OK … so that’s not exactly what the DC Bar said, but take a moment and think about what two recent DC ethics opinions are suggesting. The Bar opinions note that many e-discovery vendors providing document review services are either a) practicing law without a license (opinion 21-12), or b) splitting fees improperly with non-lawyers (opinion 362). The obvious way to comply with these opinions will be for these e-discovery vendors to be limited to a) lawyers, b) practicing at law firms.

Are e-discovery vendors practicing law? Probably

Will ethics rules and opinions stop them? Probably not.

And we continue to long for the good ole days …

Yet another 2011 ILTA Conference chance meeting lead to an interesting Q&A with Jim McGann VP of Information Discovery at Index Engines. In my prior role at Fulbright, I worked with the e-discovery practice group on developing ideas for building client relationships. As part of this we offered a “Litigation Readiness Audit” to help clients assess their preparedness for e-discovery requests. Not many bit on this offering. The best guess for why – was that clients didn’t have budgets for preparing for getting sued – but only for when they actually were sued. So the Q&A with Jim was a nice opportunity to see if things have changed. Read for yourself to get the full update.
Q&A with Jim McGann: Are Corporations Ready for Litigation Readiness?
Toby Brown: To what extent do you think the corporate world is finally ready for litigation readiness, after so much lip service about it over the past several years?
Jim McGann: Legal issues might force the corporate world to become litigation ready even if they aren’t now. The courts are not just asking anymore – they are insisting that data be retrieved for litigation. The technology now exists to make this easier and cheaper than it has been in the past, and today’s corporations must be informed and ready to use it.
Toby: If you do see a shift occurring toward greater litigation readiness, what have been the key drivers/reasons that are behind this?
Jim: Yes, I have seen a shift occurring towards greater litigation readiness. The key drivers are that courts aren’t accepting the burden excuse anymore that this data can’t be found or it’s too costly to retrieve. They are insisting that corporations adhere to these data requests or be heavily penalized. Recent cautionary tale court cases are prompting corporations take a second look at where their data is, and how to be proactive so they have the data needed and aren’t keeping data that could be a big liability in the future.
Toby: What are the benefits of taking a proactive approach to litigation readiness and/or information governance?
Jim: There is a lot of stored data lying around unnecessarily that could pose significant legal liabilities for companies. Knowing what you have, where it is and avoiding the “save everything” policy have all become critical to corporations. Knowing all this before there is an issue and having data retention policies in place can eliminate painful litigation issues in the future.
Toby: What are some steps that corporations can take now to make themselves litigation ready, and which department(s) should be in charge of overseeing the process?
Jim: Both IT and the legal department must be involved in this process; they must work hand in hand. Legal must create the policies, they know what data needs to be saved and for how long. They need to set the policy for IT to comply with, and of course, IT needs to actually comply with the policy.
Policies must not only apply to current data on corporate networks, but legacy data as well. Typically legacy data represents significantly more volume than the current data and it is frequently neglected because it is out of sight, out of mind. Legacy data is hidden away on backup tapes used by IT for disaster recovery purposes. Companies have thousands of these tapes that can become discoverable and represent a liability for the organization. When developing a solid information governance strategy, everything has to be looked at.
Toby: What will happen to companies that miss the boat and don’t take these steps?
Jim: Companies that don’t take a proactive approach to litigation readiness will always be putting out fires, having to go through Terabytes of data to find a few critical pieces needed for litigation, usually with not enough time to find them. There are no excuses for the courts anymore, they want the data and they want it right away. This is not easy to do if you haven’t taken the steps and started managing your data.
Toby: How are law firms getting involved in this process and what is their responsibility to their clients from a litigation readiness standpoint?
Jim: Law firms are thinking more proactively and are advising their clients on litigation readiness. After many reactive “fire drills,” law firms see the pain and exposure caused by improper management of corporate records. As a result, they are advising their clients to become litigation ready and implement proper information governance strategies.
Toby: Jim – thank you for participating and for your contribution to the 3 Geeks!

