Keeping Costs DownBy Tony Kontzer | Posted 2012-07-11 Email Print
Know the Risk: Digital Transformation's Impact on Your Business-Critical Applications REGISTER >
Growing numbers of companies are using emerging e-discovery technologies to more effectively focus their document searches.
Keeping Costs Down
UTC's tale is representative of e-discovery trends, as corporate legal departments and law firms look to tap recent advances in e-discovery technologies to bring down client costs, says Nick Pace, staff behavioral scientist with Rand's Institute for Civil Justice, and author of the recent report, "Where the Money Goes: Understanding Litigant Expenditures for Producing Electronic Discovery."
"Any money being spent on litigation is bad," says Pace. "You want it to cost as little as possible for everyone."
Pace says that there's still a lot of progress to be made in the area of document review, which now accounts for 73 percent of all e-discovery costs—a fact on which e-discovery vendors are focused. One of the up-and-coming technologies that’s helping with reviews is called "predictive coding," which is designed to replace the eyes of attorneys by finding relevant documents within large volumes of data. (Spam filters are a perfect example.) But Pace says predictive coding is more effective in larger cases, in which the volume of documents renders human review cost-prohibitive and inconsistent.
With the review stage remaining such a costly component of e-discovery, corporations are looking for other creative ways to get costs under control. For instance, Abby Dodd, director of e-discovery services for consultancy DW Legal Solutions, says clients are increasingly asking for per-document or project-based pricing, rather than hourly fees, so as to make costs more predictable. She expects that cost-conscious approach to result in more offshore outsourcing of e-discovery processes.
Dodd also says that more companies are demanding that consultants have expertise working with their chosen e-discovery tools. This enables more cross-case discovery efforts and stretches e-discovery dollars.
But for most companies, the name of the game is reducing their dependency on attorneys, even in the earliest stages of an e-discovery process. Ed Goings, principal in charge of forensic technologies for KPMG's Midwest operations, says that one of the ways the consultancy has attempted to meet that requirement is by matching a variety of e-discovery tools to their strengths. That makes the collection and culling of data more efficient and, ultimately, reduces the number of hours attorneys have to spend reviewing pertinent documents.
A case in point: In a recent case involving a global retailer, Goings was asked to help respond to inquiries from U.S. and European regulators regarding a potential violation of international anti-corruption laws. It was a potentially devastating inquiry that required the retailer to investigate its data in numerous countries. That meant searching different kinds of systems, in different languages, backed by different business processes.
By using an assortment of e-discovery tools deployed at the retailer's various locations to more effectively target relevant users and their data, Goings estimates KPMG was able to save more than $10 million compared with what the broad-brush approaches of the past would have cost.
The ability of new technologies to replace attorneys in the early stages of e-discovery and reduce their role in later stages has had a huge impact on KPMG's e-discovery client profile. Going says the ratio of corporations to law firms in his client mix has completely flipped: Whereas more than 90 percent of his clients were law firms five years ago, today nearly 90 percent are corporations.
"Corporations have taken charge of the e-discovery life cycle," says Goings. "They understand that they may not be able to keep all the e-discovery skills on staff, but they've realized that to manage costs, they've got to bring it back in house."