Harried, But With Purpose

Follow Barry on Twitter

Harried. That’s the usual descriptive word for the week prior to the start of a discovery project (especially when it's been a week like this one: several new projects beginning while preparing to head to LegalTech NY next week). Assembling and familiarizing team members; developing and fine-tuning QC protocols; hour-by-hour updates from technology partners; constant discussion with outside counsel; making sure the client is getting concise and relevant information. Effectively relaying all the information to the people who need it. Logistics, logistics, logistics.

These challenges, as you might have noticed, are solved through collaboration, communication and coordination. It is the groundwork needed to achieve a successful and budget-conscious review project. The maestro of this orchestra is the project manager. It is his or her responsibility to have a plan in place, implement it, tweak it as necessary, manage the issues and move the process forward.

Much of a project manager’s time and expertise is best put to use in transitioning the project from a harried environment to one of streamlined communication and coordination. This includes accurate budgets and every member of the team knowing his or her role in the process. “A” comes before “B,” etc. Initially, ramp-up might be full of changes and the desired decision rates targets might not be met; the good PM will have a plan that accounts for the unexpected, avoid overreaction, correct what needs correction and get everyone and everything running at optimal levels.

Some may call it organized madness, but every review truly is one large learning process. It just has to be built into the process – knowing when and where the team could experience difficulties and being able to adjust on the fly. It is as critical as assembling the right team leadership and team members. It includes training on the substance of the matter and on any new software or technology that might be put into use during the review and preparing the materials that are needed for an efficient start and completion of the project. Again, each of these measures takes thoughtful collaboration and communication in order to maximize results down the road.

In the end, it all comes together to increase efficiency and effectiveness, save the client money and get the job done right and on time. Just know that the duck that appeared calm on the surface likely had its feet paddling like mad underneath to make it happen.
 

DS2.0 Panel Recap: Working With Outside Counsel and Gaining Control

It what was undoubtedly one of the most anticipated discussions of Discovery Symposium 2.0, Sue Dyer (HCA), Jan Mendel (AT&T Mobility) and Carlos Provencio (Morgan Keegan) served as panelists and led a lively discussion that detailed approaches to working with outside counsel in the discovery process. Anne Whitaker moderated.

Main Takeaways:

  • Set a line in the sand with outside counsel; Say, “This is how we’re doing it”
  • Building a “virtual law firm” controls outside counsel spending
  • Regional law firms and a collaborative model result in great value
  • It is important to set parameters on the front end
  • Law firms “will not change until we make them change”

Sue Dyer began the session by discussing the “virtual law firm” model, which includes the use of regional law firms and a HCA-dedicated team of Counsel On Call attorneys for discovery. Not only has this approach reduced costs, but it has made the discovery process more straightforward and efficient and eliminated the dependence on one law firm’s process versus another. HCA brings that consistency to each matter, wherever the matter takes place.

The panel and audience also discussed that as far as law firms are concerned, “not much has changed.” Some who came from the law firm background empathized with the law firm argument regarding the use of less expensive attorneys, specifically that “they sign the pleadings” and their work is attached to it. The counter to this, according to Carlos, is that it’s a matter of assigning value to types of work, and he sees the law firm in a more strategic role in litigation. He will pay law firms “for inspiration, not perspiration.” Audience members and panelists agreed saying that “law firms will not change until we make them change” and going as far to say that value pricing should be “part of their corporate responsibility.”

Panelists also discussed e-discovery and its addition to their workload, as well as to the budget difficulties they once experienced. While it was somewhat frustrating, panelists agreed that it has been more disappointing that law firms simply “do not get the team approach.” The turf battles and desire to handle everything on a case only impedes what in-house departments are trying to do. For Jan, this has given her the opportunity to be more creative with her budgeting and thought process, and she has seen dividends already and expects more in the coming months.