At the 2011 ILTA Annual Conference I had the opportunity to refresh some of my e-discovery knowledge. A few years back I was in that market and like to stay up on developments. To this end I met with Christine Musil, Director of Marketing for Informative Graphics Corp. She gave me the run-down on redacting in native documents. I know … this may sound a bit too e-discovery geeky, but it’s actually an interesting topic, given past developments. The older controversy over producing (handing over to the other side in litigation) Word documents was including the sometimes privilege waiving metadata. With native document production now the rage, the issue of redacting has taken on a new importance, since the document content should remain ‘original’ while also containing redactions.
So much for my brief, overly simple, partially adequate explanation. I’ll let Christine’s guest post provide a more logical and complete explanation.
[Guest Post by Christine Musil, Informative Graphics Corp.]

Rule 34(b) of the December 1, 2006 amendments to the Federal Rules of Civil Procedure (FRCP) set the default obligation to produce a document “in a form or forms in which it is ordinarily maintained or in a form or forms that are reasonably usable”unless a different format is requested. Does this mean all documents must be delivered in their original, native format (e.g., Microsoft Word or Excel)?
Not usually. In fact, the request of native production is often made without the requesters knowing why they want it or if they will be capable of accessing the data if they get it.
A commonly-cited reason for requesting native format is metadata. Metadata is traditionally the computer data about a file, like author name and creation/modified dates, but now also includes unseen elements like comments, hidden rows/cells and formulas in Excel and comments and Track Changes in Word. However, this metadata may provide more than is reasonably necessary for the requester’s needs and more than the producer is legally obligated to provide.
According to Principle 12 of The Sedona Principles, as long as both parties agree at the onset, TIFF, PDF, native or a combination of all three is acceptable. This is why the often neglected Meet and Confer is so important so production format details can be hammered out early on.
The Meet and Confer presents the perfect opportunity to discuss concerns about metadata, production format and privilege. Ideally, someone who understands issues about document types, the possible volume of data and any issues about what the data contains (like privacy or proprietary information) should be present.
Another concern around native format production is redaction—the removal of privileged or privacy data from documents. Formerly done with a black marker and copier, today, electronic redaction tools such as Adobe Acrobat and Informative Graphics Redact-It can save a producer time by searching for privileged phrases, automatically finding private information, and creating a new, redacted rendition of the original document in TIFF or PDF format.
But how do you perform electronic redaction when native format is required? Redaction, by its nature, changes the document and requires it to be saved as a new version, regardless of format (even native). It is that specifically that makes issue of format less relevant for those documents needing redaction. Should a particular document be called into question, you can always produce the original document with its metadata completely intact — but only if it’s called into question.
So while the hard fact remains that plaintiffs will continue to demand native files from defendants, understanding what is actually required and reaching agreements early will avoid potentially large problems later. Armed with an understanding of file formats and what metadata is actually needed, plaintiffs can be confident about the information they are requesting and defendants can be sure they are delivering what the other side is entitled to- and no more.

A group of lawyers from Gibson Dunn’s Electronic Discovery and Information Law practice group launched the first publication in a planned ten-part series entitled “E-Discovery Basics.” The first publication, “Why Should I Care About E-Discovery?” went out yesterday and discussed how, despite the fact that most lawyers have little interest in learning anything about the topic, e-discovery has become too important and too intertwined in the legal process, that it is simply an area that in-house and outside lawyers need to understand. The trio of Gareth Evans (Partner, Los Angeles), Jennifer H. Rearden (Partner, New York) and Farrah Pepper (Of Counsel, New York) kick off the series by advising in-house and outside lawyers that just like death and taxes, “electronic discovery is unavoidable in an era in which virtually all business information and communications are digital.”

I contacted Gareth Evans by email and asked what the genesis was behind creating a series on e-discovery basics. Evans responded that he had discussions with in-house lawyers who wanted to learn more about e-discovery, but most simply “do not have a lot of time available” to devote to learning the topic, “and in many cases do not know where to start.” Gibson Dunn has published numerous mid-year and year-end reports, and client alerts that discuss e-discovery topics, but those seemed to focus on changes in the overall e-discovery topic, but didn’t create a good starting point for someone that may not have a solid grasp of the subject. Evans told me that his team “had not seen anywhere an easily accessible and comprehensive overview of all aspects of e-discovery” could be found, “so we decided to put together this series.”

