Lawdable

E-Discovery is Trust and Commitment

Richard Stout — Wed, 10 Mar 2010 10:18:19 -0500

There’s a very good post on Clearwell’s e-discovery 2.0 blog about the process of bringing e-discovery in-house, or more importantly some of the questions that need to be asked during that process.

One particular observation in the post stuck out to me: “…every company today, believe it or not, has an e-discovery solution in place.” This is very true. Many companies who must scramble or shift work around internally to address a pressing matter or who automatically send any and all litigation straight to outside counsel might not characterize their approach as a “solution” (more of a default mechanism, maybe), but it is a solution, nonetheless. From that point forward, the steps and questions laid out in the post are certainly good ways to look at the in-house e-discovery process.

The statement also juxtaposes another observation in the post about in-house departments going through the RFP process and seeking an “end-to-end” e-discovery solution. These two statements, in my view, are actually directly related. Many in-house departments are not equipped to handle any significant e-discovery work, so in the past they simply sent that work to their law firm(s) because they could physically handle the review of the documents (and were already handling case strategy). Now that the in-house departments are under incredible pressure to cut costs, they must come up with a different solution, but still don’t have the resources or time to handle it internally. They want a simple, straightforward solution that they can hand off and know it will be handled in a quality, cost-sensitive manner.

I believe this encapsulates one of the most challenging issues we face in the e-discovery realm today, one that our company has spent an inordinate amount of time addressing internally and that

ultimately helped us create the “end-to-end” solution that we offer. The issue is that there is no one-size fits all in the world of e-discovery. Every case is different. Sometimes a different review tool is needed; sometimes it makes perfect sense to use an early case assessment tool, sometimes it doesn’t; sometimes it’s better to bill by the hour instead of billing by the document, gigabyte or custodian. For us, the ability to offer flexibility was central in our end-to-end service – we’re not tied to one review tool or processing partner, we’re not tied to one type of pricing, we’re not forced to use anything because of previous business purchases, mergers or partnerships.

When simplicity and a straightforward approach are paramount, it boils down to two basic questions: 1) Is the in-house department truly ready to step away from the old way of doing things? and 2) Is the department ready to tell everyone involved, “This is how we’re doing things now?” Simply put, it is trust in the process and commitment to it.

If there’s anything that can be learned by those clients initiating the RFP process, it’s that there is an entire industry of e-discovery providers that eat, sleep and breathe these matters and share a focus on initiatives like protocol, effectiveness, cost reduction, knowledge retention, defensibility, litigation ROI, and dozens of other business-focused issues. In fact, many law firms rely on companies like ours to provide these services and focus to their clients. Only a little bit of due diligence on this front should ease any trust concerns an in-house department might have.

Then comes the issue of commitment, and we see this challenge every single day. In-house leaders are often in terrible predicaments when it comes to making changes in the e-discovery process, especially when they have become so accustomed to particular arrangements. But what we’ve seen time and again is that when in-house counsel sets the tone, works with its partners (including their law firms) to create a solution and a new e-discovery process is implemented, the results trump everything. At the end of the day, the ability to point to a better, more consistent process and to quantify cost savings and value are worth their weight in gold.

So while building an e-discovery process might seem like an arduous task, it really isn’t. It comes down to trust in your partners and commitment to your process, and the payoff on those fronts is significant.

The Spotlight Shines on Project Management

Richard Stout — Thu, 21 Jan 2010 15:09:31 -0500

There’s a great post up on the ‘3 Geeks and a Law Blog’ that frames the current discussion regarding project managers, or, more specifically, the professional background of and what potentially makes a good project manager.

We’ve discussed this topic on Lawdable before and it’s a worthwhile, ongoing conversation within law firms and other legal service providers like Counsel On Call (although no one is like us, of course). One can very quickly dive into topics ranging from law schools and their e-discovery curriculums (or lack thereof) to whether the disciplines of project management can truly be absorbed by a practicing attorney, among a host of other sidebars.

Here’s what we’d like to tack onto the conversation: excellent project management is completely dependent on the individual project manager. If you look hard enough, there are lawyers out there who are great project managers, who understand how to budget and track metrics, who know how to design and implement proven protocols -- and who have been doing this for years. On the flip side, there are undoubtedly non-lawyers who can come into a project management role, add a lot of value, and do a better job than 95% of the lawyers who currently have project management responsibility. That’s not a knock on those lawyers, but a nod to those non-lawyers’ skills.

The training PMs receive and their personalities affect the people most likely to stay lawyers in the first place. The old adage that ‘I didn’t become a lawyer to do accounting’ is true. However, those who’ve been in law for awhile also see that there are different career development avenues to pursue and to help their clients. (And who’s to say PMs can’t make partner in the law firm of the future? Clients want to work with great PMs; that can mean more business from a PM’s clients.)

Circumstances, experiences and exposure can also help you develop the skills and expertise to push you in the direction of project management. In the same manner that lawyers involved in e-discovery today may not have started with technological understanding or had any initial training; those who have been thrust into the fire might have had an interest created, and then received the training and knowledge to accomplish and even master the topic. So, too, some of those thrust into project management may find that they like it, are good at it and want to pursue it to create the necessary expertise to become premier in the field.

We’ve found great lawyers who make great project managers, but we’re also in a more unique position than, say, a law firm, for instance. Our lawyers were looking for a different way to practice law and that’s why we’ve found one another; that departure from traditional thought also helps us identify those who could potentially make great project managers. And while MBA-types might run individual departments at a law firm, it’s usually a lawyer from within their own ranks who serves as a project manager on a specific case or matter. Some of those lawyers make great PMs, but many are so grounded in traditional lines of thinking that it’s difficult to break away and innovate; great project management requires a balance of innovation and proven protocols.

That’s a long way of saying there are different ways to approach this issue, and it’s going to be a focus as more people become attuned to it. In the end, it’s great for our profession.

The "Zubulake" of Legal Holds

Barry D. Willms — Wed, 20 Jan 2010 09:20:32 -0500

The Judge of Zubulake fame (various decisions in 2004 and 2005 which became the handbook on e-discovery obligations and the precursor to the amended Federal Rules of Civil Procedure in December 2006), has written a lengthy opinion outlining the obligations of parties to issue a properly worded, written legal hold to employees who might be relevant to an anticipated litigation.

