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1 Future Law Office: Best Practices for Taming e-discovery maximize results minimize costs legal research e-discovery: Escalating Costs, Increasing Scope Page 1 Developing a Strategy Page 2 e-discovery Response Program Essentials Page 4 futurelawoffice.com The Advantages of Utilizing Project Professionals Page 6
2 Table of Contents Introduction...1 e-discovery: Escalating Costs, Increasing Scope...1 Developing a Strategy...2 Best Practices: How One Legal Department Manages e-discovery...3 e-discovery Response Program Essentials...4 The Advantages of Utilizing Project Professionals...6 Conclusion...6 About Future Law Office...7 About Robert Half Legal...7 Appendix A: Legal, Staffing and e-discovery Experts....8 Appendix B: Endnotes...8
3 Introduction Robert Half Legal s Future Law Office research program tracks important trends and developments in the legal field. This year, we examine how law firms and corporate legal departments are responding to economic pressures and changes in client expectations. Future Law Office: Best Practices for Taming e-discovery explores how legal departments are proactively managing e-discovery while limiting risks and containing associated costs. The report includes the insights of Robert Half Legal s staffing and recruiting professionals, and features interviews with other well-respected experts in the legal field. Additional information, including a video interview with attorneys Charles Volkert, executive director of Robert Half Legal and Joel Wuesthoff, a director with Protiviti Inc., and a leader in the firm s Litigation, Restructuring and Investigative Services group, can be found at e-discovery: Escalating Costs, Increasing Scope Electronic discovery generally consumes the lion s share of time and resources for firms involved in pretrial litigation preparation. According to a Litigation Cost Survey of Major Companies, prepared for the 2010 Conference on Civil Litigation at Duke Law School, the total annual aggregate spend on litigation by large corporations was $4.1 billion dollars. One-quarter of companies outside legal fees were for costs related to attorney review and discovery. 1 It seems likely e-discovery- and litigation-related expenses will only continue to escalate in the coming years. Analysts predict that the e-discovery market will hit $1.5 billion by In the face of this rising tide, legal departments are seeking ways to minimize e-discovery risk and manage costs. Yet for many organizations, e-discovery remains a reactive process. Few companies have implemented formal, proactive programs that enable them to manage the e-discovery process efficiently and cost-effectively. When it comes to spending on e-discovery, planning is paramount to managing costs, notes attorney Joel Wuesthoff, a director with Protiviti Inc., a global consulting firm. Based in New York, Wuesthoff is a leader in the firm s Litigation, Restructuring and research legal Investigative Services group. Legal departments are realizing that the downstream cost is often a direct corollary of how proactive they ve been in managing the data the company is required to keep and purging the excess, says Wuesthoff. 3 Legal departments are realizing that the downstream cost is often a direct corollary of how proactive they ve been in managing the data the company is required to keep and purging the excess. Joel Wuesthoff, director, Protiviti e-discovery Future Law Office Robert Half Legal 1
4 Developing a Strategy J. Henry Walker IV, partner at Kilpatrick Townsend & Stockton LLP, cautions against legal departments handing over every aspect of e-discovery to an outside law firm or service provider. The client absolutely needs to be integrally involved in the process, he says. If the department has the expertise to lead the process in-house, do it. If not, in-house counsel still needs to be engaged and apply good project management skills to make sure the project stays on track. 4 The most successful companies are proactive about strategizing for e-discovery, says attorney Charles Volkert, executive director of Robert Half Legal. Part of this strategy involves determining how e-discovery initiatives will be managed, he notes. Unless a legal department is large enough to have an in-house expert, the best solution is to partner with a third party that has the necessary expertise, Volkert says. Maybe that means hiring a consultant who can take the department all the way through the project. Or maybe it means selecting items off the e-discovery menu that the department would like additional assistance with. Whatever the case, it s very important to find a resource the department can work with. 5 The most successful companies are proactive about strategizing for e-discovery. Charles Volkert, executive director, Robert Half Legal Lawyers were asked, What is the greatest challenge faced by your law firm/company when it comes to e-discovery project management? Their responses: Assembling resources 12% Collecting data Managing risks 7% 25% Keeping pace with legislative changes/court decisions 6% Having trained personnel for e-discovery 2% Other 2% 19% 21% Containing costs Don t use e-discovery 6% Don t know/no answer Source: Survey of 350 lawyers among the largest law firms and corporations in the United States and Canada. The survey was commissioned by Robert Half Legal and conducted by an independent research firm. Future Law Office Robert Half Legal 2
