Measure Twice, Cut Once – Downsizing Legal Departments

Migrated from eDJGroupInc.com. Author: Greg Buckles. Published: 2010-01-26 17:24:21  2009 has been a hard year for corporations of every size. The wave of high publicity eDiscovery sanctions in 2007-2008 had General Counsel’s focusing on reducing discovery risk before the economic down turn. Now they are tasked with cutting departmental budgets and the ever-growing cost of discovery. So we have gone through a dramatic transition in the market where our primary consumers have flipped from a proactive strategy to a reactive retrenchment during the last year. In late 2008, providers reported that corporate clients were delaying or even abandoning long term projects such as litigation readiness, archiving, endpoint security and anything else that was not an absolute necessity.All of this doom and gloom pressured some larger corporations to consider complete restructuring of their litigation departments. A large pharmaceutical corporation even cut went so far as to slash their nationally known discovery infrastructure in favor of a single source contract to a large consulting firm. Although that strategy definitely cut the legal department’s overhead, only time will tell if this will actually yield any real long term savings.The old carpenter’s rule of ‘measure twice, cut once’ speaks to the importance of defining and measuring existing processes before you implement changes. If you do not know the time, cost and data volumes associated with any or every matter, then how will you know if your changes actually accomplish your goals?During overall corporate downsizing, the temptation is to shift a large portion of internal discovery overhead to outside counsel, a consulting firm or to a single source discovery provider. Outsourcing discovery makes it easier to allocate costs directly to specific business unit cost centers or even to excess umbrella insurance policies where coverage exists. But the price of this cost shifting can be a decrease in efficiency and an increase in risk with the loss of a centralized, standardized process.Publically traded corporations have recognized litigation is part of the price of doing business in America. Discovery should not be a fire drill when you know that it is inevitable. It should be a normal part of how you manage your information assets. Like any good business process, it should be measured, tracked and analyzed for continual process improvement. After all, if you know the actual cost for a vendor to collect 3 years email from fifty custodians in your environment, then you can make a real Return on Investment (ROI) calculation against the cost of implementing an email archive or collection appliance.The key is to treat discovery as a business process to be measured, reported and evolved. Every matter seems to have unique requirements, risks and costs, but making the effort to measure these will help to find the commonalities and create a mature litigation response system.