In late 2003, plaintiffs’ counsel was retained for a lawsuit, which was filed in February 2004. The case was stayed for a number of years and finally a document production was made in 2007. This was found to be deficient and having gaps in what should have been produced.

While the Judge did not grant defendants’ motion to dismiss the case, she did grant an adverse jury instruction, stating that plaintiffs were grossly negligent and that relevant ESI had been destroyed, which the jury may presume was favorable to the defendants. She also imposed monetary sanctions of reasonable costs, including attorneys fees for dealing with the declarations, added depositions and this motion.

So what was the evil done by plaintiffs in their preservation efforts?

Plaintiffs’ counsel telephoned, e-mailed and distributed a memorandum instructing the relevant employees to be over, rather than under, inclusive, and noted that emails and electronic documents should be included. Counsel indicated that the documents were necessary to draft the complaint, although they did not expressly direct that the search be limited to those documents.

So how was the legal hold deficient?

It did not specifically direct employees to preserve (and not destroy) relevant documents
It did not create a mechanism for collecting the documents
It placed total reliance on the employee to search and select what the employee believed to be relevant records

Problems were discovered when the defendants noticed gaps in the plaintiffs’ production. Follow up questions revealed some specific problems:

Some plaintiffs destroyed backup tapes in 2004 after their duty to preserve arose
Declarations on collection efforts were at best vague, lacked detail or at worst were an attempt to mislead
Counsel failed to properly monitor/supervise the employee preservation and collection efforts. They could not identify which files were searched, how the search was conducted, who was asked to search or what they were told

A helpful reminder: The duties to preserve documents when litigation is anticipated are clear and they include a well-written instruction plan for preservation and collection and the guidance and supervision of counsel.

Q&A With Attorney Chris Cotton: Haiti Update

Lawdable — Mon, 18 Jan 2010 11:11:14 -0500

We've been privileged to get to know Chris Cotton over the last couple of years as he's become an integral part of Counsel On Call's Nashville attorney team. His stories from his time spent in Haiti are well-known in our company, and his work with the Hands and Feet Project has been a source for inspriation for many of us (at right: Chris in Jacmel with orphan Merci Dieu, which mean "good God" in Creole).

So when the earthquake struck Haiti last Tuesday, Chris instantly became a source of news for our staff through his communications with people on the ground in Jacmel and put an even more personal face on the tragedy. Chris was interviewed as part of a local news story and the HAF project has been profiled on several national media outlets in the last few days, and the stories change with each passing hour. Chris was able to break away and chat with us for a few moments:

What are some of the latest updates?

It’s been a really tough, but great weekend… as of Sunday morning, no aid had reached Jacmel since the earthquake last Tuesday… 40,000 to 70,000 people were cut off from medical aid, food and water for five days. But yesterday the first private planes began landing at the Jacmel airport, which was great. I think five or six were able to land during the day and they expect 25 today (Jan. 18).

How big of an area is Jacmel?

Geographically it’s not that big of an area, and it’s about 25 to 30 miles south of Port-au-Prince, but it’s only accessible by one road, which was completely destroyed in the earthquake. Jacmel is a base for about 70,000 people and we know that there are at least 5,000 dead, 20,000 to 25,000 injured, and 75% of the buildings were destroyed. So that means there are at least 30,000 people with no shelter in the community, which is really just hard to get your head around.

What’s your involvement in the Hands and Feet Project?

It was started five years ago by the Christian music group Audio Adrenaline, and the lead singer, Mark Stuart, had been a friend for awhile and they needed someone to run it. This was back in 2004-05, and I had been working at the record label for awhile. This allowed me to split my time between the label and working with the HAF Project and I spent 2005-06 in Jacmel.

The goal was to build orphanages around the world, and Jacmel was the first… I won’t say it was completed, because it never will be, but there are 45 to 50 kids – or were, because now they’ve taken in at least 15 more. There are four American staff and 10 to 15 Haitian staff. The kids are fine, the staff is fine, the building is actually fine… ours was one of the only buildings not damaged in the earthquake. Most of the orphanages in Haiti are thankfully built to a higher standard. It’s good because we can focus not on our needs, but on the needs of the community… Like I said, the kids and staff are fine – relatively speaking, because they’ve seen horrors we can only imagine – so we’ve been able to share supplies and our store house… and we had a private plane donated that is going to fly in and out of Jacmel five times a day so we can get the supplies and foods in that are desperately needed.

What are the age ranges of the kids at the orphanage?

They range from a couple of months old to our oldest child who is nine… and these are true orphans. I say that because there are many kids who are “orphaned” in Haiti because their parents can no longer feed them, or will give them up because they know they have a better chance of surviving.

Yes, this tragedy has certainly shined a brighter spotlight on Haiti… we’ve seen stories about families who can’t care for all of their children and some of the common practices in those situations… Does this tragedy amplify the mission or change it at all, or has there been any time to process that?

Truthfully, the entire point was not to just take in orphan kids, and we don’t do adoptions in the States or anything like that. Our mission was to see if we could help out an entire generation of Haitian kids, educate them, and turn these kids and adults back into their community so they could really make a difference locally. The desire was to make an impact on those around us and that’s never going to change, but maybe the means to do so might be altered or expanded based on the circumstances, and maybe that’s a blessing.

Before the earthquake we ran programs for the community, like bringing in doctors and dentists to help and serve the broader Jacmel area… the Haitian people are very relationship-based, and we really got to know our neighbors and they were very protective of us and we have great friendships with them. This tragedy has changed the focus, and we’re going to have a lot more kids, and we’re going to have to expand and a greater role of helping those in the broader community… we don’t want to be an island within an island, have a big wall around us or anything… our gates are always open. But there's going to be more need than ever.

It’s a true blessing to be able to coordinate the relief effort, but the price of doing business is going to skyrocket. Before, the day-to-day costs of getting supplies in and out of Jacmel was high, but now it’s hard to imagine, and probably going to be very expensive. As an aside, one of my HAF friends there is now running the Jacmel airport – it just shows how desperate and even dicey things are.