The cost of legal services was also discussed at length. Several attendees said they will not pay more than $500 an hour in attorney fees. The suggestion that law firms will continue charging high prices as long as “Corporate America” allows it created a lively discussion with the audience. One participant said she believes it is “offensive” to pay someone $900 to $1,000 an hour and will not approve partner hourly rate increases; she will, however, approve some associate increases (once she gets to know the associate’s work product). Since many big firms are not making changes to their hourly rate approach or insist on rate increases, many companies have utilized a virtual/regional firm network, which is much more in line with hourly rates under $300 per hour.

One audience member said she believes the root of the problem is costly law schools and student loan agencies. Because law school loans are due so soon after graduation, lawyers feel compelled to charge an unusually high hourly rate to pay back loans right away. Another audience member then said he believes the problem is law firms competing for higher profits, that it’s not the law school but the “economic model of the law firm.” He cited the cost of a paralegal at one firm of being more than $300 per hour, which indicated a complete lack of understanding regarding value. He also discussed two of his law firms’ stated goal to be on the “top profit per partner list,” which he said they achieved… but his company no longer works with those firms because of it. He said his company’s goal is to never pay more than $300 for an attorney (they are at the $500 cap currently).

The issue of how to tell a law firm “this is how we’re going to do it” was then discussed. While it can be a difficult conversation, all who spoke agreed that it’s important to set a hard line in the sand. Many stated that it’s become clear that whether or not law firms do realign their business model, there’s a better way to handle litigation and discovery anyway. One panelist noted that she doesn’t know if law firms are ever going to “get it,” but that they haven’t waited around for their firms to do so.

The importance of setting parameters on the front end of a working relationship was also discussed. Several participants stated their desire to get better in this area; clearly defining roles and who will handle what work are important issues to address that aren’t always black and white. Including law firms in the decision-making process regarding the distribution of work and budgeting was one approach highlighted; giving firms the opportunity to match prices for discovery work has been utilized by some, but no firms have “met that offer.” Within that context of collaboration, Carlos discussed Morgan Keegan’s approach in using similar-size regional law firms and how, much like Sue and HCA, Morgan Keegan is already seeing benefits. The firms work well with one another and his Counsel On Call team; when a matter arises that a firm needs assistance with, another firm in his network will step up “seamlessly.”
 

Lather... Rinse... Repeat

I’m sure we’ve all felt like we’re stuck in this cycle at some point. It’s very easy to fall into patterns and ruts, especially with endless piles of work or when something has typically been handled a certain way.

The surface of the earth is soft and impressible by the feet of men; and so with the paths which the mind travels. How worn and dusty, then, must be the highways of the world, how deep the ruts of tradition and conformity!               

- Henry David Thoreau, Walden

 

If we’ve learned anything the last two years, it’s that taking a different look at the delivery of legal services is, at a minimum, a healthy exercise. Don’t get me wrong, I don’t think corporate legal departments used to search for ways to spend more money or work less efficiently. I don’t believe law firms weren’t trying to provide value to their clients prior to 2008. But it’s not a stretch to say that those issues were once lost in the “lather rinse repeat” world of legal services up until the bottom dropped out of the economy.

Now the focus on these issues is apparent, and many in-house departments and law firms have taken dramatic steps in recent months to retool their operations or install cost-containment measures. But what does it really mean? Does saving $2 million a year in legal expenses signal escape from the rut? Does reorganizing who handles a client’s work mean that a new approach has been adopted? These very well may be very positive steps, but real change has more to it – and the benefits could be tenfold.

Think for a moment about a typical EEOC matter, due diligence need or a stack of marketing contracts that must be renegotiated. If the average in-house department is already short-staffed (and swamped), where is the first call going? Outside counsel. Maybe there are good protocols in place for these issues – the associate receives the message and tries to get to these matters as quickly as he or she can, balancing it with the needs of several other clients. Even if an alternative or flat fee has been arranged for this type of work (ahhh – change!), it is still reliant upon a ‘lather rinse repeat’ way of doing things: Work comes in. Outside counsel contacted. Work handled. Invoice sent. Gratitude that the bill was as expected. There is value in known quantities, after all.

