Migrated from eDJGroupInc.com. Author: Greg Buckles. Published: 2017-05-01 20:00:00Format, images and links may no longer function correctly. 

My thanks to a peer for shooting me this scoop. I dusted off my PACER password and found DTI’s complaint and the final order transferring this fascinating story from Virginia to NY. Forgive my syntax, but the cite is Document Technologies, Inc. et al. v. LDiscovery LLC d/b/a KrolLDiscovery, Civil Action No. 1:17-cv-405-AJT/IDD E. D. Va. Complaints are only one side of any story, but DTI’s side of this story claims that  LDiscovery solicited four top Epiq reps to download proprietary data and entice former customers to LDiscovery after their one year non-compete expired. All the M&A activity in the eDiscovery market (check my ITLA webinar) results in lots of personnel turnover and unfortunately gives rise to the temptation to take advantage of that uncertainty to poach top employees and their long term accounts. I am sure that I will do a more in depth dive into this case as it gathers steam, but I wanted to get you some of the fun claims from the DTI complaint:

  • As early as June 2016 (when the DTI-Epiq acquisition became public), LDiscovery President Christopher Weiler communicated with 4 top Epiq reps until the four simultaneously resigned from DTI on January 5, 2017.
  • One of the Former Employees used software to wipe his DTI issued laptop before turning it in.
  • At least two of the Former Employees downloaded documents to their laptops and attached personal flash drives shortly prior to their resignations.
  • Another deleted all texts and call logs from his DTI issued mobile phone. Which is better than the one who said that he ‘lost’ his mobile phone. eDJ says to start looking into cutting edge mobile device management and remote backup systems.
  • The Smoking GunOn their DTI-issued computer, at least one of the Former Employees received and reviewed a Dec. 1, 2016 “Proposed Final Term Sheet” from LDiscovery that purportedly details the full compensation package totaling $24 million in potential signing bonuses, salary, COBRA costs and a “transaction bonus” if LDiscovery changed hands. eDJ says that even with decades of eDiscovery experience a copy of the Smoking Gun document survived attempts to delete it. Remember this while designing your ESI lifecycle. To paraphrase Jeff Goldblum in Jurassic Park, “ESI finds a way.”
  • Former Employees obligated to repay full signing bonus if they did not show up for work after one year “Sit Out” period. Makes you wonder if they will have to pay them back now that DTI has filed suit.
  • LDiscovery agreed to indemnify Former Employees against litigation by DTI and provide up to $50,000 in legal fees covering the legal advice and counsel provided for the agreement terms.
  • DTI alleges $5,000 per damaged/wiped/altered device in forensic recovery expenses. eDJ bets that someone at DTI was smart enough to bring in an external expert for this investigation because of the potential for civil/criminal charges.

This sordid tale of backline wheeling and dealing by high earning execs and sales reps makes for a good read. It also reinforces one of the key take-aways from the ILTA webinar that I did with Duane Lites. Namely that mergers and acquisitions bring uncertainty and change that impact relationships. These Former Employees must have generated hundreds of millions in Epiq revenue to get this kind of compensation and risky business practices from LDiscovery. During that six month negotiation, I would bet that the Former Employees were laying the foundation of change with their long term firm and corporate clients. Suppose a litigation support manager has credible knowledge that a rep is planning on violating a non-compete or solicits their business for their ‘new company’ while still on the job? Any chance that every one of the Former Employees DTI/Epiq clients have received a nonparty preservation or discovery request covering any emails, texts or other relevant communications from these reps?

No one likes their dirty laundry aired in a lawsuit or even in a blog by a skeptical ex-analyst. But hiding bad behavior just perpetuates it. The eDiscovery market needs transparency and accountability to provide a level playing field for consumers. Ethical behavior is its own reward.

Stay skeptical my friends!

Greg Buckles wants your feedback, questions or project inquiries at Greg@eDJGroupInc.com. Contact him directly for a free 15 minute ‘Good Karma’ call. He solves problems and creates eDiscovery solutions for enterprise and law firm clients. His active research topics include analytics, mobile device discovery, the discovery impact of the cloud, Microsoft’s Office 365/2013 eDiscovery Center and multi-matter discovery. Recent consulting engagements include managing preservation during enterprise migrations, legacy tape eliminations, retention enablement and many more.

Greg’s blog perspectives are personal opinions and should not be interpreted as a professional judgment. Greg is no longer a journalists and all perspectives are based on best public information. Blog content is neither approved nor reviewed by any providers prior to being posted. Do you want to share your own perspective? eDJ Group is looking for practical, professional informative perspectives free of marketing fluff, hidden agendas or personal/product bias. Outside blogs will clearly indicate the author, company and any relevant affiliations. 

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