If people want to help?

Go to HAFproject.org and there is a donations page… peoples’ generosity has been amazing, but this will fade from the public consciousness in the next weeks, which is completely normal. But it works on an inverse scale: as awareness decreases, the needs will increase. And so it’s just the tip of the iceberg of what it’s going to take to help the Haitian people. Over the next couple of years, it’s going to be hard to get relief there and more support than ever is going to be needed.

Is there a chance you’ll return to Haiti soon?

A friend on the Board emailed me last night and asked if I was ready to go… and I said yes. I’m pretty eager; I’ve been down there many times and even though my friends and colleagues are OK, you make relationships with people in the community and want to find out who is OK and provide relief for some of our workers who are on the ground and who are physically and emotionally exhausted at this point. I hope to help.

Chris Cotton is an attorney with the Nashville office of Counsel On Call. He is a 1997 graduate of The Pepperdine School of Law and practiced in the entertainment field for eight years in Los Angeles before moving to Nashville in 2005 to work at a record label and to run the non-profit organization The Hands and Feet Project. He now divides his time between his work with Counsel On Call and his private practice, primarily representing music artists.

Haiti Is On Our Minds

Lawdable — Fri, 15 Jan 2010 15:50:43 -0500

Like millions of others, we've been watching the developments in Haiti very closely and have been struck with the magnitude of the tragedy and the monumental job ahead -- in the coming hours, days, weeks, months and years.

It has been especially difficult for one of our Nashville attorneys, Chris Cotton, who helped build and open an orphanage in Jacmel, Haiti, in 2005-06, as part of the Hands and Feet Project. He has been communicating with friends in the area and the HAF website is posting updates from Jacmel; the stories are amazing, disheartening, tragic... the full range of emotions. Jacmel is completely cutoff from Port au Prince and other areas that could potentially provide supplies; the situation is truly dire.

We plan to post a Q&A with Chris on Monday, but in the meantime we'd like to pass along a link from CNN story on the HAF Project's orphanage. If you're in the Middle Tennessee area, Chris says to watch Ch. 4 (WSMV) at 6:30pm for a story they're doing on HAF and Haiti. In the meantime, we'll keep the people of Haiti and their families and friends in our thoughts and prayers.

What Are Your (Legal- and Business-Related) New Year's Resolutions?

Candice Reed — Wed, 06 Jan 2010 10:42:20 -0500

OK, this is just a different (some might say lame) way of asking what your goals are in 2010… but ‘tis the season, eh?

There’s never been more at stake in the legal profession than there is now. There’s a palpable sense of change in the air… especially concerning the new legal model of law firms and the impact it will have on the way law is practiced and billed. But I’m not one to wait around for that to truly happen, so why not start moving forward? Here are just a few of the things attorneys have to tackle in 2010:

True cost containment of legal expenses … If you’re one of the thousands of in-house managers who has taken the reigns of your budget, designed new processes, brought more work in-house, cultivated new outside counsel relationships, and engaged alternative legal services providers… well, here’s hoping that you get more sleep in 2010, because you’ve likely been busier than ever. Those who’ve undertaken the commitment to cost containment should be applauded and hopefully the work they’ve done will make life easier down the road. This process will continue to evolve for these good people, and thousands more will start down this path anew in 2010. The point: This is the new way of life for corporate legal departments.

Alternative Fee Arrangements … Many of you have spent the last few months working on new billing structures with outside counsel, and many are still in the process. There are scores of conflicting reports about these arrangements, so it will be interesting to see how it plays out. My guess is that we’ll hear plenty about the arrangements that work – after all, law firms have wonderful PR people – and we won’t hear much about the efforts that fail. But here’s the key: AFAs must be mutually beneficial, or they simply won’t work long-term. A certain amount of risk-sharing must take place and there must be value. I think AFAs have the ability to change the age-old approach utilized within law firms – and who handles what -- but a lot of the AFAs in use might really just be window dressing.

The Document/ESI Retention Policy… Interest in the design of document retention policies (or ESI Management Policies, as Barry likes to say) exploded in 2009. There’s just so much data now that companies are overwhelmed, and everyone is leery of 1) the smoking gun e-mail that’s been sitting in someone’s inbox for six years and 2) getting exposed for not implementing a solid policy. There is an obvious marriage between these two fears that in-house lawyers must officiate, and there’s no sign this responsibility will ebb in 2010. The key is in the implementation, and as our wise scribe Barry likes to say: “If you’re not enforcing your ESI policy, you have no ESI policy.”

Consistency, Process Across the EDRM… Everyone is dealing with e-discovery at some level, and many companies already have created some sort of approach to the actual review of documents when litigation hits. At the same time, most have spent their time and resources trying to figure out the document retention policy first before fully diving into project management, software and the attorney review. But this is where real dollars are saved and the spotlight will continue to shine on the processing, review and production of documents and creating a cohesive model encompassing all phases of the discovery process.

Convenience Versus Cost … Ah, the age-old question! Traditionally, when an in-house department has overflow work, it’s sent to outside counsel. Litigation, due diligence, employment work and other heavy lifting might also be completely turned over to the law firm simply because a department doesn’t have the resources. This approach is being evaluated, to say the least. But it doesn’t end there; many in-house departments now seek unit pricing that blends services (software + attorneys) for e-discovery matters because it makes budgeting easier and there is (or should be) some risk-sharing with the partner. The key for those who must closely monitor their legal spend is to understand that some providers don’t exactly assume any risk in this scenario because of the excessive padding they’ve built into their per-unit price. A general rule of thumb: if you can’t buy a super-value meal for the price you’re paying per-document, you’re paying too much.

Of course there are myriad other issues that in-house managers must create goals around in 2010, and we look forward to discussing many of those in the coming months. In the meantime, I hope you have a wonderful and prosperous 2010.

It's 2 a.m. Do You Know Where Your E-mail Is?

Barry D. Willms — Fri, 18 Dec 2009 09:49:15 -0500

I have long argued that companies keep too much e-mail. There are numerous approaches to dealing with this problem that I have seen. First are the companies that have no policy at all. Well, actually they have as many policies as they have employees, as everyone is doing their own thing. This not only enlarges the company’s volume (and therefore cost), but it makes it very difficult to preserve e-mail for litigation or other investigations.

