Is document review legal work?

Is document review legal work?
Toronto-based law firm specializing in document review was acquired by an accounting firm; the acquiring company disclaims that document review is legal work. Similarly, many companies that are not law firms now offer “legal” document review as a service.

So, is document review legal work? It depends.

Sometimes the answer to the question seems obvious. Document review occurs for many reasons and in different contexts. It doesn’t take a legal education to determine whether or not a document contains a specific word (i.e. “balloon”) if the presence of the word alone is the measure of the review’s completeness and efficacy; indeed, a computer can do this faster and more accurately than humans. But arguably, where a document needs to be vetted for a complex legal concept, such as privilege, a legal education seems mandatory.

We could expend much time and energy detailing the gradations in between a review for “balloon” and a review for privilege and assessing whether each proffered example is “legal work.” But, I don’t think that method of determining whether document review is “legal work” gets us very far.

Instead, I ask: Given the economics, purpose, and proposed process for the outsourced document review, what are the legal risks we might encounter, and what delivery mechanisms, contractual protections, indemnifications, and process strategies are available to minimize those risks to a level understood and approved by the client? This requires an analysis of the proposed delivery model  for the document review and the objectives of the document review compared against the client’s risk appetite given the full legal context in which the document review will take place.

Pausing here: Implicit in my answer is an assumption that questions about how the document review will be performed, including by whom and how, require legal review. Arguably it’s a matter of protection for lawyers and their clients. In most jurisdictions, where a lawyer is conducting a litigation or regulatory investigation, he or she must supervise all those participating in the delivery of legal services. To my knowledge, the question has not been litigated in Canada in the context of document review, but in the U.S., there is case law and bar association advisory opinions confirming lawyers are responsible for the process and outcome of document review when it is subcontracted to third parties.

Sometimes I wonder if asking whether review is “legal work” is similar to asking if litigation requires a lawyer. Litigators understand their value increases given more complex facts and law, and the difficulty in the presentation of the evidence. But clearly, many people get by without a lawyer — for better or worse; see the legions of self-represented litigants in the courts. But I digress.
Also, I amuse myself by analogizing outsourcing document review to outsourcing IT services. Few would consider doing so without having knowledgeable IT outsourcing counsel review the arrangements, yet document reviews are routinely outsourced without an e-discovery lawyer reviewing the arrangements. But I digress again.

Corporate arrangement. Insurance arrangements may differ if the entity performing the document review is not a law firm. Indeed, some companies have insurance limits lower than law firms that perform this work, or different exclusions (including around warranties). And, of course, privilege protections may not follow information communicated to a document review company in all circumstances. Pay attention to contracts, insurance arrangements, indemnities, liability exclusions, and the process protections for communications. Review of out-of-jurisdiction arrangements require particular attention as conflict of laws issues arise.

Delivery model. Third-party document reviews can occur on-premise or off-premise (distributed): either the reviewers are at a single location or are working remotely (often from home). A fully distributed model raises questions about information and document security, maintaining confidentiality and privilege, and supervision generally. This is not to say that distributed models
cannot overcome these challenges, but that these must be acknowledged as a function of the delivery model. Concerns about security, confidentiality, and privilege are not avoided with on-premise reviews, as security can be lax even where reviewers come together, but the effort required to check on this may be lessened. Certain review contexts preclude off-premise review altogether by operation of law.

Status of reviewers. Reviewers are frequently not employees of the entity engaged in the document review. Reviewers may or may not be called to the bar, in good standing, or insured, and requirements can vary by jurisdiction. There may be indemnifications each has signed in relation to their temporary employer. The quality of conflicts screens prior to assigning lawyers to projects may vary widely; it may be formalized, done at an individual or matter level, or not at all.

The use of lawyers. Some document review is best done by non-lawyers. I have required engineers, nurses, or other subject matter specialists in certain contexts, with overall lawyer supervision. Similarly, the degree of legal knowledge and education required may depend on the question being asked and answered within the review. Sometimes, paralegals or university students can do the work just fine.

Product category. In your decision to outsource, what are you buying? This matters. The business model of document review companies varies: some are effectively staffing agencies, promoting lower cost but having minimal processes. Others are effectively selling their process, which is generally standardized sufficiently to lower cost. The difference is material: one commoditizes the wage, the other structures the process in a commoditized manner.

Supervision and quality. How do you know that you got what you paid for? There are different ways to answer this question. Are you buying a product that requires additional (supervisory) review, or are review mechanisms built into the deliverable (such as through standardized reporting)? Who validates the review results, and how? How are “interim” errors identified and corrected? What happens when the “interim” errors involves interpretations of law?

Where a client or law firm decides to subcontract document review, it may want a knowledgeable lawyer to confirm the arrangement, process, and proposed deliverables (including reporting), which will serve to minimize overall risk. The risk of implementation falls with external counsel and ultimately, on the client. Indeed, savvy clients, including those that have ultimately borne the economic burden and reputational risk of failed document reviews, may learn to insist on lawyer-structured and supervised review.

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