovery in Canada evolves roughly in parallel with the U.S., if not at a slower pace, many law firms and corporate legal departments here are beginning to bump up against a decision point that more of their U.S. counterparts have already confronted: outsource or “insource.”
Vendors with special expertise and technology sprang up to handle almost every phase of the Electronic Discovery Reference Model (EDRM), the blueprint for managing the e-discovery process. Firms and legal departments typically lacked the skills and infrastructure to efficiently perform many of the tasks themselves. So the norm was, and still is in Canada, to outsource to “vendor companies” everything from collection, to preservation, to processing, to review, and production of documents — especially in large cases. Now some litigators and firms are questioning this strategy.
In this first of a two-part series, we start to look at the pros, cons and ins and outs of bringing some of those functions back in-house — of insourcing.
“There are two reasons for law firms to be looking at this,” says Dominic Jaar, president of Montreal-based Ledjit Consulting Inc. and CEO of the Canadian Centre for Court Technology. “I think some have seen vendor companies making a lot of money doing collecting, processing, hosting, and so on, and they’re saying, ‘I want a piece of the pie.’ The other, perhaps more fundamental reason is that many litigators feel they have lost control over part of the process and they want to take control back.”
Jaar, a lawyer whose consulting practice specializes in e-discovery and information management, believes firms can take back control in some areas, but cautions there are substantial obstacles, and in many cases it requires a significant commitment of resources.
He also notes the lure of additional profits from insourcing may be illusory. Some large U.S. firms that initially insourced e-discovery functions they had been outsourcing have now begun to “re-outsource,” he says. They acquired technology and expertise, then found the technology, while it might work well in some cases, did not work well in all. There was a continual need to acquire new technology, which eroded anticipated profits.
At Borden Ladner Gervais LLP, the philosophy is a bit different, says Michael Condé, its Vancouver-based national director of litigation support. “We don’t see [insourcing] as a revenue opportunity so much as a way of providing better, more efficient service to clients.”
Condé heads a 16-person litigation support team that works with lawyers in five of the firm’s six offices. It’s a mix of legal and IT personnel. Other large firms have similar structures in place, but not all work the way BLG’s does. “We have no hourly goals, no revenue targets,” notes Condé. “We simply provide the services. We do charge for some of those services, but [the department] is not driven as a revenue generator. For that reason, we’ll do whatever we can in-house, but outsource everything else.”
Decisions about what to insource are made function-by-function, matter-by-matter, depending on the scale of the case, how quickly the tasks need to be completed, the complexity of the work, the cost involved, and availability of resources.
If data collection from the client requires strict forensic protocols, for example, BLG will outsource because it lacks deep skills in this area. “Beyond that,” Condé says, “every other part of the e-discovery process we can and will do.” But if the case is a large one involving hundreds of terabytes of data, it will almost always outsource initial processing to cull potentially relevant documents. (BLG is now exploring an upgrade so it can do more of this work in-house.)
And if not enough junior BLG lawyers are available to do initial review of documents to determine likely relevance, the firm will contract work directly to freelancers or a vendor firm. It is even exploring outsourcing to offshore firms.
Jaar believes it makes sense for law firms and legal departments to insource some phases of e-discovery but not others. Firms should be involved in advising clients — before the onset of a case — on good information management, the first phase in the model. They will have to be involved in identification of which documents need to be collected and preserved for a specific case. In Jaar’s opinion, the actual collection of data should be left to vendors. A law firm exposes itself to charges of conflict of interest if something goes amiss in the collection phase and documents or metadata are not initially collected or subsequently lost.
Preservation of the data once collected and hosting it in a secure data centre are something larger firms, at least, could insource, says Jaar. It’s something the client could do, but it’s more often outsourced to a vendor today. “A law firm could invest in a good data centre for preservation. But the mere fact that you have a couple of servers doesn’t mean you can host data.”
That said, relatively inexpensive new technology for “virtualization” — storing and managing multiple completely separate and secure databases on a single server — does now make it more feasible for law firms to consider doing this themselves. Processing document bases, culling them using automated processes in preparation for review, is also something firms could do themselves at least for small and medium-size cases, says Jaar. Software, though not inexpensive, is readily available. Many firms, like BLG, are already using or acquiring it. It can quickly eliminate system and program files that are often delivered on a hard drive along with data. It can filter out duplicate files — either peer duplicates, which are identical, or near duplicates, such as multiple iterations of messages in an e-mail thread. And it can automatically open “compound” documents such as .zip archives to make them searchable.
With more human intervention, users can tell the software to isolate only documents that fit a relevant time frame, and are either authored by, sent to, or received by identified players. Beyond that, they can do full-text searches on the remaining documents to find the most relevant.
Search technology is evolving. Boolean logic which required lawyers to think of every synonym and cognate for search terms is giving way to concept and other sophisticated techniques. A search for “contract,” for example, with a concept search tool automatically finds all documents with the word “contract” but also “letter of agreement,” and dozens of other related terms.
Firms need a document review platform to insource these functions, which differs from platforms such as Summation and Concordance, which can also perform some of these functions, says Jaar. Choosing a document review platform can be a major investment decision — they cost between $10,000 and $1 million — and choosing the right one is difficult because the technology keeps evolving. “Every year, there’s a new kid in town that everybody wants to work with,” says Jaar.
Sophisticated search tools, which some litigators don’t like because they don’t entirely understand how they work, and the subsequent review of documents by lawyers raise a whole flurry of additional issues and obstacles for firms and departments considering insourcing e-discovery. We’ll take a look at some of them next issue.
Gerry Blackwell is a freelance technology writer based in London, Ont. Read his blog at http://afterbyte.blogspot.com.