Second are those who have a policy but do not audit it through training or technological means. They’ve gone through the process of creating a policy but never quite got around to seeing to it that their employees follow it.

Third, there are those who have a policy, train on it initially, implement and audit but over time it becomes less important as everyone focuses on their job and no one is assigned the task of making sure there is compliance.

Finally, there are those who arbitrarily deal with their e-mail through a purely technological methodology and do not allow their employees to make any decisions about it at all.

Whatever approach describes your company, you also must deal with the issue of employees using their personal e-mail accounts to handle work e-mail. In a recent survey by Axway, 82% of employees surveyed said they use personal e-mail accounts to send large files that would otherwise not make it through their company e-mail systems. It’s not that they’re trying to hide anything; they are simply trying to get their work done and found that it’s just too much hassle to get IT to let that particular document through the system. Perhaps they even chose to have it sent via a disc of some kind but normally they need that e-mail immediately and thus resort to using their personal account(s) to access it.

This is the reality and thus has huge implications for security, record retention and litigation hold purposes. Is your trade secret and confidential information sitting in Gmail or Yahoo! accounts? Or on the personal computers of your employees? What if it’s the official record that the company has a legal or regulatory obligation to keep for a certain time period? What if that employee becomes subject to a litigation hold that requires the company to preserve that information? Can we simply put a hold on his/her shared drive and e-mail accounts at work or must we now make sure his/her home computers are impounded for the same purposes? Obviously there are privacy issues at work here as well.

The employee is usually doing this for work reasons, efficiency, etc. But do they realize the potential impact on their personal privacy if their home computer is subject to an evidentiary hold? Do the employee’s spouse and children realize that their information might be subject to an attorney reviewer looking at their e-mail if it’s co-mingled with corporate e-mail on a home computer?

If employees and companies start asking the questions and talking about these practical issues even more, perhaps we can come up with solutions that work for the reality of the world we live in. Follow Barry on Twitter.

ESI in 2010: Trash or Treasure?

Barry D. Willms — Mon, 30 Nov 2009 14:31:01 -0500

While calling 2010 the year of deletion might be over the top for most companies, it is a topic to consider during our current economic realities and the constant threat of litigation.

There is no time like the present to undertake a house cleaning of electronically stored information (ESI). Storage costs, poor organization and expensive restoration of backup tapes for litigation purposes are the norm, while at the same time there are many available tools to de-duplicate, organize and store inexpensively.

Most in-house lawyers now understand that a company’s ability to save money when litigation hits starts before litigation hits. That means having an understanding of how your company's ESI is stored and organized and proactively doing something about it. If you have no litigation hold pending that would require you to preserve certain ESI for the duration of the legal proceedings, now is definitely the time to act.

Record retention or ESI management have two parts: retain and delete. Many companies are pretty good at the “retaining” part, although they do need help implementing and organizing it. The harder part is often the “delete” part. This is true not just for the organization as a whole but also for the people who make up that organization. Many people are loathe to delete their lunch invitation e-mails, let alone anything that rises to the level of a substantive subject. It takes a shift in thinking, a shift in policy or, more often than not, a shift of money from your company to a vendor to process the ESI – and the lawyers to review it in a large e-discovery project – before a shift really takes hold.

It often takes that first million-dollar bill during the discovery phase of litigation to wake up a company executive or law department that it might make sense to deal with the excessive ESI issue. Actual money that affects the bottom line is often the only true motivator. Otherwise the expense and/or the mental capital to deal with the issue from a technology, planning and implementation perspective is often too much to handle.

Buy-in at the top is needed. Make your case for how this type of deletion and organization of ESI is critical to the company bottom line. Half of all in-house lawyers believe that their company is not ready to handle an ESI discovery project. I wonder if that’s the half that hasn’t yet been hit with huge litigation and believes that they won’t get hit with litigation this year?

2010 is fast approaching and the new year brings all things new. For many, dealing with ESI would certainly fall under the “new” category -- and makes for a great resolution.

Don't Hit The Snooze Button On ESI Management

Barry D. Willms — Thu, 12 Nov 2009 09:28:55 -0500

There’s almost nothing like the words ‘record retention policy’ to quickly put a group of grown adults asleep. If you’re lucky enough to be placed on the team to formulate said policy, you probably wonder who you ticked off and should remove from your holiday card list. Reminds me of the Dilbert where the boss starts a meeting and falls asleep while talking, slams his head on the desk only to wake up and ask what the meeting was about. They all said ‘the records retention policy.’

But hey, some of us actually like putting these policies and strategic plans together... they offer a lot of value when properly implemented.

I actually prefer to use the term ‘ESI Management Policy’ because that’s really where you get the most bang for your buck. While it’s important to know how long to keep certain vital records, almost nobody seems to care about the boxes piled up like the Pyramids in Egypt that you still pay monthly storage fees on. What they care about is the cost to store, identify, collect, review and produce electronically stored information (ESI).

In the old(er) days, the concern wasn’t about volume of ESI, but content. Everyone was concerned about the smoking gun e-mail – the stupid thing written that no one thought would ever see the light of day. While that’s still a major concern in this current era of extremely tight budgets, it’s not just the smoking gun that can cost the company, it’s also the mounting volume. There are real costs that must be identified and properly dealt with and managed via a policy that helps employees care about their own ESI management.

Don’t jump straight to technology for your solution, however. First, understand your company culture, where it is and where it needs to be regarding how employees create, send and store ESI. Second, create a policy that moves your company culture in the direction you want to go. Don’t try to make it all in one step; try the incremental approach. Grabbing for too much at one time only breeds unrest, and unrest breeds non-compliance. The only thing worse than not having an ESI management policy is to have one that no one follows.

Once you get the policy and the employees moving in the right direction, then it’s time to implement technology to help the company achieve its overall goals, which is cost savings through less volume, and, finally, organization of that remaining volume.

In a previous post, I stated that people and technology are both needed and must work together. Those words can be applied to most situations these days, but especially here. Training and buy-in on the part of your employees along with technology will help you achieve your goals.