The series is scheduled to go out on a regular basis over the next few months and cover the following topics:

  • The E-Discovery Life Cycle
  • Litigation Preparedness
  • Legal Holds
  • Preservation
  • Collection
  • Processing and Review
  • Production
  • Admissibility
  • Cross-Border Discovery Challenges

Evans said that the “intended audience is primarily in-house lawyers and compliance personnel,” but they are hoping that it will have a much wider appeal. “[W]e hope that these pieces will be valuable to anyone interested in learning about e-discovery.” The Marketing team at Gibson Dunn will be sending out the “E-Discovery Basics” updates to their clients and others as well as posting them on the practice group’s web page.

For those of you that have been asking for a primer on e-discovery, it looks like the E-Discovery practice group at Gibson Dunn is stepping up to fill that need. If you want to sign up to receive future installments of the “E-Discovery Basics” publications, you can send an email to clients@gibsondunn.com, with the subject line “SUBSCRIBE to E-Discovery Updates”.

In the last post in this series on law firm profitability, we examined the implications of shifting from a cost-plus business model to a margin model for law firms. The bottom-line is that firms need to reduce the number of hours it takes to provide a service, and/or reduce the average cost per hour for the same service. For both law firms and clients alike, this means getting more for less – a theme that permeates our world these days.
Part 1 – How to Reduce the Number of Hours
The theme-du-jour for this topic is Legal Project Management (LPM). The basic claim is that project management can drive efficiencies in how matters are managed. This claim makes a number of assumptions, the primary one being that some plan exists. This “plan” will be executed well through the use of LPM. Without a plan that outlines efficiencies and reductions in hours used, LPM gets you nowhere. So … where do these plans come from? Presumably the Project Managers (PMs) will participate as ‘Planning’ is step 2 from PMBOK. PMs will sit down with lawyers and draw up a plan showing how resources will be spent to meet both the budget and legal goals of a matter. Here is where a significant challenge arises. The PMs’ role is not really about process innovation which is an effort to redefine plans. They may play a role, but it is not their focus or skill set. At times they identify problems in a process, however, correcting these problems is only their job within the context of a given plan. Others have addressed this difference via discussions on Six Sigma and other process improvement methodologies. My 2 cents – LPM has enough challenges of just keeping lawyers on a plan , so they won’t have the time (nor expertise) to serve as process improvement people as well. So LPM will only be as a good as the plans and processes lawyers already use. Subject to some tinkering with a plan, LPM will only advance the ball so far. As I like to say, LPM will be necessary, but not sufficient to address this challenge.
One potential exception: Partners could look at PM as a way to re-examine matter staffing. Instead of sending one partner and two associates to conduct a deposition, they could send one senior associate. This approach will cut the number of hours and could easily produce the same, or an acceptable level of service quality. However, I see this outcome as unlikely. What is a more likely outcome from such an exercise is one partner conducting the deposition, if the choice is actually made to reduce the number of hours. It is more likely since comp systems motivate the hoarding of billable hours. It is unsustainable since partner time generates little to no profit. Since partners will be motivated by self-interest instead of firm financial interest (a.k.a. profitability), they will most likely not take full advantage of this opportunity.
In contrast, process improvement and innovation holds tremendous potential for reducing the number of hours used in delivering a service. This effort is about identifying wasteful and/or repeatable processes, and then implementing new processes to eliminate the waste, and automate wherever possible. The business world is awash in ideas for meeting these goals. Six Sigma is a more recent, well defined approach. One firm (Seyfarth) has taken this method on, although it’s outcomes are yet to be seen. To law firms’ benefit, most legal work is handled within a loosely defined process. Of course, some processes are better defined than others. But at a minimum there is usually a process to follow, be it a case (note the rules of procedure) or a deal, following due diligence, negotiating, etc, or perhaps the best examples: regulatory filings. Although, with rare exceptions, most of these processes are not defined as such within law firms. This identifies a valuable role for LPM – building the first process descriptions via the plans they develop.
Eliminating Waste
Wasteful process or effort is that which produces low value results. Lawyers will find this exercise very challenging, since they tend to think all effort is valuable. This is a legacy of the ‘no stone unturned’ education, training and practice they have experienced. It is also the product of the ethics framework of the law. “Representing your client’s best interest” implies an exhaustive search for the truth, regardless of cost. In other words, they tend to think all depositions have the same value, since any one of them could lead to the discovery of the ‘smoking gun.’ In reality, there is a cost/benefit decision to be made for all legal tasks. This mind-set will need to take a more prominent role in defining legal processes. This is how waste will best be identified, then eliminated or reduced, resulting in fewer hours on a matter.
Using Automation
Automation will be the long term, best effort for reducing the hours involved. We have previously posted examples of this idea on 3 Geeks. KIIAC’s tool is one that demonstrates the power of this approach. This system actually displaces time currently spent by lawyers doing relatively menial tasks. This automation effort will also be a challenge for lawyers to accept. Much like the e-discovery world, it will take some time for lawyers to develop trust in the automation technologies. Although this time-frame is accelerating there, evidenced by the relatively quick embrace of predictive coding. Lawyers will also bristle a bit at the thought of technology replacing them, given their self-interest and their role as knowledge workers. However, e-discovery has clearly demonstrated both the necessity of embracing technology and its value in automating tasks. It would be physically impossible for lawyers to review all discovery content today. As well, they would be much less effective than technology, since they cannot hold all of that information in their heads at one time. Bottom-line here: automation will be a highly effective tool for reducing time in legal work. And it will become a necessity as it proves itself out.
Process innovation will be necessary and sufficient in order to lower the cost of delivery of legal services. This will be an on-going, never-ending effort, as most any business can attest to now.
Law firms looking to reduce hours of effort, would do well to; 1) define their processes through LPM, 2) identify wasteful or redundant efforts and reduce or eliminate them, and then 3) explore automation technologies that will enable long-term sustainable reductions in the costs of delivering services.
Part 2 of this discussion will explore reducing the average cost of time. There will be some overlap of ideas, so a convergence of the two will be provided as well.

