The Ever-Growing Need for an e-Discovery Attorney at the Corporate Level
The key is having the right person in the right place at the right time.
Whenever I talk about e-discovery, most people say: “You mean, doc review, right?” If you are one of those people, you need to keep reading.
Yes, one aspect of e-discovery is document review. And it can be a critical aspect. Just ask Wells Fargo and its outside counsel. They too probably thought that e-discovery simply consisted of document review. And then they proceeded to inadvertently produce private financial information along with social security numbers. See Mill Lane Mgmt. LLC v. Wells Fargo LLC, No. 652025/2017 (N.Y. Sup. Ct. [N.Y. Cnty.]) and Sinderbrand v. Sinderbrand, No. ATL-L-2182-16 (N.J. Super. Ct. [Atlantic Cnty.]).
The first and most basic point is that e-discovery encompasses more than just document review. The second point is that it’s expensive—make that very expensive.
The third point—critical to every client—is that there are ways to manage that cost. The key is having the right people in place at the corporate level–ahead of time—who have a set of standards they can apply to the e-discovery process. When that is done, a company can save money in the long run; safeguard against sanctions and further exposure to liability; and in general mitigate the overall risk that e-discovery can impose on an organization.
Technology is here to help us, so let’s embrace it.
An e-discovery attorney will help a corporation (or any client for that matter) utilize available technology to help the company be nimble and economize. As we will learn below, it pays to know your way around TAR (Technology Assisted Review [e.g., predictive coding and concept clustering with Latent Semantic technology]) and CAR (Computer Assisted Review (which involves searching digital files through the use of key words). And if you don’t think predictive coding has arrived on the scene, think again. It really is here to stay – at least until it is superseded by something even better. See Moore v. Publicis Groupe SA, 287 F.R.D. 182, aff’d 2012 WL 1446534 (SDNY).
However, before we get to use review technology we need to know how to retain and preserve corporate data. An e-discovery expert will maintain and manage retention procedures and data through an established architecture, such as an active archiving system. Utilizing archiving technology allows the corporation to automate the litigation hold process once a claim arises.
In addition, there is another preliminary step: document retention. A document retention policy (DRP) is extremely important to have in place to guard against possible spoliation sanctions. See F.R.Civ.P 37(e).
Another side of this coin is a standing document deletion protocol. Having one of those in place can mitigate suspicion if litigation later arises and an item was destroyed pursuant to a pre-dispute protocol. As one reputable resource notes:
“If documents that are relevant to a lawsuit or government investigation were destroyed by the company before it reasonably anticipated the investigation or lawsuit, having a company-wide document retention policy may help demonstrate to a judge or government agency that the company had a legitimate (and neutral) purpose for the document destruction.”
See “Top 10 Tips for Building a Document Retention Policy,” Association of Corporate Counsel (available at http://www.acc.com/legalresources/publications/topten/building-a-document-retention-policy.cfm).
Other Preliminary Steps
In addition to archiving and document retention policies, the creation of a Data Map is an essential step in understanding what data is out there, how much of it exists, and where it’s located.
The first step involves a question: Does the organization have technology in place to keep track of data, such as Veritas (formerly Clearwell)? Given the fact that corporate data is growing 45% per year (www.veritas.com), this is no idle inquiry.
Whenever possible, a corporation should be archiving its data instead of using backup tapes. Why? Because backup tapes really are antiquated technology. The data on them is extremely costly to restore. See http://www.metrocorpcounsel.com/articles/11650/archiving-e-Discovery-backup-recovery. A corporation simply cannot handle this accelerating data growth without the right people using the right tools.
An e-discovery attorney, working with a company’s IT staff, can manage the process and will be in position to respond to requests at a moment’s notice. Equally important, an e-discovery expert can leverage knowledge of the latest technology in data maintenance to ensure a complete retention and preservation protocol, and to coordinate retention and preservation efforts between IT, vendors, and outside counsel. Indeed, active (and intelligent) archiving will have a meaningful impact on storage capacity. For example, it eliminates duplicative documents–e.g., that “attached spreadsheet” that was circulated to 20 people. Such an item only needs to be saved once instead of 20 times.
Of course, Information Governance is only half the story. Clients—including corporate clients of whatever size—should want to make sure that outside counsel is adhering to best practices when it comes to conducting a thorough and attentive document review.
It’s the e-discovery attorney who will be able to make sure that happens.
Early Case Assessment
Corporations need to ask themselves if they have an e-discovery professional advocating on their behalf.
Although outside counsel may be the company’s overall advocate in a lawsuit, the entity needs to be its own advocate during discovery. In that regard, there are crucial issues. Does the corporation have a point of contact to coordinate with both vendors and outside counsel regarding all document review issues that arise? Are there key personnel in place?