Cost Predictions Rely Equally on Technology and People

Barry D. Willms — Wed, 04 Nov 2009 09:44:05 -0500

I’m a little late on this one, but this article outlines the use of technology to budget and control the cost of a document review project and could be helpful to some folks. It's sometimes an overwhelming topic, but there's no question that law-related technology tools have advanced in recent years and, when used properly, can drastically reduce the overall data set that is needed to review, code and produce. De-duplication, near dupes, key words, clustering of some type or another and document-ranking technology all can be very effective steps to take. In fact, if you are not using the available technology to reduce the data set needing to be reviewed, it’s practically scandalous.

I've seen more than a few very professional, normally sane in-house counsel practically lose their lunch when they hear about the initial amount of data that must be reviewed on a case. When the word "terabyte" is uttered, or there are three digits in front of "gigabyte," it can be somewhat alarming... that cash register sound starts to go off inside your head. But once everyone has calmed down, reason sets in and the processing stage begins. A majority of that data is going to be culled out. If using an early case assessment (ECA) tool, another huge chunk of data will be eliminated. All told, as much as 95% of the data could be vanquished. Now we have an amount of data we can work with. It can certainly be budgeted, too -- and if the review partner knows what it’s doing, it can be very accurate and for even less money than anticipated.

So technology by itself is not the final answer. Technology combined with knowledge and experience are the keys to understanding the complexities of such projects and bringing back a semblance of simplicity and predictability. Yes technology, used skillfully, can reduce the overall data set and the volume that needs budgeting. But when coupled with skilled, professional reviewers and experienced project management – known quantities that understand the entire collection, processing and review stages, software, and how to measure results and benchmark data – you can better prepare a cost forecast that can be relied upon for the duration of the project and on subsequent matters. I feel confident in stating that any in-house attorney who has worked with a good project manager in particular will gladly share how invaluable that PM has been to his or her department.

So if you aren’t using 1) e-discovery specialist project managers and attorneys and 2) data reduction and/or ECA tools, there are significant savings to be had.

Additionally, in the normal course of business you can also reduce the overall cost of a review project by creating and following a record retention policy, as well as using project management consulting to help with other pre-litigation planning. These measures reduce the overall data set, help you understand where your data is located, and give more certainty and predictability in later creating the review budget.

Data is key in today’s world; technology has made it readily available, but you also need a cohesive approach to tap all of its benefits. It might sound like a tall hill to climb, but there are some very simple steps that can be taken to start the process without causing too much pain. In the end, the cost savings and improved processes that are gained will make all that work worthwhile.

Legal Savings Needed - STAT!

Dennis McKinnie — Mon, 02 Nov 2009 13:26:11 -0500

In early January, I read an interesting piece by Susan Hackett of ACC wherein she laid out a few tips for GC’s on weathering the economic storm. Although things are beginning to look up (for some), lots of questions remain about 2010. Many of our in-house comrades have weathered or are currently going through the budgeting process; the open questions about the upcoming year have made that process almost like shooting at a target in a dark room.

Despite this cloud of uncertainty, it seems there remain a few things that every GC and budgeting lawyer should focus on as we move through the last few months of 2009. During my time as a GC (and admittedly, I’m a list building, check it off, constant evaluator type) I regularly went through some of the exercises below to help determine if our department (and company) was meeting its objectives.

1. In the short view (the next two months), are you going to hit your budget projections? If not, your high-volume, repetitious work could provide the relief you need. There are short-term fixes that can turn into long-term solutions, too … e-discovery, contracts, employment matters, etc. – there are simple measures you can take to generate significant savings quickly.

2. In 2009, there were never-before-felt pressures on legal departments to cut costs, and a response to these pressures was not only expected, it was demanded. Now is a good time to review those measures. What was the impact of cost-cutting on your ability to protect the company from the multitude of risks, known and unknown, that it faces every day?

3. Of the adjustments made during the economic downturn, which are worthy of making a permanent part of your daily practice?

4. Did your department thrive in the current environment or did it just manage to survive? What can you do to enrich the atmosphere during good and bad times?

5. Value has been defined as receiving a solution to a legal problem that addresses that problem for an appropriate cost. Now is the time to conduct a review of the department’s various 2009 initiatives and determine whether value was received for each of those initiatives. If not, there is no better time to fix that problem than budgeting season.

6. Although no one among us likes to think about a layoff once it’s over, now is the time to revisit that event. You have to ask yourself: Was it worth it? Did you really cut costs or did you simply move those costs from one silo to another? If you lost two or three excellent in-house attorneys to a lay-off -- only to replace that expense with an increase in outside counsel fees in order to get the work done -- that reality must be confronted.

7. Did you make appropriate use of outsourcing opportunities? If you are not looking at various ways of using outsourcing (such as contract attorneys), you should.

Of course, these items on this list are just part of the multitude of decisions and thoughts GCs encounter every day, but it really speaks more to the mindset in-house attorneys are moving towards: value. Value is everything in today’s legal landscape, and there are some quantifiable, transparent ways to determine if you’re receiving it.

Do You Like Podcasts?

Lawdable — Wed, 28 Oct 2009 11:25:43 -0500

We're trying to gather some anecdotal information on the popularity of podcasts... internally, people either love 'em or hate 'em, are regular downloaders or seemingly allergic to an mp3 or Real Time player. It's pretty interesting, actually.

This is an very brief and informal survey, but it would be a big help if you could take two minutes to complete the seven questions:

http://bit.ly/2xyssk

Thanks!

Lessons Learned Can Benefit Chinese Drywall Defense

Barry D. Willms — Tue, 27 Oct 2009 10:10:30 -0500

Asbestos then tobacco then pharmaceuticals. Each an extensive and expensive litigation. Now comes Chinese drywall, which could very well be the next tidal wave.

We have already been out in the field working on the Chinese drywall matter and have spoken to several clients that are in the beginning stages of strategic development. If you aren’t familiar, the issue involves the installation of drywall imported from China during the housing boom from 2004 to 2008, as well as after hurricanes Katrina and Rita. During that time, there wasn’t enough supply of U.S.-manufactured drywall to meet demand, so builders were forced to import it. The Chinese drywall in question has proven to be high in sulfur compounds that could potentially cause property damage, emit a “rotten egg” odor and be hazardous to one’s health, although there is undoubtedly much debate to be had about the claims. Initial estimates say that it costs more than $90,000 to rid a residence of the drywall and/or its toxins; as many as 100,000 homes are estimated to contain it (at least partially).

