In his recent article, Ralph Losey makes a compelling argument for big law firms to completely outsource their litigation support departments to a single dedicated provider. It made me consider whether those same arguments can be applied to corporate legal departments and if this kind of sole source scenario can hold up for small to midsized firms? The AmLaw 100 seems to either invest heavily in eDiscovery infrastructure (e.g. Fulbright, Morgan Lewis, Jones Day, etc) or to outsource all their major matters. Currently, most firms still handle their small and contingency litigation in house with legacy tools. The relatively recent trend of true global cloud solutions and all in pricing options has made it more practical for firms to relinquish those low volume processing and review capabilities. However, I do want to point out that few firms possess the enormous bargaining leverage brought to bear by Jackson Lewis’s yearly volume and Ralph’s public endorsement. Kroll Ontrack’s investment in this relationship means that even small Jackson Lewis matters, will have consistent project management and a ready escalation path to address the inevitable eDiscovery issues. Going all in with a single provider makes sense when the relationships are ‘too big to fail’. My experience in remediating eDiscovery provider relationships that have gone bad, has made me recommend against clients putting all their eDiscovery eggs in one basket. Kroll Ontrack, D4 Discovery and many other national providers now have the burst capacity to handle the largest collections, but a little bit of competition keeps them from taking your business for granted and will give you options. Beyond the sole provider issue, does it make sense for corporations to outsource all litigation support capabilities?
Although non-legal eDiscovery is arguably not the core competency of most law firms, it has become an accepted business process within most corporations. Corporations own the ESI and bear primary responsibility for preservation and collection efforts. Firms rarely touch ESI ‘in the wild’. Directing collections straight to a provider under old-school processing methods increases the potential time and cost associated with the initial inventory, assessment and triage of collections. Providers and consumers have developed more mature ECA workflows with checks and balances to prevent the old ‘TIFF it all’ trap. I now see inventory reports and even limited online access for collections within 12-24 hours of delivery. That makes sense for the firms, but corporations need direct access to the ESI in place to control cost, minimize risk and maximize quality in the preservation and collection scope. Some technology providers have started to offer hybrid solutions that pair tools behind the firewall with partner managed Saas review platforms. Exterro, Nuix, Symantec and more have purchasing options that fall into the ‘managed services’ bucket with their channel partners. Fundamentally, eDiscovery is a fact of life in most corporations and I have yet to see providers with mature offerings that cover the upstream litigation support needs. Eventually they will, but who wants to be an early guinea pig with litigation on the line?
Ralph Losey does make some great arguments for firms to get out of the non-legal eDiscovery business. I wholeheartedly agree that firms should focus on the practice of law and seriously evaluate their eDiscovery business model. However, I am not saying that every firm should jettison their litigation support departments. Select firms have created mature, right sized eDiscovery groups that meet client needs with defined workflows, skilled personnel and cutting edge technology. They struggle with all the ethical issues around billing, risk, fairness and disclosure that Mr. Losey has outlined. As long as you are aware of these issues and engage them conscientiously, there are firms whose practice, client verticals and specialized needs make it vital to keep those capabilities in-house. The new trend of managed service offerings may give some better hybrid options to those firms and corporations that complete outsourcing is not such a clear cut decision. With corporations increasingly moving their infrastructure to the cloud, outsourcing or hybrid solutions will become much more practical. It may be too early for most to consider, but we should all look forward to having new options to deal with the ever increasing scope and complexity of collections.