Escalating eDiscovery Costs? The Case for Using Managed Services to Combat Three Root Causes What do social media, Moore’s Law and the FRCP have in common? They’re sending eDiscovery costs through the roof. Here’s why: 1 Individuals now use social networking sites like Facebook and Twitter significantly more than email (22.7 percent vs. 8.3 percent). In fact, from June 2009 to June 2010, individuals increased their use of social networking by 43 percent. While litigators know they must include social media as a reviewable form of electronically stored information (ESI), the courts have not provided consistent guidelines on the preservation, privacy issues and admissibility of social networking data. In addition, with no clear social media privacy guidelines from the courts, eDiscovery practices are inconsistent from one law firm to another, which increases costs and turn time. 2 According to Moore’s Law, data processing speed and memory capacity will continue to double every year, as has been the case for the last 50 years. This explosive growth enables a concurrent increase in data – in both size (we now produce the same amount of data in two days as was created by mankind from the beginning of recorded history until 2003) and type (i.e., Sharepoint, wikis and cloud computing did not exist just a few years ago). Dealing with this massive data growth is driving exponentially higher litigation costs and risks. p1 3 Major amendments to the Federal Rules of Civil Procedure (FRCP) were made more than four years ago when ESI joined the list of discoverable material. Yet many litigants and most judges are still unsure about how to apply the rules to their case. To make up for the confusion, attorneys tend to exaggerate efforts by preserving and reviewing more ESI for more custodians than is necessary or cost effective. Amended rules that were intended to create standards and drive efficiency have, in most cases, done the opposite. In 2009 alone, 46 sanction awards were ordered for violating discovery requests – a 920 percent increase in sanction awards over the previous year. Social media, Moore’s Law and the FRCP Amendment aftermath make eDiscovery costs and required resources difficult to estimate and control. Plus, without the staff and technology in place to mitigate risk, the ever-changing legal landscape works against litigants. In fact, corporations and law firms may receive severe sanctions if they fail to delegate eDiscovery to appropriate legal counsel. In 2009 alone, 46 sanction awards were ordered for violating discovery requests – a 920 percent increase in sanction awards over the previous year. One proven way to reduce cost and risk is to use an eDiscovery managed service. eDiscovery Managed Services Achieve Better Predictability and ROI The legal industry has witnessed an avalanche of new software tools and platforms intended to improve productivity and reduce costs by reducing the volume of data and documents for human review. Gartner estimates the eDiscovery software industry at close to $1 billion, and growing fast. While software tools have matured, without the process, people and infrastructure to support new technology, eDiscovery can only get more complicated. For instance, the direct and indirect costs associated with running new software are often grossly underestimated, especially because selecting and implementing tools, building workflow, and managing and training personnel on new platforms are not core competencies of most enterprises and law firms. With the opportunity for efficient technology comes the challenge of driving value from software such as Clearwell or Relativity. Unfortunately, many corporations and law firms move forward with an internal software purchase before ensuring the solution can address their future legal matters as well as their current ones. This results in software that is not effectively deployed, wasting valuable time and money. Failure to plan for potential eDiscovery tasks significantly increases risks and costs for enterprises, at both the legal and IT levels. A managed services provider can deliver proven processes and methodologies, enterpirse-class technology, infrastructure and a fixed-price approach to reduce average client eDiscovery costs by 50 percent. One solution to achieve a better return on investment (ROI) and improve efficiency is to partner with an eDiscovery managed discovia.com | ©Discovia 2013 services provider instead of building the function in-house. A managed services provider can deliver proven processes and methodologies, enterprise-class technology, infrastructure and a fixed-price approach to reduce average client eDiscovery costs by 50 percent. The results are dramatic cost savings, increased visibility, control and better defensibility. In essence, corporations and law firms need a “virtual eDiscovery function.” Five Important Considerations for Selecting an eDiscovery Partner Managed Services: Repeatability in an Unpredictable Industry When considering in-house discovery, it’s impractical to build true end-to-end capability with a limited number of people dedicated to the cause – not to mention the costs associated with switching platforms if the original technology fails. The lack of ownership and investment “cap” from sponsors is another deterrent when insourcing eDiscovery. Partnering with more than one service provider is also generally suboptimal. The process and communication integration required for truly efficient eDiscovery management simply can not be attained with multiple providers. Rather than try to achieve an unattainable level of organizational commitment or partner with multiple providers, corporations and law firms are more likely to drive down cost and mitigate risk when using a repeatable, fixed-price model from a proven eDiscovery provider. Several Fortune 500 corporations and AmLaw 250 firms have realized an average cost savings of 50 percent and overall improvement in efficiency with Discovia’s managed eDiscovery services. For example: 1Expertise - Does your service provider have expert eDiscovery practice leaders and consultants and a proven track record? • A Fortune 500 Corporation came to Discovia after they invested hundreds of thousands of dollars in a software tool they didn’t have the people, process or infrastructure to support. • A Fortune 100 Corporation had neither the budget nor the infrastructure to build the function internally, but wanted an efficient eDiscovery process in place. • A senior attorney on a high-profile case wanted to counter the extreme inefficiencies of his AmLaw 100 Firm’s software. 2Methodology – Is there a methodology to provide a repeatable, scalable process that provides for efficiency and defensibility? 3Innovative, Enterprise Class Technology – Does the managed service provider have deep relationships with enterprise-class software providers, stay on top of emerging technology and trends, and leverage technology to its full potential? 4Infrastructure – Will your eDiscovery partner host your data in a secure enterprise-class infrastructure with SAS 70 compliance and disaster recovery? 5References – Does the partner have references and case studies with quantifiable cost and return-on-investment figures? About Discovia: Discovia is the first eDiscovery service provider to deliver a fixed-price managed service that enables Fortune 500 corporate legal departments and law firms to gain a worldclass eDiscovery function without building it. The outcome – dramatically reduced litigation costs (over 50%), better control and visibility, and defensible results. Discovia’s clients include Oracle, T-Mobile, and Yahoo! as well as more than 100 AmLaw 250 law firms. Founded in 1998, Discovia is a privately held company based in San Francisco. 100 California Street, Suite 800 San Francisco, CA 94111 p415.392.2900 f415.392.2902 discovia.com p2 ©Discovia 2013
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