5 Best Practices: How One Legal Department Manages e-discovery Whenever AMEC has a case that requires e-discovery, Scott D. Nader, the company s legal counsel, evaluates costs and determines how much of the e-discovery risk management they can do internally without becoming a litigation company. 6 We can t completely manage e-discovery ourselves, nor can we give it all to a law firm and pay $400 an hour for a first-year associate to look at it, he says. The legal department will do one-off employment termination or a three- to four-custodian review itself, but generally does not handle larger matters internally. Nader has developed a few strategies to effectively manage e-discovery, including: Bringing the company s IT department on board. The most important thing to do is integrate the IT department into the legal function. You need points of contact who are responsible for litigation holds of documents. AMEC uses forms to track and do data mapping to figure out which custodians hold relevant information and where it is located. It s also important to cross-train lawyers and IT professionals, Nader notes. Lawyers need to understand the architecture of the storage system you re using. And we need to teach senior IT people about litigation requirements, so neither department is surprised when things come up down the road, he says. Ask your outside firm for better pricing models. We need to look at how to break an e-discovery problem into small bites and price it right with an outside firm to make sure we re getting a reasonably accurate set of deliverables, says Nader. Maybe you do that through a reduced rate for document review and a higher rate for high-end legal thought. That s what we re coming to our outside firm for. legal minimize costs research e-discovery hiring Future Law Office Robert Half Legal 3
6 e-discovery Response Program Essentials In addition to the recommendations provided by Scott Nader and Charles Volkert, Joel Wuesthoff and Henry Walker offer the following suggestions for legal departments that are setting up e-discovery response programs: Start with records management. Companies that do not build a strong records management plan typically experience greater e-discovery costs and risks. So, in terms of controlling expenditures, records management is the key piece, notes Wuesthoff. You need to know what information or data the company has, where it s stored, who owns it and why you re keeping it. And you have to have a process in place for keeping or getting rid of it if you don t need it, he says. Don t forget about off-site data. A simple example is hosted by an outside provider. Does the provider retain copies of messages? And, if so, then for how long? Wuesthoff says. In the future, we ll see a lot more discovery of voice mail, , text messaging and social media applications, and much of it will be housed outside the company. A report by The 451 Group, which analyzes IT innovation for businesses, predicted that cloud archiving (storage of corporate data off the company premises) will grow from a $193 million to $664 million market by Leverage technology. Companies should implement technology that automates the preservation, management and maintenance of electronically stored records, according to Wuesthoff. This makes it easier for the legal department to classify records when responding to litigation. Have a data retrieval plan. Legal departments should have a thoughtful process, says Walker. It s all right to preserve documents broadly, but then in-house counsel has to do its absolute best to narrow the scope of what they bring in to be reviewed and processed. Know ahead of time how to handle the data. Critical to the e-discovery process is to have a plan early on as to how you re going to handle the data, Walker says. Then you can execute that plan and modify it as necessary, making sure you have the best resources in place at the right prices. Obtain e-discovery training. Lawyers have a duty to be competent and educate themselves so they can do what s correct and reasonable when it comes to e-discovery issues, notes Wuesthoff. Provide clear guidelines for employees. Employees shouldn t be making judgment calls about which documents they should or shouldn t save, counsels Wuesthoff. One goal of the e-discovery program is to remove subjectivity. Take decision-making out of the hands of individual employees and move it to the legal department. Exercise caution when handling e-discovery in-house. The more work a legal department does itself, the more risk issues it s creating and the more likely it is that in-house lawyers will be called on to testify later, Wuesthoff notes. It s not a good position to be in testifying about your own methodologies. Your bias will be challenged. Lawyers have a duty to be competent and educate themselves so they can do what s correct and reasonable when it comes to e-discovery issues. Joel Wuesthoff, director, Protiviti Future Law Office Robert Half Legal 4
7 Lawyers were asked, For which of the following matters are you most likely to hire lawyers on a project basis versus hiring full time? Their responses: * United States Litigation Discovery Bankruptcy/foreclosure 14% 17% 35% Intellectual property Labor and employment General business/corporate law Other Don t know /no answer Do not hire on a project basis 3% 5% 10% 13% 13% 33% Canada Litigation 37% General business / corporate law Labor and employment Intellectual property Discovery Restructuring / insolvency Other Don t know /no answer 14% 11% 9% 6% 6% 9% 7% Do not hire on a project basis 32% *Multiple responses were permitted. Source: Survey of 350 lawyers among the largest law firms and corporations in the United States and Canada. The survey was commissioned by Robert Half Legal and conducted by an independent research firm. Future Law Office Robert Half Legal 5