What I would say is that there are different ways to handle this work on both sides of the table. We’ve posted here about the Tripartite Model (or “three-legged stool”) model before – basically installing a new model for some of this mid-level work to client-dedicated (Counsel On Call) attorneys who collaborate with both in-house and external counsel. This allows outside counsel to focus on bigger issues and staff work in a more effective way; in-house counsel utilizes attorneys dedicated to their matters who are available as-needed. It’s flexible, fluid and responsive, and allocates resources efficiently and appropriately. It also saves money for both parties.

But let’s take it a step further and focus on value and improvement (not just process). Tracking, reporting and evaluation are cornerstones in everything, not just in e-discovery. What does the client truly get from our services? How can we better handle this work? How can we reduce the costs? What did we learn? How can we use what we’ve learned to make the work product better? Who needs to be plugged into this and at what point? What work is being duplicated by others or requires similar functions? How much time do these matters truly take? What work has been rejected by legal because of a lack of resources to handle it (but legal would really like to handle it)?

If these questions and others are being asked with your different types of work, your “legal pattern” likely has a more beautiful hue to it these days. There must be a broader perspective, even in the most “rut-like” activities.
 

The Spotlight Shines on Project Management

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.
 

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

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.

Alternative Fee Arrangements Need Precise Understanding

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.) 
 

A Lawsuit Delayed Is A Dollar Saved

I know that's a really bad take-off on a common expression, but it can be used to describe the prevailing attitude in legal departments toward filing suit against another company -- or even defending against a suit brought against your company. More accurately, the mindset is, “a lawsuit avoided is many, many dollars saved,” and those savings can directly effect the bottom line.

In past downturns, the Bar has been able to take some solace in the loss of transactional work knowing that the litigators would soon have more than enough cases to carry the load. Everyone expected that to be the case this time around as well. The common thought was that corporate work goes down, litigation goes up. But this recession is not like any other in so many respects, so why should it follow that course?

Since the beginning of this year, I’ve taken note of the lack of an appreciable increase in litigation. Companies are not willing to make the huge investment that even the smallest case requires; big cases can quickly become a massive drain on resources. Has the recession created an incentive to avoid these cash sponges? I believe it’s coincidental for a lot of legal departments.

Monday’s National Law Journal contains an interesting and well-written article by Karen Sloan. In it, she notes that there seems to be a dramatic shift in how corporate America is thinking about litigation as a result of the recession. Ms. Sloan shares my humble opinion that you cannot blame this change in attitude totally on the recession and cites other logical reasons why there has been a shift. There are many, many factors that lie outside of the current economic climate which have, through the course of time, changed the mindset of our corporate colleagues. The reality is that it’s just too darn expensive to enter into a courtroom battle where there are other options for dealing with the problem that are infinitely more cost-effective and efficient.

For years now we have been working with corporate clients on how best to tackle some of the more costly aspects of litigation in the most cost-effective and efficient manner. That being said, there’s little question that most changes or strategic shifts regarding litigation policies are reactive; there is usually something on the front end that demands a change. After all, in our profession the tried-and-true path gets worn bare unless a giant boulder is thrown across it. The recession certainly has provided the needed incentive for many to produce a new course of action.

But for many of our clients, that boulder was placed in front of them long ago, during better economic times, whether it was with rising outside counsel costs, new company standards or policies, or simply an early recognition that e-discovery was going to become more difficult to deal with in the future. So they started looking working with regional law firms instead of the AmLaw 100, or enacted procedures when dealing with specific types of litigation, or they expanded their in-house litigation teams and created strict e-discovery and data storing policies. Collectively, these changes meant there was a new approach to litigation, how and when to respond, and how to manage it. These clients were the early adopters of this shift and forged the path for others to follow. Once the recession set in, the shift accelerated somewhat uniformly throughout the profession.

