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Balancing eDiscovery Between In-house and Outside Resources

Businesses unknowingly waste millions of dollars every year in excess or unnecessary eDiscovery costs. This includes time-consuming entanglements like storing countless data collections and legal holds spread across dozens of disparate vendors and locations. Legal issues are further convoluted by having relinquished control of every new eDiscovery matter to different outside partners, all using varied approaches and tools.

These problems might sound familiar to most in-house teams. For many legal departments at large, multinational corporations, the reality of legal hold and eDiscovery is a highly outsourced, expensive, and ad-hoc system. Inflated eDiscovery costs and over-reliance on outside providers are common for several reasons:  

  • A lack of resources to implement and manage programs internally;  
  • Overly conservative or outdated preservation strategies;  
  • Infrastructure unable to support a centralized eDiscovery process; and  
  • Multiple litigation groups working independently with their own set of preferred vendors, approaches, and standards.  

In-house oversight can help contain the costs and risks associated with eDiscovery. Often, a standardized internal program that manages and limits the use of outside providers can significantly improve overall defensibility and accountability, and in turn, reduce expenses.  

[Related: Bringing eDiscovery Home: The New In Situ Reference Model] 

However, implementing such a program is potentially a weighty task and striking balance between what to send to outside partners and what to keep in-house can be complicated.  

A strategic legal hold playbook, which is often owned and executed by in-house teams, is a good starting point. And depending on the matter, it offers several important benefits:  

  • Improved strategy and insight over preservation; 
  • Reduced incidence of over-preservation (i.e., reduced risk); and 
  • Less time and money spent on outside counsel dealing with irrelevant documents.  

Once a sound legal hold strategy is in place, in-house teams often build an eDiscovery “bible” to define roles for internal groups and outside providers. This also offers guidance and consideration to help determine when to keep documents and matters in-house and when to outsource.  

While many matters are unique and processes should be examined on a case-by-case basis, many teams adopt common guidelines that can streamline most issues, including:  

  • Guidelines for counsel to conduct custodian interviews at the outset of a matter and set appropriate, case-specific parameters that may narrow preservation to only what is truly required before anything is placed under legal hold.  
  • A central, internal location to manage all legal holds.  
  • Direction for when it may or may not make sense for outside counsel to conduct first-pass review. 
  • Volume benchmarks and other variables that help determine whether review sets are sent to outside counsel or less expensive contract reviewers.  
  • When appropriate, workflows that can cull data internally after collection or reduce the volume of data sent outside the company for hosting and storage.  
  • When to apply search, privilege, and technology-assisted review best practices, as well as when to leverage advanced analytics to reduce the volume of documents that are manually reviewed.  
  • A list of preferred law firms and eDiscovery providers that have agreed to standardized pricing and service agreements. 
  • Best practices for in-house counsel to engage with outside counsel and help minimize volumes before sending documents out for hosting and review.  
  • Tracking when and where data is stored with law firms and other legal providers, and monitoring for its deletion after a case is completed.  

The guidelines above provide a clear and effective way to develop a standardized eDiscovery program for most cases. Importantly, there are exceptions that would fall outside generalized guidelines and it is critical not to be inflexible or perfunctory in each evaluation.  

[Related: Reduction in Force Records Management and eDiscovery Checklist]

On certain types of matters, these initiatives (e.g., reducing volumes sent for outside review, decommissioning unnecessary hosting, and replacing costly manual review with analytic review) have proven to provide millions of dollars in savings and significantly reduce legal and regulatory risk.  

With repeatable processes in place, counsel may keep more work and data in-house without excessively burdening internal resources. Teams can continue leveraging trusted outside partners and law firms, while also containing budgets and adding greater value to their organization.

About the Authors

Tracy McMahonTracy McMahon is director of eDiscovery at DaVita Kidney Care, as part of the company’s Information Lifecycle Governance group. She works with internal and external stakeholders to streamline processes, reduce risk, improve performance, and reduce costs.

Casey HiserCasey Hiser is a senior director at FTI Consulting, specializing in the entire eDiscovery lifecycle, forensically sound collection and preservation, data recovery, and information governance.

The information in any resource collected in this virtual library should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.