Migrated from eDJGroupInc.com. Author: Greg Buckles. Published: 2011-06-10 15:53:45  A new eDiscovery malpractice lawsuit was filed this week, J-M Manufacturing v. McDermott Will & Emery.  The central issue is the production of 3,900 privileged documents in a 250,000 document qui-tam investigation. Nate Raymond at Law.com/LTN gives a good summary here.  This case was definitely the hot topic at last night’s Houston b-Discovery social meeting. In reading the complaint, a couple things jumped out at me.

  1. The review covered agreed upon search term hits from 160 custodians. Only 250,000 documents were produced , which is about 1,500 docs/custodian. The time range and search terms were not specified, but this already feels like a very focused, targeted data set given that I tend to see 15,000+ email per year for directors and key employee collections.
  2. Roughly 1.5% of the final production was supposedly privileged documents. Even a classic random sampling by McDermott attorneys should have raised a red flag. The complaint says that McDermott attorneys ‘spot checked’ the final production from the service provider, but does not give any specific methodology. My interpretation is that someone might have glanced through or randomly jumped around in the production set, but there was no organized quality control.
  3. Although there are 100 DOES (the service provider and contract attorneys) named in the suit, the primary target is McDermott who had the ultimate duty to ‘render legal services competently’. After all, the service provider CANNOT actually render legal services, even if it is providing contract attorneys.
  4. Interestingly enough, McDermott is also being accused of having ‘marked up’ the provider review fees. This exposes a serious ethical issue that our industry has chosen to ignore for far too long. Without specifics, I can only assume that this means that McDermott padded the provider bill or increased the reviewer rates when the bill was passed to J-M.

In all, this sad matter should be a call to action for firms, parties and providers alike. Review costs still dominate eDiscovery budgets and represent the largest economic burden in civil lawsuits. I have been a defense expert in False Claims Act investigations such as this one, and I can understand the intense time pressure that can be brought by the US Attorneys office to produce requested hits. But corporate defendants and defense firms must be cognizant of the potential civil implications of bulk productions. Everything that you give to the government will be requested by the inevitable civil plaintiffs unless it is designated under a protective order.It would be easy to throw the provider under the bus or blame the contract attorneys. This would be unfair without a full investigation that dug into the instructions and supervision provided by McDermott. It appears from the complaint that J-M knows who was ultimately responsible for protecting their privileged ESI.

  • So who selected the review provider?
  • How was the contract (if there was one) negotiated?
  • Did J-M approve the provider and rates?
  • Was J-M corporate counsel involved in the review instructions or ‘spot checking’?

Dedicated review firms like DiscoverReady and others have years of experience and productized workflow to address exactly these issues. I hope that this case serves as a wake up call that outsourcing does not always transfer liability. With so many corporations trying to manage litigation as a business process, I am seeing them take over more and more of the review process. Will this make them pause to consider the assumed risk or will it encourage them to enact a standardized, documented process and technology solution?

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