Sure, we haven’t had a surge in lawsuits like has happened in other challenging economic times. There are many positives to this fact, though. The practices that have been developed during the good times are playing a role in decisions whether or not to sue (or to enact procedures when one is sued). They are certainly playing a big role in how to conduct a piece of litigation.
 

An E-Discovery Event With Substance

We're not in the habit of event promotion, especially with the sheer number of e-discovery-related conferences in the marketplace, but one in particular has us excited. If you're looking for good, substantive programming and a great line-up of speakers, consider:

ACI’s 7th Annual Advanced Forum on E-Discovery & Document Management

We don't have a dog in the hunt, so to speak, but know and respect many of the panelists involved. Collectively, the in-house counsel on these panels have experienced most, if not all, conceivable challenges related to e-discovery and have developed and/or overseen many efficient and cost-saving solutions. 

If you're weighing different conference options -- and your 2010 legal budget-planning process is fast-approaching or will be in-progress -- it would be hard to go wrong with this event. And if you're planning to attend, drop us an e-mail so we can introduce ourselves while on the same plot of South Broad Street space.

The Forum is Sept. 22-23 in Philadelphia.  

Is 'Project Manager' The Next Big Legal Job Title?

Once upon a time, there were really only a handful of titles in the legal profession: Associate, Partner, Paralegal; General Counsel, Associate General Counsel; or simply Attorney. Sure, there were mini-steps between these positions and other classifications, but for the most part these titles offered a good snapshot of the profession – especially the way business was done. Everything that couldn’t be handled in-house was sent to the law firm. There were no Account Executives, no Client Liaisons, no Information Systems Administrators ... no other business partners to lean on.

The rise of e-discovery ended that several years ago. With the entrance of the IT and consultancy worlds, and the development of in-house IT departments, titles like Data Analyst and Systems Manager became commonplace. But the title that has seemingly had the biggest impact – at least from outside the walls of an in-house department – could very well be Project Manager, especially from the collection through production phases of the EDRM.

Practically every vendor touching the world of e-discovery has this position. If you don’t have it, or refer to it another way, you might get funny looks (We once did. “So is a Team Leader really a Project Manager? Or does someone oversee the Team Leader? Who is the PM?” Good point. Why make it more confusing than it has to be?). In our line of work, the PM can consult on the technology tools to use, develop the budget of an entire discovery matter, and handle the assembly and work of the review team, among dozens of other issues. These vital roles raise the question: Does this position merit a place, or a more prominent place, within the legal education system? Or will that just mess it up?

Like most things in our profession, top-notch e-discovery project management typically only comes with experience. A good PM has battled through the tough assignments, been able to troubleshoot while under intense deadlines or emergencies, managed matters large and small and understands the different approach each requires, and has the innate ability to become Zen master amidst the myriad roles and personalities at work on a typical discovery matter (between the technology vendors, law firm associates and partners, in-house team and it’s IT department, and the review team), among a million other issues. So it’s difficult to imagine this being taught well in academia. I won’t go into the teaching of practical applications in law school, which is another reason this will never happen.

Additionally, it’s not entirely clear how good lawyers are, as a profession, at project management. I feel like I can make this statement as a lawyer myself. The budget is often front and center of a project, whether it requires staying within it or forecasting. This has never been a strong suit within our profession. Project management also requires the ability to manage teams, work directly with vendors and other partners, and have an understanding of the substance of the case; that’s several jobs rolled into one. By nature lawyers can be good at each of these functions, but collectively it becomes more problematic.