I’m sitting in tomorrow on Rich Leiter’s Webinar/Podcast, where we’ll talk with Lawyer, Writer, Law Professor, and all a round deep-thinker, Richard Dooling.

Doolings’s latest book, Rapture of the Geeks: When AI Outsmarts IQ, discusses (and makes fun of) a number of scientists, technologists, and lawyers and he seems to be either a very smart person… or a complete lunatic. I’m hoping for a bit of both.

I had to laugh, though, when I was reading a 2008 review of his book in ARS Technica  and the “two-page” review ended page one with this quote:

“Which brings us to the Cylons”

What a hook!! I had to go to page two to see how the Cylons came into play, and I decided right then and there that I needed to borrow that for a blog post title!

Within a few minutes, I read this review, had a long talk with my E-Discovery support person, and got the email from a friend about an xkcd.com cartoon and diagrams from This is Indexed (both of which are worthy of a spot in your RSS feed!!)

My brain immediately came up with this Venn diagram:

Mark Gediman says that The Borg would be a closer relation, but I told him that I’d have to take out the “Religion” circle to make it truthful.
So, tune in at 2:00 PM Central (Nov. 5th) for LawLibCon 15 with Richard Dooling.

I’ve seen a couple of articles on VaporStream’s “Electronic Conversation Software”. The idea is that you can send communications that look a lot like e-mail, but the communication is temporary, exists in the cloud, and resides in your computers RAM (temporary memory). Once the communication is over, it disappears and cannot be recovered, even through e-discovery methods. The product is pitched as a great resource for reducing e-mail server storage, reduce the cost of potential e-discovery litigation, and satisfy the two tenants of HIPPA requirements. I took a quick look at it this morning and found that it is more of an Instant Messaging (IM) replacement than an e-mail replacement, but that it looks to have some good uses.

When I first read about this in itWorldCanda, and then again in ECM Connection, the articles were structured in a way that made me think that this was something that could potentially replace e-mail. I started dreaming of a situation where all those crappy vendor emails that I get ALL DAY LONG, could vanish automatically after I read/skimmed/ignore them. However, I quickly learned that you could only send or receive communicate with others that are also on the VaporStream software. So, my visions of a magic vendor communications fell to the wayside.