The lawsuit is multi-district litigation; since May 2009, more than 20 defendants have been named in more than 1,000 civil actions filed by homeowners. These are mainly the builders at this time, but everyone from insurance companies to architects to suppliers are likely to be involved at down the road. So this is almost assuredly just the tip of the iceberg, although it’s hard to imagine it being as large as the tobacco litigation.

So what have we learned from past civil actions such as these? I was fortunate (or unfortunate, depending on the day) to work on both the tobacco and pharma litigations, and what we’ve done for our Chinese drywall clients is take a comprehensive view of the past to see what worked, extract best practices, adapt them to the current circumstances, attack the problem and, we anticipate, build some repeatable processes.

One thing I witnessed during both the tobacco and pharma cases was the inefficiency of having dozens of law firms requesting, processing and reviewing the same data; millions upon millions of dollars were likely lost during the process. Constant education of reviewers and outside counsel, no chain of information and consistency were constant concerns. All of this can be easily avoided in the Chinese drywall matter.

Here is a glimpse of the comprehensive planning that’s required as well as a few of our recommendations:

Be proactive. Decide early on to handle the documents head-on and upfront. Don’t wait to start because you think it might go away; it won’t and you’ll only be behind.
Create efficient processes. The proliferation of technology is a true aid versus prior civil matters of similar or larger size, but working with partners who have repeatable, proven protocols is also key.
Budget properly. This is tied closely with #2. With the implementation of repeatable processes, accurate budgeting is a wonderful byproduct.
Collaborate. There is no substitute for collaboration between the discovery team and outside counsel (as well as the client). If it’s not a central component of your planning, then it’s next to impossible to build the processes that are essential in achieving consistency and efficiency.

Streamline, budget, collaborate. These are a few of the hallmarks of successful document management in these large cases. These steps certainly put the client in the best position to handle the many multi-jurisdictional lawsuits.

As I mentioned, we are already working on this matter and will have a lot to report back in the coming months as this issue heats up even more. We anticipate a lot of redundancy and that our discovery team is going to provide efficiency and streamlined processes to each of our clients that face this litigation.

A Valuable Attorney: The Meaning Is Changing

Jane Allen — Tue, 20 Oct 2009 00:08:52 -0500

Last week, I met with a wonderful attorney who has been in-house with one of our clients for several years, doing primarily employment work. She said she was recently offered a position to lead a new business unit that will require putting together processes and managing 30-plus attorneys – a very significant position within the company.

After offering my congratulations and discussing a little more about the position, we left on this note: attorneys who can manage processes and people are going to be vital to our legal profession -- and their company/clients -- moving forward. There are many smart attorneys and there are some who are true specialists in a niche area; but finding attorneys who understand business, who understand the importance of a repeatable process, and who are able to create, modify and manage a process and then bring in the people and manage them as well … is a unique skill set for an attorney. Those with these skills will be immensely valuable as we continue to forge through the changes that we're upon in our profession.

Everyone is being asked to do more with less – from our home life to our professional life. We are in a time that requires all of us to examine our expenditures, what value we are getting for what we spend and whether there are more cost-effective ways to get some, if not all, of our tasks done. This is true in the life of our clients, both law firms and corporate legal departments. Within our company, one question that I encourage people to always ask themselves is, “What can I do that no one else can?” The answers to that question are the real value that you bring the company. If there are things that you are doing that can be done by someone else at a reduction in cost – then let’s look to shift that work to that resource. This is just step one in determining whether you are really getting value for what you are paying. In this economy, everyone selling their services needs to be sure that they are providing that real value.

Susskind: Why Law Firms Have To Change

Candice Reed — Wed, 14 Oct 2009 11:43:17 -0500

Richard Susskind has been one of the more outspoken voices on the economies of the legal profession in recent years, authoring two books on the subject. Today, he has a post on the ABA’s Legal Rebels site that’s an interesting read.

He hits several nails directly on their respective heads, as he has similarly in the past, reiterating that “new methods, systems, and processes will emerge to reduce the cost of undertaking routine legal work” and “new ways of sourcing will emerge … and these will often be combined in the conduct of individual pieces of legal work.”

I don’t disagree with anything that he writes -- and we’ve written about these issues for some time -- but I do think his timeline for these changes to occur is on the ambitious side. Lawyers are typically slow adopters; I’m not sure the types of collaborative communities he outlines have enough time to form and truly share new and best practices that have been vetted and tested, especially on complex matters… even though there’s more communication than ever before among in-house colleagues on well-established communities like Legal OnRamp (and other various organic online connectors of in-house counsel). But his point is that the time is now, not down the road, to understand and address these issues.

Regardless, there’s little doubt the legal world is no longer considered flat and the new frontier is upon us. We know that there are some great ways everyone can work together to contain costs and generate the best possible results. Susskind’s post is a good read if you have a few spare moments today.

Pricing In The Alternative

Barry D. Willms — Tue, 13 Oct 2009 16:25:36 -0500

The “alternative” in an Alternative Fee Arrangement (AFA) can be defined as “affording a choice between two or more things…mutually exclusive so that if one is chosen the other must be rejected.”

In the arena of legal fees, the alternative is compared to the standard billable hour. One potential alternative is a fixed fee. For other AFAs, see this interesting article where Pat Lamb argues that the “real point” should be to “shift risk from the client to the firm,” among other things.

The questions to ask are: what is the goal? What is the incentive and who should have it? Who takes the risk? Who should benefit from taking that risk?

Blended rates and known budgets provide predictability. Is that the real issue for clients? Is the debate between low cost and predictability versus unknown budgetary costs, or does it involve the ability of the legal provider to use reproducible cost-effective services over time for the benefit of the client?