8 The Advantages of Utilizing Project Professionals Any stage of e-discovery that requires a large number of lawyers or support staff whom the department does not have in-house is a potential area for project professionals to handle, notes Volkert. Large-scale litigation matters, mergers and acquisitions, due diligence those are all areas where it may make sense to use a project team in a dedicated space, he says. Legal departments should consider where they are in the process, how much data they have to review, how they re going to cull it down to a manageable level for review, and how they ll get through all of it. Knowing when to outsource is a critical judgment call for legal departments. Complex litigation that falls outside a single jurisdiction, spans borders or involves complex databases, social media or cloud computing is a prime candidate for handing over to outside counsel or outsourcing to experts who can navigate the legal, technical and procedural issues, says Wuesthoff. In addition, certain aspects of e-discovery are especially conducive to being outsourced, says Walker. The core gathering process from custodians can be handled by a third party, as well as the physical processing of documents for review. And, of course, the actual review itself is another area that s typically outsourced. Departments can realize considerable cost savings in those areas. Conclusion Moving forward, demand will only increase for legal professionals experienced in organizing and managing e-discovery initiatives. In addition to seeking individuals with such expertise, law firms and legal departments will need to implement tools and processes to handle data before and throughout the life span of a litigation case. The most successful companies will be proactive about planning for e-discovery and implement strategies that allow them to minimize risk to the organization while controlling costs. To find their way through an ever-changing e-discovery landscape, companies should map out flexible guidelines and processes that are predictable, reasonable and defensible. legal research minimize costs e-discovery Future Law Office Robert Half Legal 6
9 About Future Law Office Best Practices for Taming e-discovery is part of the Future Law Office project, an annual research initiative conducted by Robert Half Legal that examines key trends in the legal profession. This report is based on interviews with experts in law firm and corporate legal department management, as well as our own legal staffing specialists throughout North America and other professionals in the field of law. Our findings also are based on information from state and national legal publications and associations. Robert Half Legal regularly commissions surveys of lawyers on a variety of workplace and legal management issues. Relevant statistics from these studies, which include responses from lawyers among the top law firms and corporate legal departments in the United States and Canada, are cited throughout this paper. All sources, including experts and articles consulted by Robert Half Legal, are listed in the Appendices. About Robert Half Legal Robert Half Legal is the premier provider of highly skilled legal professionals for law firms and corporate legal departments. We place lawyers, paralegals, law clerks and legal support professionals on a temporary, project and full-time basis in the United States and Canada. The company has built long-standing relationships with leading professional associations, including the Association for Certified E-Discovery Specialists, Association of Corporate Counsel, Association of Legal Administrators, and Minority Corporate Counsel Association. Robert Half Legal is a division of Robert Half International, a recognized leader in professional staffing services since Future Law Office Robert Half Legal 7
10 Appendix A: Legal, Staffing and e-discovery Experts Charles A. Volkert, Esq., executive director, Robert Half Legal Scott D. Nader, legal counsel, AMEC J. Henry Walker IV, partner, Kilpatrick Townsend & Stockton LLP Joel Wuesthoff, Esq., director, Protiviti Inc. Appendix B: Endnotes 1. Litigation Cost Survey of Major Companies. Lawyers for Civil Justice, Civil Justice Reform Group, U.S. Chamber Institute for Legal Report, presented to the Advisory Committee on Civil Rules, Standing Committee on the Rules of Practice and Procedure, Judicial Conference of the United States at the 2010 Civil Litigation Conference, Duke Law School. 2. Koblentz, Evan. E-discovery Market Predicted to Reach $1.5B in Law Technology News, May 23, Interview with Joel Wuesthoff, Esq., director, Protiviti Inc., Jan. 13, Interview with J. Henry Walker IV, partner, Kilpatrick Townsend & Stockton LLP, Jan. 31, Interview with Charles A. Volkert, Esq., executive director, Robert Half Legal, Jan. 7, Interview with Scott D. Nader, legal counsel, AMEC, Dec. 13, Cloud Archiving: A New Model for Enterprise Data Retention, The 451 Group, October research results maximize e-discovery Future Law Office Robert Half Legal 8
11 roberthalflegal.com 2884 Sand Hill Road Menlo Park, CA Connect with us: 2011 Robert Half Legal. An Equal Opportunity Employer. RHL-1111
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