That being said, the project manager is undoubtedly a role that is here to stay and it merits an established, accredited training ground within the profession – something beyond being certified as an e-discovery professional. Many of these training programs happen internally and organically (we do this). But outside of that, a publicly available service might need to be taught by IT professionals or consultants – someone not a lawyer by trade. E-discovery service providers might be able to step in as educators. Or maybe there is a different tract that needs creation: equal parts legal education and on-site, real-world apprenticeship. (Since summer programs are falling by the wayside, maybe this is a real alternative for law schools? Doubtful.) Or maybe there are enough lawyers already searching for new roles in the profession who could fill the need for great e-discovery project managers. Surely it’s only a matter of time before it becomes a more prominent and respected position at law firms.

One thing we hear loud and clear from potential in-house clients is that they understand the essential role a project manager plays in helping to achieve their cost savings and coordination goals. A good project manager is like gold, and I’d like to recognize Richard Stout and his team of PMs at Counsel On Call for consistently being recognized by clients for their outstanding work (Richard truly is the gold standard in the discovery/review world).

But when there’s a rush for gold, the legal profession typically is already waiting to be able to sell its supply … in this case, it doesn’t seem to match the demand – yet. I would love to get some thoughts on the subject.
 

Two Words For E-Discovery Savings: Less and Faster

There’s a very good post on Clearwell's e-discovery 2.0 blog, "How To Reduce Electronic Discovery Costs," that breaks out the discovery process into sections of potential cost savings. It’s a good overview and it’s evidently the first part of a series.

The post reinforces a few of the issues we’ve discussed here, mainly that to reduce discovery costs, you should focus on trying to review less data and review that data faster. There are a couple of recent examples I’d like to share that show just how much money can be saved in implementing this approach.

First, a client called with what seemed like a good-sized matter – more than 70 gigabytes of collected ESI that needed to be reviewed and produced on a tight deadline. The reality was that the data had not yet been processed, culled, or de-duped; so we immediately knew that there were opportunities to dramatically reduce the amount of data to review. The combination of the right technology (coincidentally, it was Clearwell’s early case assessment tool), the right hosting company and good project management paid off on that case. The original 70 GB was reduced to less than 5 GBs of data that required review – a 93% reduction. Our team of attorneys was able to complete the review of this data within days versus weeks and the law firm was able to meet its production deadlines at a fraction of the cost of traditional methods. Success stories such as these are very common when it comes to reducing data.

The other example is a client whose discovery we’ve handled for the last 12 months. We have project managers and several attorneys dedicated to their matters, and what we’ve seen is that with each matter that comes in the door, the process has become increasingly efficient. Because the review and quality control workflow had already been mapped out, and because the team was already familiar with the client’s data, and the project manager had established relationships with the company’s internal IT contact as well as the company’s preferred review software vendor, those usual start-up measures and learning curves are consistently avoided. The result has been a repeatable process, a shortened timeframe to begin the review and higher review rates once the review begins; in fact, review rates on the first matter were more than double what the company was accustomed to and have increased an additional 50% from the first matter to the most recent. The best result was that the client saved more than $1.5M during this handful of matters.

These examples show that if you have the right processes in place, the knowledge and expertise of the right technology, and the relationships with superior hosting companies and vendors, you can save the time and expense of reinventing wheel for every matter.
 

Leadership on a Matter -- It Matters

The main subject matter of this blog is to discuss best practices or recognize innovative happenings in the legal profession; despite our best efforts, it’s sometimes difficult to stop for a second to write about something or want to write about it when it seems promotional of our company. I considered this yesterday as I was reviewing the status of an interesting new assignment we’re working on, and there are a couple of items I felt were worth discussion here. So here we go ...

Just last week, a team of approximately 20 Counsel On Call attorneys and paralegals -- working remotely from five different cities across the country -- began a project in which they are assisting a corporate client by reviewing and updating all of its vendor contracts before the end of the fiscal year. Each is a great attorney with significant contracts experience in the client's industry (I think the average is around seven years of experience), but what is especially noteworthy about this matter is that several boundaries have been knocked down. It truly is about good lawyers wanting to work with good lawyers, trusting a process and not necessarily taking the road most traveled. The focus is on communication, not location; the qualifications of the attorneys, not the name of the place where they work; and the track record of the leadership and management of the team, not just the bullet points on a resume. This results in the client's ability to get the work done efficiently, access a much larger talent pool and keep a tight hold on costs.