So here’s the reader’s digest version of how the product works:

  1. Sign-up for VaporStream’s service (free 60-day trial… $7.50/mth after that).
  2. Get everyone that you want to have confidential, temporary communications with to also sign up.
  3. Use VaporStream’s web or app interface to send and receive communications from other VaporStream users.
  4. The messages are sent and read via SSL (secure) through VaporStream’s interface, and reside in your computers temporary memory (RAM).
  5. When done, the message disappears and cannot be recovered.
VaporStream attempts to electronically recreate a “verbal conversation” using IM or e-mail structure. The only way to “save” the communication would be to take a screenshot of the message, but even that doesn’t get all of the communication because the header and messages are sent separately (thus, you’d have to take two snapshots, and tie them together.) There could be a great advantage to having something like this set up between members of your department or firm, but again, it is more of a compliment to current tools like e-mail or IM, and not necessarily a replacement for either. 
I could see a product like VaporStream being used on internal communications where you want to let others know certain things, but don’t necessarily want to clutter up everyone’s e-mail in-box, or have the issues that surround communicating via IM (if you’re even allowed to do such a thing.) Perhaps there are certain clients that would like a product like this to communicate on sensitive matters that you don’t want to leave any type of communication trail… I’ll let you think about the ethical “slippery slope” that something like that might bring.
VaporStream is definitely worth a look, and should be brought up as a potential secure communications resource that could be used in the right situation.

I was discussing some of the issues raised by Craig Ball in his article “Are We Paying Five times too Much for E-Discovery” with some friends of mine when I realized how lucky I was to be in the law firm’s Library/Research department rather than attempting to manage an E-Discovery department. Listening to some of the stories and reading blog posts discussing the reactive strategies that firms adopt when addressing e-discovery projects made my head start to spin (actually, it was more of a slow shaking of disbelief.) Electronic Discovery is not exactly a new phenomenon in the legal industry, but while listening to some of the stories, it was like every attorney that found themselves with an e-discovery case had no idea how to handle it, yet was determined that he or she knew better than the e-discovery experts that were employed by their firm.

Now, I’m sure there are folks out there that have outstanding e-discovery programs, great relationships with their attorneys and clients, and a stable of proficient third-party e-discovery partners they can depend upon for consistent pricing and accurate results. However, from the folks I’ve been talking to, that sounds like the exception and not the rule. What I’m hearing is issues of attorneys submitting data in a hodge-podge fashion; attorneys and clients working out deals with e-discovery vendors on matters without discussing it with those in the firm that are supposed to be the go-to people for e-discovery; vendors charging one price on Monday, and a different price on Tuesday for the same work; pressure to conduct in-house e-discovery work with unobtainable deadlines using inadequate resources, and; the only consistent questions being asked is “how much is this going to cost?” quickly followed by “why does it cost that much?”  It would be like me trying to run a law library and having each attorney negotiate separate Westlaw or Lexis contracts on a per-matter basis.

In fact, just like with research, e-discovery really fits that definition of an ounce of prevention is worth more than a pound of cure. When legal research is conducted using improper search queries, or wrong databases, or even wrong research tools, it results in extra costs that are either passed along to the client or eaten by the firm. The same results happen with e-discovery processes. Heading down the wrong path on e-discovery processes results in backtracking and having to start the process over and all the time and money spent turns out to have been wasted. When I conduct orientation for new associates, I stress to them that the research staff in the library has a wealth of knowledge and experience that they need to leverage when conducting research on issues that  the associates are unfamiliar. Same applies with e-discovery experts. It’s not saying that the attorney can’t understand how to do the work… it’s just that we’ve hired experts that can make sure that they are focused on doing what they do best, and that is working as a lawyer and finding legal issues surrounding discovery… not working as a technologist and attempting to figure out the best manner to extract data from hard drives.

I went back and re-read Toby’s post last week on reducing price and cost, where he presses for a “business goal” when it comes to handling e-discovery. However, this exercise seems to assume that there is some sort of stability in how firms handle their e-discovery matters. The only way to fight the “Wild West” effect, and move toward a stable e-discovery process is through the establishment of best practices. Law firms have to create best practices for their e-discovery processes that:

  • specifically that lay out how  matters are handled each and every time;
  • define exactly who is in charge of processing the data;
  • that clarify to the attorneys and clients the cost involved, and;
  • identify what can be handled in-house versus what has to go to predetermined third-party vendors for processing.  

