The volume of electronic data and the costs involved in collecting, culling and reviewing electronically stored information (ESI) are critical considerations in any litigation, large or small. Parties to a lawsuit are inevitably faced with significant litigation costs, due in large part to the burden of responding to overly broad discovery requests relating to ESI. To maximize the value of the e-discovery process, corporate counsel should ask how outside counsel plans to efficiently analyze ESI and reduce the expenses associated with e-discovery.
Some specific questions to consider:
Proportionality: Are the costs associated with e-discovery proportionate to the size of the case and the amount in dispute?
E-discovery costs that are disproportionate to the value of the underlying claims at issue in litigation are not unusual in the current landscape. Recent changes to the Federal Rules of Civil Procedure, however, provide some relief. Specifically, changes to Rule 26(b) allow courts and parties to apply a more common-sense approach to e-discovery by weighing the amount in controversy against costs of obtaining the ESI. Corporate counsel should insist that outside counsel aggressively advocate for limiting e-discovery to material that is relevant and proportional to the claims and defenses in the litigation.
Scope: Are you negotiating the use of custodians, search terms and a date range to limit the amount of data subjected to the e-discovery process?
Overly broad discovery requests can trigger the obligation to preserve, collect, process and review large volumes of data, which can be very costly and time-consuming to manage. The scope of ESI can be narrowed by identifying records custodians and applying search terms and a date range designed to target responsive ESI. When litigation involves a considerable amount of ESI, both sides have strong incentives to streamline the e-discovery process, making cooperation more likely. Working with opposing counsel puts you in a better position to limit the scope of the e-discovery process by establishing appropriate search parameters.
Preservation: What ESI do we really need to preserve, and how do we do that?
The burdens and costs of preserving potentially relevant information should be weighed against the information’s possible value and uniqueness when determining the appropriate scope of preservation. This can be a delicate balance, but one that experienced outside counsel can achieve by focusing on preserving only the ESI the parties may need for a particular matter. Agreeing on a clear preservation plan with opposing counsel early in the case can limit the volume of data you need to preserve and guard against potential spoliation claims.
Cost-shifting: Are you shifting some e-discovery costs to the other party?
Where e-discovery costs are high, there is no downside in outside counsel asking the court to shift the costs of producing ESI to the requesting party, especially where the evidence sought is marginally relevant and proportional to the issues at stake in the litigation. The Federal Rules of Civil Procedure contain specific provisions that outside counsel can use to transfer the costs incurred in collecting, reviewing and producing ESI from the responding party to the requesting party. See Rules 26(b)(2)(B) and 26(b)(2)(C) and Amended Rule 26(c)(1)(B). These rules explicitly encourage courts to take an active role in shifting e-discovery costs, thereby diminishing a requesting party’s incentive to make frivolous, overly broad requests for ESI.
Flexible staffing: Are you using a team of dedicated discovery attorneys to review the ESI? We don’t want to pay associates to review documents.
When planning for e-discovery, corporate counsel should insist on the right lawyer at the right price and require outside counsel to efficiently implement options to manage e-discovery costs without sacrificing results. One solution is to request that tasks associated with ESI review be performed by discovery or document review attorneys, who typically bill at lower rates, and are a more cost-effective and efficient alternative to delegating e-discovery tasks to associates or other attorneys. By asking outside counsel to have these resources in place, corporate counsel can standardize the approach to document review and other e-discovery tasks and optimize their outside legal spend.
Process efficiency: Should we be using predictive coding or other document analytic tools on this project?
An important consideration in reducing e-discovery costs is the use of predictive coding, also called technology-assisted review. While it may not be an appropriate alternative to the manual, linear review of ESI in every case, it can help cut e-discovery costs, streamline the process and identify relevant information more cost-effectively. Ultimately, outside counsel should conduct a cost-benefit analysis of using predictive coding, which should consider the volume of documents, the amount in controversy and the price of using a vendor’s analytic tools.
Project management: Can you prepare a budget for the ESI portion of the case?
As part of a comprehensive, disciplined approach to managing e-discovery, corporate counsel should request a budget for the ESI portion of the litigation. A budget is more than a financial estimate; it sets priorities, reflects strategy and projects staffing. It will also reveal – and tee up for discussion with outside counsel – strategic choices when it comes to the scope of e-discovery.
Value-based pricing: Are you willing to conduct the ESI portion of the case for a flat rate?
Corporate counsel who want more predictability regarding fees and are looking for ways to align pricing with business and litigation objectives should explore with outside counsel the possibility of executing the e-discovery portion of the case for a fixed fee. In appropriate cases, such an arrangement can provide an incentive to reduce the costs associated with retrieving, reviewing and producing ESI, which may not only lead to financial savings, but also eliminate billing uncertainty and ensure better value by focusing on results and efficiency.
Third-party ESI experts: Do we need an e-discovery vendor or digital forensics expert for the ESI preservation and collection, or can our in-house staff do that?
Experienced outside counsel should be able to help evaluate the capabilities of corporate personnel and weigh the risks and rewards of in-house staff collecting and preserving ESI. However, self-collection is no longer considered a best practice and, in some cases, can be more costly than using an outside vendor. In light of this, and the risks inherent in performing these tasks, up to and including sanctions for spoliation, corporate counsel should carefully consider the benefits of engaging a third-party e-discovery vendor or digital forensics expert wherever possible.