Many legal teams lack the technical knowledge and skills necessary to navigate the tricky shoals of e-Discovery, resulting in significant and unnecessary legal costs, according to a recent survey of federal judges.
According to the survey, conducted by e-Discovery software provider Exterro, two-thirds of 22 federal judges polled said they only “somewhat agree” that lawyers possess the legal and technical knowledge necessary to counsel clients on e-Discovery matters effectively.
The other one-third said they “didn’t agree” with that statement at all.
“There is an extraordinary gap between judges’ expectations of what lawyers should know and what the lawyers, in fact, know,” says retired Magistrate Judge John Facciola of the District of Columbia. Another survey respondent put it more succinctly: “Frequently, knowledge about e-Discovery is asymmetrical, with one side having no clue.”
That’s a “pretty scary and damning” observation, says Bill Piwonka, head of marketing at Exterro, “because if that’s the case, one side has a significant advantage in their ability to win their case.” It also suggests that the other side is not representing its client effectively, he adds.
From a practical standpoint, this means corporate counsel must improve their e-Discovery knowledge by understanding more efficient ways to collect and preserve electronically stored information (ESI).
One way to address this competency gap is for in-house and outside counsel to work together to better understand what ESI exists on the company’s systems. Such collaboration is important, as indicated by the 32 percent of judges who cited “no or poor communication between the parties” as the biggest source of e-Discovery problems. Facciola advises that both in-house and external counsel need to answer the following questions:
What information do we have to collect?
Where is the data kept?
Who are the custodians of that data?
How are we going to collect and review it (presumably through technology-assisted review)?
How should these responsibilities be divided?
The majority of judges (55 percent) said that most e-Discovery mistakes occur at the identification stage, because legal teams often don’t take the time to understand e-Discovery requirements.
“There is an extraordinary gap between judges’ expectations of what lawyers should know and what the lawyers, in fact, know.”
Magistrate Judge John Facciola (retired), District of Columbia
“A lot of benefit could be gained if there were more cooperation early on and if there was more knowledge about e-Discovery,” Piwonka says. For example, he says, “what are the right search terms? What’s the right scope and proportion of documents that really matter?”
The risks of ignoring e-Discovery issues in the early stages of litigation can lead to irreversible damage, such as destroying data that should have been preserved, said Joy Conti, chief judge of the Western District of Pennsylvania, who participated in the survey. Loss of data can occur if a company experiences a routine changeover in its computer systems, for example, and the hard drive holding the data is destroyed.
Additionally, e-Discovery mistakes commonly occur during the preservation and collection stage, the judges warned. In particular, mistakes occur when legal teams fail to implement procedures to ensure that all relevant data is preserved and collected.
Miscommunication between internal team members is another common cause of e-Discovery problems. “Too often—I would say in virtually every case—the communication is done by e-mail,” Conti said. “That’s fodder for creating poor communication and miscommunication.”
The majority of communication nowadays happens over e-mail, Conti added. As a result, if a problem arises, the problem might never get fully resolved, “because it’s never fully discussed and talked out,” she said.
The report also explored potential ways that corporate legal departments can cut down on legal costs. In particular, almost half the judges said they’re surprised at how rarely legal teams take advantage of privilege waiver, considering that the cost associated with inadvertently producing privileged documents is a common e-Discovery frustration among attorneys.
ROOM FOR E-DISCOVERY IMPROVEMENT
In the following charts from the Exterro survey, judges rank what stage the most common e-discovery mistakes occurred in their courtrooms, the most common e-discovery problems in the courtroom, and where counsel needed the most improvement (in order below).
Under Rule 502(d) in the Federal Rules of Evidence, if privileged documents are inadvertently produced, one party can ask the other to return that information. “The rule permits that to be the case,” Facciola says. “It’s shocking how such orders are not entered into in every case.”
“I’ve had several cases where the amount in controversy is $1 billion, or greater,” said Chief Magistrate Judge Frank Moss of the Southern District of New York. “Even in those cases, counsel had never on their own raised with me a 502(d) order. When one has been entered into, it’s because I’ve raised it.”
The questions legal teams should ask themselves, Facciola advises, are “What sort of agreements can you reach with the other side under 502(d)? What kind of a clawback provision should you have?”
Companies have an important role to play by establishing a strong policy regarding the creation of privileged information at its inception, Facciola said. For example, how is communication with counsel safeguarded? The more people who review those communications with counsel, the more likely the chance of somebody saying information isn’t confidential, Facciola says. “The whole point is to come up with a process that is reasonable, efficient, and defensible.”
Legal departments can also try to curb costs with predictive coding technology, particularly since companies are retaining increasingly more data. As one judge observed in the survey, “Counsel used to reference ESI by the equivalent in the number of pages; now they discuss terabytes.”
Predictive coding technology uses techniques such as keyword searches and filtering to reduce the number of irrelevant and non-responsive documents to minimize data volumes.
Prior to collection, for example, legal teams can apply predictive algorithms to classify documents and use the results to more accurately and rapidly assess the nature and scope of a matter, “which gives them the ability to make pretty significant strategy decisions very early in the process,” says Piwonka.
If legal teams choose to use predictive coding technology, “the follow-up question is, ‘What is the best system to use for our needs?’” Facciola says. To choose the right e-Discovery services provider, companies should compare and contrast each vendor’s capabilities and gather references for comparable jobs the vendors have done.
The most important message to garner from the survey is to think, and think early. “Consider e-Discovery as a process, because if you consider it as a process, it’s something that can be managed, measured, and ultimately optimized,” Piwonka says. “Organizations should have a plan for every case—have a playbook or checklist for what they’re going to do and how they’re going to interact with opposing counsel.”