Each day seems to bring more bad economic news. Businesses across the country are struggling to address costs while revenues plummet. In-house attorneys in corporate legal departments are confronted by shrinking budgets and are required to do more with less.
Understandably, in-house attorneys and directors of legal services are demanding that law firms reduce the cost of legal services. At Gardere, we understand the seriousness of today's economic circumstances and strive to provide solutions that reduce legal costs while continuously exceeding client expectations regarding our legal services.
Discovery is expensive.
Litigation has never been cheap. In fact, alternative dispute processes came about primarily as a result of the high costs associated with trial. In the past, preparing for and going to trial often represented the biggest expense in a litigated matter. These expenses were driven by the increased number of attorneys and paralegals involved and the increased amount of time spent conducting or preparing to conduct trial activities.
Times have changed. Cases rarely go to trial these days. In fact, some studies indicate that less than 2 percent of cases filed in federal court go to trial. (See Patricia Lee Refo, The Vanishing Trial, Litigation Online - The Journal of The Section of Litigation, American Bar Association, Volume 30 No. 2, Winter 2004, at 2).
The increased number of people and time formerly associated with trial activities are now found in discovery activities. Consequently, discovery can account for up to 80 percent of litigation costs. Of that amount, up to 75 percent can be accounted for in document/data discovery.
Reduce litigation costs by reducing discovery costs.
- Eliminate redundant legal tasks.
A surefire way to reduce litigation costs is to reduce the number of lawyers engaged in discovery tasks. In today's digital world, a significant number of traditional discovery tasks can be centralized while others can be performed by less expensive legal professionals.
Common Source: Regardless of the matter being litigated, the tasks involved in modern discovery are fairly uniform. The reason for the uniformity is simple: for the most part, all of the material that is to be collected, processed, reviewed and produced is located in the Information Technology (IT) Department. The uniformity of source provides for centralized processing of both the legal and technical discovery tasks.
All too often, however, each firm engaged to represent the company goes to the IT Department and makes the very same types of requests that other firms have made. Thereafter, each firm selects its favorite vendor to process the collected material. From the standpoint of the company, however, it is inefficient to have every firm and vendor engage in the same types of discovery tasks.
To eliminate such inefficiencies, the company may wish to hire one law firm to act as Discovery Counsel for the purpose of managing and coordinating all of the activities involved in the collection, processing, review and production of electronic material. The due diligence undertaken by each firm to insure that it is responding to and participating in discovery properly needs to be done only once by Discovery Counsel. Thereafter, each new matter simply requires the processing of material gathered from newly discovered custodians or data sources.
Take advantage of the common source. Hire Discovery Counsel so that new matters do not provide the opportunity for each newly engaged outside counsel to reinvent the discovery wheel.
- Technical guidance provided by Discovery Counsel.
While some lawyers do not want to be involved in the details of electronic discovery, it is important to be knowledgeable about the various e-discovery processes involved so that the most economical discovery methods may be employed. Below are several cost-saving principles that should be employed by Discovery Counsel.
Pay for it once: It frequently happens that the documents and data created and maintained by certain custodians or departments turn out to be responsive to document requests in numerous cases. Unfortunately, organizations rarely have a system that provides for the documents or data processed and produced in one matter to be reused in a subsequent matter. The result is that clients usually pay for the same material to be processed and produced numerous times. Additionally, counsel from different firms are rarely required to confer in order to obtain an accurate picture of the e-discovery activities that have previously been undertaken on behalf of the company. A comprehensive system that tracks discovery work for reuse should result in significant savings.
Type and volume: Modern discovery costs are driven by the type and volume of available material. Knowing the type and volume of available material is the key to making very important decisions regarding data collection, processing and production that will have a tremendous impact on cost. (See "Do not buy too much" below.) Additionally, by knowing the type and volume of potentially responsive material in a particular matter, the costs and time required to respond can be accurately estimated.
Do it once: Unfortunately, each new matter often brings in new attorneys who have no knowledge of the company's custodians or IT systems. Valuable time and money is lost while the new firm learns what was previously learned in other cases by other firms. Once again it is a case of reinventing the discovery wheel.
Avoid duplication of effort and additional costs by hiring competent, professional legal counsel who know e-discovery front-to-back and designate them as Discovery Counsel. They will meet with the technology department and learn the fundamentals of the IT systems and company custodians. Thereafter, as discovery obligations arise, Discovery Counsel will be able to commence work immediately. The company will save time and money.
Do not buy too much: Many levels of e-discovery services are available to address the production of client material to third-parties. The costs for such services varies widely between the types of services and the service providers. The most effective way to save costs is to match the correct service/service provider to the requirements of the case.
For instance, there are generally two types of data collection methods available: forensic and non-forensic. All too often the forensic method is automatically utilized. However, neither method has been mandated for use in federal or state courts. The facts and issues of a particular case should determine the method employed.
Generally, the forensic method should be used when there are issues such as forgery, document/data manipulation or destruction. When these types of issues are not present, the non-forensic process may be employed. There are significant cost differences between the two processes.
Other technical decisions provide the opportunity to match the appropriate process to the data gathered and the circumstances of the case in order to realize tremendous cost savings. Such decisions include determinations about data pre-processing, native-to-image format conversion, and document/data review and production.
Hiring Discovery Counsel accomplishes several important goals. First, the use of Discovery Counsel eliminates the inefficiency created when all outside counsel engage in the same type of discovery activities. Likewise, Discovery Counsel may be able to employ cost-saving measures, such as contract review attorneys when appropriate. Finally, Discovery Counsel can insure that the appropriate technologies are employed so that unnecessary expenses are avoided. In summary, Discovery Counsel can bring about tremendous reductions in the litigation budget while at the same time delivering professional services.