Specifically to the latter point – and we have certainly learned a lot from our work in the world of e-discovery in this regard – good project management and team leadership are essential. Anytime there are this many people on a team, multiple work sites, and tight deadlines, it is imperative to have a strategy in place and implement it. That sounds easy, but I think anyone who has been involved in team-based assignments understands that it takes a great project manager and/or team leader to pull this off. There are always changes; there is always troubleshooting; it is never a completely smooth ride. You need to be able to have a core strategy that can move forward without getting derailed when adjustments are needed. The leadership on the matter matters, and that’s why I'm very proud that we have a great group of leaders who can handle these types of assignments and make our clients’ lives easier.

There’s certainly more than one way to skin a cat, and it’s exciting to be a problem solver in that regard.
 

Recap: Creating Your Own Discovery Team

This is our final recap from Discovery Symposium 1.0. If you would like more information on the event or to inquire about attending in 2010, please email us.

As more corporate legal departments are looking to bring discovery in-house, this panel was of keen interest to attendees.

What was very striking was how the panelists – an incredible group of leaders who really know about bringing matters in-house and managing the discovery process – have truly become knowledgeable about their respective companies’ IT departments. They're very familiar with IT -- something that likely could not have been said of most attorneys even just a few years ago. This sheds a little more light on the demands of the discovery process today.

Even though each of the panelists work within a large company with substantial IT departments, it was clear that the best practices they brought with them could apply to companies of any size. Creating a team often means including legal, IT, human resources, operations, outside partners – whoever touches the company’s data on a regular basis. And this team helps guide and monitor progress from through collection, production and review.

It’s also worth mentioning that the attorneys on this panel have collectively saved their companies tens of millions of dollars on the discovery process in a relatively short period of time. Talk about demonstrating the value of the legal department ...

Creating Your Own Discovery Team
Panelists: Senior attorneys from Fidelity Investments, Cox Communications, Hospital Corporation of America (HCA), Georgia-Pacific
Moderator: Candice Reed (Executive Director, Counsel On Call)

Summary of Dialogue
IT staff is critical to the team as well as representatives of other departments specific to your business. Know the people on your team; trust them. Know where the data is located. Know your systems. Trust your company knowledge, which surpasses that of a law firm.

The discussion began with a statement: E-discovery is a management task. Those in charge of discovery cannot be afraid of technology, must serve as traffic cop and coordinator, and need to be a “techie” who can talk to lawyers. When choosing members for your discovery team, it’s about 1) Having the right people on the team, and 2) Trusting your own judgment that you have put the right people on the team. One panelist said her team meets weekly.

Another panelist said she received incredible pushback from her outside law firm when she decided to build a discovery team in-house. Her team includes attorneys with employment and patent experience, a paralegal, representatives from the IT department, as well as a person from the legal department dedicated to e-discovery (who has since been moved to another department and not directly replaced). The team meets once a month.

Another panelist put her team together when in-house e-discovery experience quickly surpassed that of the company’s outside counsel. The core team consists of her, representatives from the IT department, as well as an outside consultant. Other team members are attorneys with commercial, labor, and insurance experience and representatives from Records Retention. Since three-quarters of her company’s corporate employees are members of the IT department, it is important to have everything IT-related documented – how the department is organized, who reports to whom, detailed protocols, and the location of specific data. This information also is in the company’s E-Discovery Manual, which is constantly updated. Due to an increasing number of matters, the panelist wanted to create a “thoughtful and consistent approach to review.” After each project, the team would discuss what data was collected, what part(s) of the process worked and what didn’t, and even examined the overall cost. Perhaps most importantly, they looked at what could be done to make future matters cost-effective. In order to better predict future costs, her company partnered with Counsel On Call, whose team handles several parts of the company’s discovery process, to find a software vendor that would do just that.