I would argue that these types of arrangements will have a short lifespan. After a certain period of time, all a fixed fee arrangement offers is what the cost is going to be, not how the work can be done more efficiently, for less money, more intuitively, or in a manner in which you can best meet your goals. It also encourages a law firm to use minimal staff or attorneys billing at the lowest hourly rate, which may or may not be in the best interest of a client. The lack of value will be exposed at some point.

The bottom line is to define the goals you are trying to achieve. Is it predictability? Cost savings? Particular expertise? Time reduction? Maximum manpower? All of the above?

This is the point I was attempting to make last week: it’s imperative to think how these arrangements can work for both parties, because if it’s tilted one way or the other, it’s not a great system. Someone loses. And there’s just not a great understanding in the marketplace of how these “alternatives” truly function or if value is really received.

So I like to look at what I know. I know my company’s costs of doing business. I have a pretty good idea how long it takes for attorneys to review a gigabyte of data on most software tools. I know a lot of different ways we can reduce the amount of data to review. I know how we create efficiencies throughout the discovery process. Knowing all of this, I feel very confident we can provide several different pricing options for our clients, whether it’s per document or per gigabyte (the ‘fixed fee’ options, more or less), by the hour, or some other structure. (Although I’m talking about discovery here, the same basic principles apply to different types of work that might see alternative fees, like contracts, employment matters, IP issues, etc.)

If I didn’t really know all of what we know about our business, well … I would be basing everything on a lot of subjective data. That’s simply not necessary in today's marketplace. But because we do have the objective data and we understand our capabilities and costs, the client gets a great work product at a low cost, achieves measurable efficiencies, and ultimately the predictability and consistency that are sought. That’s a win-win arrangement, which is a great goal to shoot for from the beginning.

Alternative Fee Arrangements Need Precise Understanding

Barry D. Willms — Tue, 06 Oct 2009 12:10:49 -0500

There’s little question Alternative Fee Arrangements (AFAs) have gained in popularity in recent years, and that interest seems to only be increasing. In a recent survey of in-house attorneys we conducted in Atlanta, 46% of those who planned to implement new strategies in 2010 said they planned to use AFAs. After all, what in-house department wouldn’t want cost certainty in a time when most are being asked to reduce costs?

However, it’s a difficult matter to pin down and price properly. Today’s post from the 3 Geeks and a Law Blog says it very well: you have to understand what goes into your costs before you can manage or reduce them, and thus create a valuable proposition for both you and your clients. And therein lies the rub.

For many matters, there are way too many variables to be able to create a fixed cost forecast that benefits both you and the client. That’s a terrifying predicament for a law firm to be in and roll out on a pricing platform to a client. But is that really the issue? I agree with the 3 Geeks post: many lawyers just don’t understand how these arrangements can (or do) work, and I’d add there’s a question whether they should even be pursued at all if that’s the starting point of the discussion.

I have previously worked on these types of arrangements prior to joining Counsel On Call, in particular, data mapping and record retention projects– two areas in which we had a pretty good understanding of the time it took to create the work product necessary to implement. And ultimately our clients understood and appreciated the certainty of the fixed cost. But the interesting thing was that when we would initially provide the fixed fee amount, our clients would sometimes balk, shocked at the total amount staring them in the face. But then when we broke it down on an hourly rate basis and they realized they were getting a significant discount, they were all for it. (It would often go like this: Us: “The cost is $75,000 for the work on a flat fee basis.” Client: “That much?!??! Are you kidding?” Us: “OK, tell you what, we’ll do it for $250 per hour and it should take at least 300 hours.” Client: “Great! Let’s do that!”)

So for many, certainty outweighs cost, even though they think it’s the opposite. Many law firms cater to that notion, which allows them an easy way out when trying to determine actual costs and value. It’s pretty simple to estimate how long certain projects will take, and then multiply that number by an hourly rate, provide a small discount and come up with an “alternative” fee; but that’s not really very creative and doesn’t truly solve the cost/value challenges the client is facing. In fact, one can argue that deriving a flat fee from this foundation actually de-incentivizes a law firm; it’s going to get paid that amount no matter the quality of the work or how long it takes to complete. That being said, a strong case can be made that AFAs should be incentive-based as a core feature, and we know several clients who are utilizing those types of models. When everyone has a skin in the game, priorities become a lot more transparent. Value is, at a minimum, more apparent in that model.

At Counsel On Call and especially in my role in the E-Discovery Division, it’s pretty simple: We have to understand all of the costs of a typical project and how to make the work product better and operate more efficiently. If we don’t do that, it’s not going to matter how we package our costs because we wouldn’t be providing value to our clients. You have to take care of the former to be able to create options for the latter.

(I'd also be remiss if I didn't at least mention Patrick J. Lamb at Valorem, who posts often on the subject of AFAs.)

Pilot Program to 'Play Nice' in E-Discovery

Barry D. Willms — Thu, 01 Oct 2009 09:31:52 -0500

As we all know by now, in 2006 the Federal Rules of Civil Procedure were amended to standardize how litigants should deal with their electronically stored information (ESI). Soon thereafter, courts at both the Federal and State levels started putting out their own rules (See Tom Allman's Article and a listing of links to state e-discovery rules.)

In addition to the rules themselves, the various courts are trying to find implementation language and protocols that govern the specifics of what the opposing sides must actually do. One example is the 2007 Administrative Order 174 in the Middle District of Tennessee, which spells out what the judges want to see happen at the meet and confer and during the whole discovery process.

Then in 2008, The Sedona Conference published its Cooperation Proclamation in an attempt to codify the steps that opposing counsel should take on the intricate and expensive matters related to identifying, preserving, collecting, searching, reviewing and producing ESI.

Now the 7th Circuit has taken the next step and announced a Pilot Program to last from October 1, 2009 to May 1, 2010, whereby selected cases will have to follow specific principles of cooperation.

The stated purpose is to assist the courts to, among other things, “promote…the early resolution of disputes regarding the discovery of electronically stored information (“ESI”) without Court intervention.” Basically, the Courts are tired of dealing with the lawyers who don’t play nice on matters of e-discovery.

The proposed standing order contains the following (paraphrased) duties: (1) Attorneys not cooperating will be sanctioned; (2) ESI requests should be proportional to the case; (3) Duty to meet and confer, including discussions on identifying ESI and format of production; (4) Identification of an e-discovery liaison to handle disputes; (5) Creation of appropriate and specific preservation requests; and, interestingly, (6) a friendly reminder that the attorneys should become familiar with ESI prior to filing an appearance in one their courtrooms.

