Keeping Better Track

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CFO Studio Magazine, Fall 2011
By Johanny Olmedo and Adam Algaze, Update Discovery Co-Directors

E-discovery can offset the challenges of ESI explosion, changing regulations, and economic upset, says Update Discovery. 

LIFE FOR THE CFO has never been more challenging. As the downward spiral in the economy continues, CFOs are focusing on spending less money and cutting costs where necessary. However, the explosion of electronically stored information (ESI) and changing regulatory landscape, together with the turbulent economy, are creating a perfect storm of rising, out-of-control litigation costs. CFOs can gain better visibility and control in company litigation expenditures through new cost and efficiency discovery management models. Alternatives to traditional discovery can help CFOs take back control of litigation spending while remaining highly collaborative with outside counsel.

 

Cut Back on Collection

Discovery often goes off the rails cost-wise during the stage known as collection. There is a tendency to over-collect documents in an effort to make sure that all documents are produced and reviewed.

There are two main methods for making sure collection is done properly, which save on costs as well as prove to be defensible when questioned by the opposing side: conducting interviews with custodians of documents and using targeted collections in order to avoid over-collecting.

Let’s say you are working on an employment lawsuit for which you need to collect all documents relating to an employee we’ll call John Doe. The custodian of the documents is John’s manager, Jane smith. Instead of collecting all emails and server documents from Jane, try spending a short time with her. You should be able to retrieve what is likely the most relevant and responsive documentation by asking a few short questions, such as:

Where do you typically save documents relating to employees?

Do you keep special email folders relating to employees?

Do you save documents on your hard drive?

Are there any terms or keywords that you use to identify John Doe, other than his name?

Once you have answers to these questions, you can use targeted searching to collect the relevant documents. For example, if the answer to Question 2 was yes, then, instead of collecting all of Jane’s emails—which could total thousands of documents—you can collect only the folder that contains documents relating to the employee. By using this simple method, you should be able to reduce the data set by more than 90 percent.

Of course, any collection or search term to be used should be discussed with the opposing side. By conferring with the other side, you can save yourself from later discovery disputes because the collection process was already agreed upon.

Use Culling and Review Tools

The amount of ESI has more than quadrupled in the last 10 years, creating a need to find ways to reduce the reviewable set. Several approaches can be taken to minimize significantly both the amount of data and the overall discovery costs in this stage. Early Case Assessment (ECA) is the process of understanding what is in your data set, and performing analysis of the data to reduce the amount of data for review.

Let’s say Company A has collected a million pages of documents. In the older models, all of the documents would be reviewed. However, by using ECA tools such as Clearwell, Company A’s discovery expert can find out which documents are most relevant, who the most frequent custodians are, and the top keywords throughout all the documents. Additionally, emails from mass mailers, such as wsJ.com, can be removed from the corpus.

Following culling the documents using ECA, Company A only has 200,000 documents to review. This 80 percent cut is typical when the culling strategy is used.

 

Manage Document Review

In the past five years, there has been an explosion in the market of e-discovery review software. It is important to understand what the ultimate strategy of your review is before selecting the tool. Over the past year, Fortune 500 corporations spent billions in document review alone. Document review requires attorneys to assess and determine a document’s relevance or responsiveness in regard to the litigation at issue. If you’ve ever experienced document review projects, you’ll know that this is the most expensive phase in discovery.

As former in-house employees responsible for a Fortune 500 corporation’s discovery department, update’s team members have spent countless hours trying to reduce the cost of litigation; as a result, we’ve created strategies that have saved millions of dollars a year. Despite the fact that law firms employ people with the sharpest minds, document review can be outsourced. In the traditional model, an army of associates would be assigned to perform document review and/or manage the document review process. On its face, this model makes sense—intelligent attorneys familiar with the facts of the case read the documents and make decisions as to relevance and privilege. However, this scenario can be extremely costly. A great solution to reducing the cost is to use discovery vendors who are experienced in managing reviews.

Referring to the earlier example of Company A, let’s say that after culling, you have 200,000 potentially responsive documents to review. Instead of having your law firm review the documents, outsource the review to a managed review company, which provides a discovery expert to help your firm prepare the proper review strategy, assemble a document review team, monitor the productivity and accuracy, and make sure that deadlines are met. Outsourcing to a managed review company is typically 50 percent of the cost of traditional document review.

The results of these current models speak for themselves: significant reduction in litigation time, resources, and cost. As a CFO, you want predictability in process as well as cost. Following new models for discovery will allow you to achieve that goal.

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