These inquiries should focus on one critical item: Is there an e-discovery attorney onboard who will conduct effective early case assessment and substantive analysis of the relevant data?
An in house e-discovery attorney can conduct early assessment, and that step can save money. A client can reap major cost savings by taking this approach. Instead of having outside counsel come in at $600+ an hour with a forensics vendor at $300 an hour to sift through a sample set of documents, a trained and experienced e-discovery attorney can work much more efficiently supervising the first pass and then focusing in as the case warrants.
An e-discovery attorney can have the potentially relevant data identified and with the use of computer assisted review technology (CAR) or technology assisted review (TAR) can go through the data to identify relevant documents and custodians quickly and efficiently. I can relate from experience that, for many clients, the concept of “early case assessment” entails preparation of an Organization Chart before outside counsel arrives. This sort of deference to outside counsel can get very expensive, very quickly.
Now I know what you’re thinking: what if there is too much data to review? How is this one person—even if blessed with magical powers—going to get through it all?
I am not advocating that outside counsel is unnecessary. What I am advocating is that that the time outside counsel spends figuring out who the key players are, where their documents are located, what information is contained in those documents, and how much of it is relevant and unprivileged, can be decreased by having a full time e-discovery attorney employed by the corporation already in possession of the information by the time outside counsel arrives on the scene.
That is what is meant by true “early case assessment.” The e-discovery attorney will have a Data Map as well as a dynamic list of employees which will include what they are working on, identification of devices they are using, location of data (local server, outside vendor, home computer), and how much data there is. The e-discovery attorney can run search terms against a sample set of data to determine relevance.
The goal here is not to displace outside counsel but to be proactive; helpful to the cause; minimize the risk of mistakes; and at the same time reduce costs.
The e-discovery attorney will work with corporate IT to generate a key person list to implement a strategic litigation readiness plan. Litigation is an ever-present possibility in our society. A dedicated e-discovery expert will have a plan and the necessary information at their fingertips before a claim arises and before outside counsel walks through the door.
Once litigation commences the corporate litigation readiness plan implemented by the e-discovery attorney will enable outside counsel to focus their efforts on key personnel and data gathering from sources already identified instead of having to play catch-up. The e-discovery attorney will have the information outside counsel needs to cull the relevant data in far less time. Moreover, the e-discovery attorney, along with outside counsel, can assess the data to determine which potential custodians should be actual custodians.
A corporation may well ask: if I have Information Governance technology and IT in place, why would I need an e-discovery attorney?
The answer is simple: software that helps manage data is not enough. A dedicated full-time e-discovery professional will enable the corporation to be better equipped in responding to lawsuits by using the technology to analyze the available data. Only an attorney with subject matter knowledge can do that. IT cannot do it—unless the IT staff includes an experienced attorney with e-discovery expertise. An e-discovery attorney who connects the legal team with IT and record management will enable data to be located quicker, which will inevitably reduce cost and risk.
Competent outside counsel probably does not need help in conducting discovery—after all, this is why they were hired in the first place. However, it’s never a bad idea to know the law firm’s approach to document review as well as have corporate standards in place in case the firm’s protocol deviates greatly from the company’s standards. For instance, does the law firm plan to do dummy privilege review on the first pass? It would be more cost effective to review for as many decisions on the first pass as possible (i.e., responsiveness, confidentiality, redactions for personally identifiable information, and privilege).
Discovery experience teaches that a set of standards will mitigate risk during a document production. For example, does the corporation have a privilege review protocol? At my old firm one of our clients had a very detailed review protocol that all outside counsel had to learn and implement. The client had countless productions throughout the years and from those encounters devised a set of best practices guidelines that they required outside counsel to use.
Most companies, however, do not do that. Instead, corporate executives defer to their General Counsel. General Counsel defers to outside counsel. And the only real oversight is review of the legal bills
Corporations can, and should, do better. Money is hard to come by and wasting it is irresponsible. It has not happened yet, but a shareholder derivative action for wasting corporate funds on legal fees that could have been avoided may someday happen.
Protecting privileged documents is a key part of e-discovery work. It’s really a key part of any legal work. When organizing the review steps for digital documents, I advocate mass coding all documents in the review universe with a privilege hit with a “Potentially Privileged” tag. In addition I recommend having all responsive documents be reviewed for privilege. Although this is a sound approach—and sounds very basic—I can’t tell you how many times the privilege call has been missed by inattentive team members.
One prophylactic practice is to run a search for the missing “Privileged” tag at the end of every day. An additional safeguard should be running a search for all responsive documents with a privilege hit that were not marked “Privileged” or are missing the privilege designation.
Privilege Quality Control, (QC) is a mandatory step prior to production. A QC tag should be created in the review tool to indicate that documents were checked for privilege by outside counsel or an experienced privilege reviewer. No document should be produced unless it has been checked for privilege by qualified privilege reviewer—preferably a member of the outside counsel group and marked with the “Attorney Privilege QC” tag.