First came ESI and the high cost of e-discovery; then came the rules; now comes cooperation and specific actions to follow … all in an attempt to lower costs, deal with the huge influx of discovery disputes and have lawyers play nice.

The Numbers Don't Lie

Dennis McKinnie — Tue, 29 Sep 2009 16:11:16 -0500

We recently conducted a survey of senior-level in-house women attorneys in Atlanta, with the goal of identifying a few best practices and sharing the information with the group at a luncheon (which was held yesterday). At a minimum, we opined, it would be reassuring for these women to know that their peers are dealing with some of the same issues, and this would be a more formal way to present the proof.

We got a lot more than the minimum. Over three days, 57 women responded, ranging from leaders within Fortune 500 companies to one-attorney departments. The responses provided some very useful information, especially regarding how in-house departments are working with their outside service providers. In fact, 29 of the respondents shared the steps they are taking to manage legal expenses, negotiate flat fee arrangements and take more work in-house. A handful of the survey questions and results are included after the jump.

One nugget that isn’t so uplifting, which we have discussed on this blog in various posts, is that in-house lawyers are still very worried about job security. Thirty-four percent of respondents listed it as one of “three things that keep me up at night,” with the correlated “economy/effect on company’s business” not too far behind (31.3%). Although we have seen that some companies and departments are starting to come out of the thaw, the majority of the in-house lawyers polled simply do not feel secure yet, even as many of them (48.6%) are taking on more work and responsibility.

These lawyers are and will continue to be under tremendous amounts of pressure and the results-driven environment in which they reside is going to have an effect on the way business is done in the legal profession moving forward, there’s little doubt.

A few of the interesting survey responses (more after the jump):

Which of the following best describes your legal department budget for 2010 (choose one):
    28.6% Less than 2009
    37.5% Equal to 2009
    10.7% Greater than 2009
    23.2% Not sure

Do you expect to use any new strategies in 2010 to manage your budget?
    54.5% Yes ... of those responding 'Yes' :
       ->46.1% Alternative/Flat rate / Discounted fee arrangements
       ->34.6% Do more in-house / Cut outside counsel spend
       ->11.5% More contract/outsource help
       -> 7.7% Consolidation of law firms / Use smaller law firms

Share at least one recent success story on how you obtained efficient and affordable outside legal support, specifically your experience with alternative fee arrangements with outside counsel, if any.
    24.1% Flat fee arrangement
    17.2% “Not To Exceed” amount / Caps for each project
    13.8% Negotiated discounted rate
    10.3% Use Counsel On Call / Contract attorneys
      6.9% Issued RFPs
      6.9% Reviewed invoices closely / Identified areas for cost savings
      6.9% Used smaller firms / Smaller offices of large firms with lower rates

What has been your biggest professional challenge in 2009 so far?
    48.6% Doing more with less / Bigger workload
    27.0% Morale / Team management issues
    18.9% Work-life balance / Career
    13.5% Managing business expectations
      5.4% Litigation

What three things keep you up at night?
    34.3% Job security / Salary
    31.3% Economy / Effect on company’s business
    25.0% Litigation-related

Multiple Reasons To Avoid Multi-Tasking

Candice Reed — Wed, 23 Sep 2009 11:11:08 -0500

Last week, I attended a CLE in which three in-house counsel, all serving as General Counsel or managing counsel over a specific division of their respective companies’ legal departments, said that they didn’t believe anyone was capable of multi-tasking. In fact, they each laughed when the topic of multi-tasking came up. As one attorney explained, “Multi-tasking is a concept invented by a law firm attorney so that he can charge multiple clients for the same six-minute increment.”

As a self-proclaimed multi-tasker, I was shocked to hear that rather than praising the “skill” that allowed me to participate in a conference call, respond to e-mails and revise a contract (all at the same time), they were poo-pooing it as nonsense. But as lawyers aren’t we all expected to multi-task? Isn’t that the only way possible to bill 2,400 hours in a given year – and still find time to sleep and eat? I thought that multi-tasking was the sign of an “efficient” lawyer?

However, after listening to this panel of distinguished lawyers (reformed multi-taskers themselves), I understand their point. There was even an article in the New York Times about it recently, although not specific to lawyers. The point is this: when we’re working on multiple matters at one time, all we’re really doing is switching our attention from one matter to the next in a manner of seconds. We’re not actually focusing on multiple matters simultaneously. So does this mean that as lawyers we’re training ourselves to shorten our attention spans – rather than disciplining ourselves to devote the requisite amount of time to the task at hand before moving on to the next one? Are we really being “efficient” by switching in between phone calls and e-mails and contract revisions all within a manner of seconds – or instead are we actually spending more time on each task because we don’t stick with any one task long enough to get it done (and THEN move on)?

I’m not sure why this concept struck me as it did -- I’ve actually been talking to clients about this very premise for years, but I’ve just never phrased it as “multi-tasking.” In practice, the absence of pressure to multi-task for numerous clients is one reason why our attorneys appear to have much higher efficiency rates on e-discovery reviews over law firm associates. Yes, our attorneys have the benefit of experience – most of the lawyers working in our E-Discovery Division review documents for a living and have been doing so for a number of years (much longer than most junior associates at law firms who may only be one or two years out of law school). They are familiar with multiple review platforms and know how to create searches that will expedite review simply because they have done so many reviews over the years. However, in addition to this experience, perhaps their biggest advantage is that when they are on a review they are solely focused on that one matter until it is completed.

Our attorneys are not expected to multi-task; they’re not interrupted by other clients’ phone calls in the middle of reviewing documents; they don’t have looming appeal deadlines or opposing counsel’s briefs to respond to in the middle of a review; they don’t have partners walking into their offices handing them additional work. They come into the office and review documents (on a single matter, for a single client) all day – until they are done. And then they move on to the next matter.

Perhaps we could all learn something from their discipline – and celebrate their lack of multi-tasking. Now please stop reading this blog post on your blackberry and pay attention to the road.