Another panelist stated that all data collection is done by her in-house team, which consists of a technology specialist (a member of the legal department) and staff members dedicated to forensics and collections. Representatives from compliance, human resources, and audit departments also are interested in the data collections. She added that the names of employees on legal hold are posted on the company’s main web page, giving the responsibility to each individual to know whether he or she is on hold. Also, everyone on legal hold takes a mandatory, computer-based training. She does not rely much on outside counsel (but is considering sending them to her company’s “E-Discovery College” course) as usually the in-house team knows and understands more about these matters. To communicate policies to her employees, she also hosts “Lunches and Lectures.”

Regarding the size of the team, the panel believes it is dependent upon the amount of litigation. The group was in agreement that the size is not as important as those who are on the team, specifically those who know where the data is located. One panelist’s top priority is to never turn over a privileged document; Other panelists had recently lost key team members and were filling the gaps internally.

In follow up, Ms. Reed asked the panel what keeps them up at night. One responded with “making sure we have all the data.” She worries that something will be left in a warehouse. However, she finds comfort in her IT staff. Each person has a designated back-up (another individual in the department) and all information is shared.

Ms. Reed also asked if outside counsel was involved in setting up the discovery process or is involved directly with the e-discovery team. One panelist said she uses outside counsel and often prefers to use first or second year associates simply because of their computer literacy. Her company currently has Counsel On Call attorneys on its discovery team, and she is adamant about outside counsel respecting these contract attorneys. Another panelist views outside counsel as part of the team as well but not as decision makers. All decisions are made internally because those in-house know the business and the matters better. Ms. Reed asked how she handles this with outside counsel. “Directly,” the panelist said. She tells outside counsel she wants efficiency and cost-effectiveness and to “go for it” if they can match it. This has not happened yet, and she is very confident in her company’s model and processes, and how they work with Counsel On Call to achieve cost savings. Also, she mentioned outside counsel helped define the preservation letter – “They can comment on it, not change it,” she said.

Is That Thunder In The Distance?

There’s an interesting phenomenon happening in the litigation arena right now: nothing.

Well, that’s not entirely true. There is plenty going on, of course, but the sour economy has put a different spin on how litigation is being managed. Cases are not marching in lock-step with a normal timeline. For instance, some companies are putting everything related to a piece of litigation on hold until they are required by time, or the case itself, to act. And action this time around is preceded (in most instances) by a lot of anxious planning and budgeting.

Now this isn’t anything new – many companies have longstanding policies not to act on litigation until forced to do so. It’s often a cash-flow-versus-workflow approach. However, I am seeing a palpable sense of hesitancy with regard to litigation and case management. Companies are taking an ‘I’ll believe it when I see it’ stance, whether it’s regarding the various stimulus measures and burgeoning economic turnaround, or the stability of a company and their department's budget, or any number of other things. That attitude is impacting case management. These companies know that eventually they are going to have more work (i.e. revenue), but they simply do not want to spend the money now, when times are tight, addressing litigation matters unless they have to.

All is not dour under this approach. One great side effect is that companies are taking this time to create, refine or institute their approach to e-discovery for when the storm finally does come. If their ducks aren’t already in a row, they are briskly walking toward the line.

We’ve participated in dozens of planning or strategy meetings that are seeking to solve the bigger issues: how to create repeatable discovery processes, how to budget discovery costs, the software tools to use, the action items surrounding a litigation hold, the data collection and management process, analyzing the benefits of early case assessment tools, and creating processes that facilitate collaboration with outside counsel and all their legal vendors, among many, many other issues.

All of this is ultimately focused on cost and efficiency, of course. And it’s never too early to make that a priority – or in some cases, it’s not too late.
 