Of course, there is no guarantee against a wrong call. The point here is to minimize risk. If, during the QC process, a document is designated Not Privileged and there is no other review of that document, it will be produced. To protect against improper disclosure, if there is the slightest question, err on the safe side of marking the document privileged. By doing so, you will minimize the risk of privilege waiver under Federal Rule of Evidence 502(d).
Documents should have both a “Needs Redaction (privacy or privilege)” tag as well as a “Redaction Complete” tag. A search should be run across all responsive documents with a redaction complete tag to make sure that the redaction has been made.
Excel and Power Point Review
Excel spreadsheets and Power Point presentations should be reviewed in NATIVE format. Hidden fields, truncated text, and PPT notes cannot be seen in the HTML Rendering “viewer” mode in the Relativity review software. Relativity is one of several computer programs (or rather, platforms) that assists in the review of documents. Document images along with the corresponding metadata are loaded onto the platform, indexed to be searchable and can then be reviewed, converted to TIFF format for redactions, and coded with the appropriate tag.
For this reason, native review is preferred; it will enable the reviewer to see all these “hidden” items. Moreover, prior to the commencement of the review, Excel training should be conducted so the reviewing team understands how it works and what its many features are. Technological competence should be a prerequisite in e-discovery.
Wells Fargo’s Problem
The recent Wells Fargo fiasco mentioned at the outset illustrates the point perfectly. Wells deferred to their outside counsel who do not appear to have untitled best practices—or any practices from what it looks like. They either failed to review Excel documents in native format or missed data while reviewing in native.
Because the data was not identified a confidential designation was never applied, which to my eye is a clear indication that the outside law firm did not follow or understand the standards and procedures for protecting privileged and/or confidential materials.
An e-discovery attorney could have averted the Wells Fargo disaster. The e-discovery attorney could have overseen outside counsel’s efforts with respect to document review and production. This would have ensured that defensible standards were followed. But to conduct oversight, one needs to have an overseer in place.
Throughout my many years supervising document productions, I have learned one thing: quality control is essential. The steps outlined in this article are the tip of the iceberg, but they provide a good foundation to getting things right.
An expert who understands the Discovery process from outside counsel’s perspective will be able to prevent costs from spiraling out of control. In most cases, the single biggest Discovery expense is the document review. Some firms charge in excess of $100 per contract attorney per hour. The contract attorney, however, only gets paid $30 – $35 per hour. The rest of the money goes to the attorney staffing agency and/or outside counsel. This is an enormous expense for the client to bear.
An e-discovery attorney can engage the staffing agency directly and that step should save money (think: no middleman). Indeed, negotiating directly with the staffing agency that supplies “doc review” attorneys may be the smartest move any corporation can make. Depending on the duration of the project, this one maneuver can save hundreds of thousands of dollars.
One thing a corporation should do when researching which outside counsel to retain is have the e-discovery attorney ask if the firm has an e-discovery department, with discovery lawyers to oversee the review and production. Several firms have e-discovery Staff Attorneys, dedicated specialists to supervising document reviews and productions. The benefit to this is that it’s less expensive. The firm’s Staff Attorney is billed out at much less per hour, anywhere from $100 to $200 less per hour than the associate or counsel. That will add up on a review that requires supervision, and quality control.
I can tell you from experience that one or two Staff Attorneys can bill 10 hours a day each on a project. A $300/hour Staff Attorney is far more attractive than a $400/hour associate or $500/hour counsel. And what could be better than getting a dedicated expert for less.
If the corporation does defer to outside counsel to identify the relevant electronically stored information (ESI) the corporation must inquire about what analytics the outside counsel is using to cull the data. The most basic way to reduce the universe of ESI before review is with key word searches, de-duplication, data range specification, and limiting the number of custodians. However, there are not true TAR techniques. Predictive coding, and Latent Semantic Technology for concept clustering should also be utilized if the corporation is willing to spend. These latest technologies will reduce the universe of documents considerably and ultimately, wind up saving money. Document review is the most expensive part of discovery and if the corporation is not going to implement the latest technology their outside counsel should. These are the things that every corporation should be asking.
Corporations are fragmented institutions. For the purposes of litigation readiness, a single point person, (maybe two) will achieve a more centralized approach to the Discovery process that will save time, reduce risk, and more importantly, curtail the ever-escalating cost of litigation.
There is an old saying that cases are won in preparation, and in today’s environment, preparation really means Discovery.
While an organization may not be able to predict the future, it can prepare for the risks and pitfalls of document review in major litigation.
Alex Stemkovsky is an attorney in Los Angeles who specializes in e-discovery.