…the complexity of your specific types of litigation and the size of your data universe will affect how realistic it is to complete ediscovery in house.
In-House or Out: Comparing Considerations
Costs and Flexibility of Spending
A primary concern for most legal departments is controlling spend. On the whole, keeping ediscovery in-house can reduce the costs of ediscovery while keeping those costs more transparent. This is largely due to recent technological improvements: now that the majority of software services are cloud-based, infrastructure costs are no longer a factor. Software is also steadily decreasing in cost even as it increases in capability. When assessing ediscovery costs, be sure to factor in the expense for training and retaining at least one full-time, dedicated ediscovery employee. This cost is not unique to in-house ediscovery. Even if you outsource, you must have someone on staff who can diligently monitor the work of your vendors or law firms to ensure that it remains cost-effective and reasonable. Note that the costs of ediscovery are subject to considerable ongoing efficiencies, at least for corporations that have a steady stream of litigation. When you keep ediscovery — particularly preservation and collection — in-house, it allows you to make the most of your ediscovery efforts, gaining efficiency and improving responses based on previous searches and cataloging of data. Be mindful that if you outsource ediscovery to a law firm, you may encounter a conflict in future litigation that will obviate this institutional knowledge. Speaking of conflicts, in-house ESI collection and processing also avoids the potential inherent conflict of interest that a law firm may have if it conducts discovery while representing the company on the merits of an action. And with the increase in privacy regulations, such as the European Union’s General Data Protection Regulation, sharing information with third parties introduces a whole new level of complexity — while leaving your company liable for any breaches caused by vendors or outside firms.
Work Quality and Assurances
As a general rule, your employees know better than a law firm what information may tie in to a discoverable matter and what to look for from your opponent’s ediscovery. Your own staff may well be able to create a better work product than outside counsel, provided you have the right leadership, training and guidance. However, there are two important situations that favor outsourcing ediscovery to a qualified vendor or law firm. First, if a custodian has a colorable motive to spoliate discoverable information, it may be prudent to avoid having that custodian engage in self-collection. Any expense saved by in-house ediscovery can be quickly offset if extensive motions are required to refute an allegation of willful destruction of evidence. Second, if your company is not comfortable assuming all the risk in an ediscovery matter, or if it does not have the budget or the ability to dedicate a team to ediscovery, thoughtful outsourcing can be a good way to minimize and distribute that risk
Data Control and Security
With the pace of high-profile cyber attacks in 2017, data security remains a major concern for businesses. If you have a trustworthy enterprise security system, keeping ediscovery in-house can minimize the potential exposure of that data. Even where a specialized ediscovery vendor or law firm has layers of security that outperform yours, be mindful of how many transfers of data between sites or storage locations — from your custodians to an external firm, within that external firm’s teams and thereafter — will occur when assessing whether data control or security should weigh against in-house ediscovery.
Speed and size
Depending on your data volume and the ediscovery steps you are considering moving on-site, the speed with which you can collect or process data may not keep pace with that of a specialized ediscovery vendor. If a matter is time-sensitive, or too big for your in-house processes to efficiently handle, you may need to outsource it. Consider researching and retaining an overflow vendor for rush jobs, should it become necessary. Also evaluate how often you are engaged in litigation, how complex that litigation is and how quickly you need to respond. After all, the faster a case is resolved, the less it should cost.
Making the Decision
How should you balance these factors? If you’ve decided to switch more of your process in-house, how do you start? Focus first on smaller cases that have a discrete, limited data set and on a single step in the ediscovery process. If all goes well, you can expand gradually to greater data sets and more stages of the process. Of course, a given case may turn out to be more complicated than initially expected, causing your ediscovery needs to rapidly outstrip your abilities — making an on-call overflow vendor a good idea! Consider, for each case, the amount and complexity of the data you will need to process, the importance of intact metadata and the custodians’ potential stake in the litigation. In high-risk cases, you may choose to retain an external consultant to supervise document collection and preservation to guard against accusations of willful spoliation. Ensure that any software you purchase is intuitive and user-friendly. For in-house data preservation, collection and processing, you need tools that your data custodians themselves can use, with supervision from your ediscovery project manager and your IT department. Finally, while your choice to manage more of ediscovery in-house may be financially motivated, do not skimp on staffing. Your legal department must — no matter where ediscovery is actually performed — ensure that your processes are reasonable and defensible. As you evaluate your current methods and assess potential changes, keep one eye on the roles you must fill and the staff you will need to ensure optimal ediscovery processes. Use visual process maps to outline roles so that you understand who’s doing what, whether in-house or externally, where bottlenecks and inefficiencies exist and who may need more training, support or experience. Whether your project manager is monitoring custodian self-collection through interviews and search assistance or verifying that external vendors and law firms are wisely using resources, you need at least one employee whose job is solely ediscovery compliance. Your data project manager must understand how data works, where it is located and how it can be preserved, accessed and collected to comply with your discovery demands. That employee will also need ongoing education, as technology changes constantly.
Use the start of 2018 to re-evaluate your ediscovery workflow. Does it make sense — considering costs, quality of results, data security and speed — to move more of your ediscovery in-house or to outsource it? Either way, are you dedicating enough of your budget and your employees’ time to thoughtfully managing your ediscovery processes and staying up to date on new developments? If it’s time to make a move, assess where you should begin your transition and identify a few straightforward cases where you can test your new approach. In a world where technological development shows no signs of slowing its exponential growth, expect that ediscovery solutions will also continue to grow and change. Indeed, you may find that the best solution for you doesn’t exist yet — but you can be sure it’s coming.
Corporate vs. Law Firm Takeaways
- Lower costs that are more transparent and manageable
- Institutional knowledge that can be developed free from conflicts
- More in-depth knowledge of work and evidence relevant to potential litigation
- Potential motive to spoliate evidence, so protect data with a third-party collection and preservation supervisor as needed
- Data security that is as good as your enterprise system and that avoids the risk of external data transfers
- Potentially slower or less efficient data collection and processing than that offered by a dedicated ediscovery service provider
External Law Firm Ediscovery
- Costs may be higher and less predictable
- Current or future conflicts may occur
- Risks of ediscovery can be distributed with a qualified, experienced vendor or firm
- Data security may be greater but also subject to transfers to and from company
- Faster results, if you have extensive amounts of complex data or if time is of the essence