Maximize Resources, Achieve 'Value'

You can’t scan a legal rag nowadays without seeing an article predicting the end of the billable hour, or the revamping of the business of the practice of law, or some other projection of how the practice is going to look at the end of this recession. Some insights are better than others, like the recent Law.com article about in-house departments requesting their outside counsel to reduce rates or present an alternative fee arrangement. Patrick Lamb’s commentary on the matter on his blog also really drew my interest – I think he hits the nail on the head.

Undoubtedly there is some room for firms to reduce rates and I believe, in time, the market will bear that out (I love the anecdote from a lawyer who told Susan Hackett at ACC that $700/hour was a “suicide” rate). But what’s more central – and the article skims over this while Patrick calls attention to it – is that hourly rates are really only a small part of the equation and that efficiency and quality are the key elements. I'd add one more factor to this cost-saving/value formula: maximizing resources.

Based on hundreds of conversations I’ve had with in-house attorneys in recent months, there really isn’t as much pushback on the partners’ high hourly rates. Sure, clients would like them to be lower, but they also understand you have to pay for great legal counsel. The real problem is at the associate level, where it’s much tougher in some instances to defend the value received. In many cases they’ve turned to smaller or regional firms to get the rates they seek across all levels.

But where we’re seeing in-house departments achieve budgetary success is in conducting an audit of the work that needs to be done and overlaying that with the available resources. Here’s a rudimentary example of how the process works for a fictional department that has (only) three operational units: litigation, contracts and labor and employment:

Litigation

Old Way
Call outside counsel to handle; review might be outsourced and marked up, then the documents re-reviewed by first-second year associates; law firm controls the entire process

New Way
Call outside counsel and discovery team for a planning session; discovery team controls costs and productivity in a transparent manner, liaises with technology vendors, and works closely with law firm(s); law firm handles strategy; in-house department controls the process

Savings: 30-75% or more, typically in the millions annually

Contracts

Old Way
All matters that can’t be handled in-house are sent to outside counsel, including simple matters, such as routine leases, costs $300+ per hour, 10-15 hours of work per week


New Way

Most complex matters are still handled by outside counsel; routine matters like leases and overflow work handled by experienced contracts attorneys billing less than $100 an hour, supervised by in-house attorney(s)

Savings: $150,000+ per year

Employment

Old Way
Routine and EEO matters and trainings are handled by law firm associates for $400+ per hour; such work is sporadic, but typically averages 10 hours of work per week; monthly trainings are required in different areas of the country


New Way

EEO matters are handled by attorneys with 10+ years of experience for less than $100/hour; trainings are conducted by the same attorney(s), who know the company’s policies well, for the same hourly rate or an agreed-upon flat rate

Savings: $150,000 per year on EEO matters; $35,000-$50,000+ on trainings


So while this is far from a detailed example -- and many in-house teams have more than three operational units -- it provides a glimpse of how many of our clients are approaching their legal work now. There is always going to be a significant amount of work that needs to go to outside counsel; there is always work that will need to be done in-house; and there's a growing recognition of this middle ground of work where costs need to be cut, and that's where a lot of value is being discovered.

It also shows that it doesn’t take wholesale changes or eliminating outside counsel to achieve significant cost savings – just maximizing resources and reaping the resulting value.

Podcast: What Works In E-Discovery, Cost Savings

The second podcast with LegalTalk Network's In-House Legal show is now up.

Richard Stout, director of our Litigation Support Division, and Dennis McKinnie, executive director of our Atlanta office, discuss all things e-discovery: Why the review rate is important, early case assessment tools, what e-discovery savings should really look like, the importance of outside counsel, and why every in-house department should have a discovery process it controls, among other things.

The 13-minute interview begins around the 13:45 mark. The podcast is also available on iTunes for free download.

We hope you'll check it out and let us know what you think.