My suggestion was that regardless of how long the E-Discovery Best Practices guide turns out, that there should be a one to two-page cheat sheet that is distributed to every attorney that works on matters that involve e-discovery. The faster you can get everyone on the same page, the faster you can get away from the Wild West approach and start working toward those e-discovery business goals.

Computing in the Cloud (f.k.a. SaaS, Hosted Applications, ASP, Thin Client computing, etc.) is all the rage these days. And it incites a high level of emotion amongst both its supporters and detractors. Those holding back against the Cloud trend point to security of information (for lawyers this is your clients’ information) as the reason not to move into the Cloud. Supporters note that 1) moving into the Cloud adds levels of collaborative functionality and service that client/server tools can’t match, and 2) the Cloud can be much more secure than self-hosted and maintained information.

The problem is that both sides are right. Moving client information into unknown and ill-defined Clouds can lead to bad consequences. Meanwhile, trying to stay up on fast changing and conflicting security concerns on your own is daunting, at a minimum. And on top of that, just try to keep up with collaborative technology innovations.

What is needed is a highly trusted Cloud that will host client information in a well-defined and known set of locations. Ideally this will be a provider with years of experience hosting mission critical information. You know … something like case law or numerous other sources of legal content. The challenge with that type of vendor would be their willingness to host applications from third parties.

I had the opportunity recently to hear a ‘Cloud’ presentation from Lexis. My expectations were low, looking forward to an hour of Buzzword bingo. However, I was more than pleasantly surprised. Terry Williams, VP Managed Technology Solutions, talked at length about how Lexis has seen this coming and actually DONE something about it. They are already hosting third party applications in the e-discovery arena and are moving out beyond that realm into other legal applications. And get this – they are even exploring hosting general (non-legal specific) applications. When I asked him my $64 Dollar Cloud question (what about hosting MS Exchange?) he didn’t flinch. Although they are not quite willing to answer this question yet, they have at least asked it. The potential result would be an option for law firms to eventually move all of their software and data into a trusted Cloud. When it comes to securing your data in this scenario, Lexis will even give you the option of naming both your primary and secondary data center locations (insuring your data stays on-shore).

Someone pinch me – I must be dreaming.

Terry said to expect more information and announcements in the coming months. Their intention is to move fast, since nimbleness counts for so much these days.

There comes a point in time where you have to shake your head and say that we’ve created something that is unsustainable. Whether it was the Dot Com bubble in the 90’s or the Housing bubble this decade, there is a point in which you have to stand back and say that reality is going to cause a backlash at some point and cause the bubble to burst. It is August 2009, and I’m calling it: “Electronic Discovery Is A Bubble” and in the next couple of years, if not sooner, it is going to burst.

Why is it a bubble?
First of all, the basic “idea” behind e-discovery is something that is difficult, if not impossible to accomplish. That idea is that electronically stored information (ESI) can be captured, indexed, encoded, filtered and searched so that you can find that smoking gun that every lawyer dreams of finding. Craig Ball, in the August 2009 issue of Law Technology News, gives some good examples of how difficult this process is.
Secondly, it is too expensive. Just with the Dot Com and Housing bubbles, you cannot expect clients to continue to pay exponentially for the cost of processing, indexing and reviewing ESI if that cost is greater than the reward. In other words, why would your client pay $1 million in E-Discovery costs for a reward of $500 thousand?
Zubulake vs. Rule 1, FRCP
In the same issue of Law Technology News, David Waxse, U.S. Magistrate Judge, District of Kansas, gives us his favorite quote, and I find it to be a great quote to use when discussing E-Discovery and the overall cost:

Our job is to secure the ‘just, speedy, and inexpensive determination of every action.’ — Rule 1, Federal Rules of Civil Procedure

Compare this quote to the rules set forth in Zubulake or in the new California E-Discovery rules (here’s a great [PDF] overview from Winston Strawn attorneys), you’ll find that the two concepts do not mesh.
I’m not saying that E-Discovery is going away, what I’m saying is that there is going to come a “correction in the market” over the next few years that will burst the bubble in the cost of collecting and analyzing ESI. Whether it is through reduction in cost by companies doing ESIwork in-house, through outsourcing, settling costly ESI matters early, or by courts revising laws to prohibit costly E-Discovery requests or shift the cost burden across the parties, you are soon going to hear a “pop”.