I recently participated in a podcast series to offer insight into how corporate legal departments can better manage their litigation spending by restructuring their e-discovery strategy. Aiming to alleviate some of the pain associated with e-discovery, the panel and I discussed the use of analytics in cutting costs and the value of approaching e-discovery as a business process. Our discussion included three important areas: review of the current landscape, existing cost drivers, and tips for a successful e-discovery strategy.
Current E-Discovery Landscape
Due to an influx of lawsuits and electronic data generated and stored, today’s companies are facing increased litigation costs and risks. The discovery phase alone can represent more than 50% of these costs, according to Protiviti, leading many organizations to prioritize litigation cost prediction. Concurrently, legal departments are bringing the management of e-discovery in-house to optimize their cost-control efforts.
Breaking away from the tradition of manually managing discovery, many legal departments are now taking a hands-on approach in monitoring e-discovery and predicting costs. While it’s certainly not a foreign concept, continuous education must be encouraged so organizations can truly reap the benefits of e-discovery process optimization.
Cost Drivers
With corporate legal costs under a microscope in today’s world, it’s crucial that legal departments understand their key cost drivers so they can effectively adjust their phased discovery strategy as necessary. Here are a few of the major elements driving up e-discovery expenses, as outlined in the podcast:
- Increased number of lawsuits
- Volume of electronic data that is generated and stored by companies
- Number of custodians and average file size per custodian
- Overly broad approach during the initial scope discussions / negotiations
- Overly broad approach to the collection process
Tips for Successful E-Discovery
If you’re not currently thinking of e-discovery as a business process, it will end up a burden—costing you both time and money. The following tips will help guide organizations that are looking to roll out updated e-discovery processes.
Take a holistic approach. E-discovery isn’t a singular process, and it shouldn’t be viewed as a one-stop project. When electronic data is broken into a multiple pieces, law departments can manage, measure and optimize efforts more effectively. This approach also offers opportunities for improvement by embedding e-discovery capabilities in current business processes.
Begin with the end in mind. Answers to a few key questions can help you achieve your e-discovery goals:
- What do you want to be able to report?
- What do you want to measure?
- What do you need to measure on in order to create and evaluate success?
- How do you design the process in order to catch those metrics?
Understand the cost drivers. Legal spend management is all about understanding what factors are driving expenses and capturing data to manage those expenses. To get a better sense of which e-discovery elements make the biggest dent in your budget, you can map and record total discovery time, note labor costs per hour and determine which parts can be automated by technology. Using this strategy, you’re then able to extract inefficient processes and replace them with a fresh approach.
Use a measurable platform. To mitigate hefty spending and downplay outside firms’ management of discovery platforms, legal departments are standardizing all cases and corresponding documents into a single system and requiring that their outside counsel conform to that system as well. This consolidated platform should be armed with a cost-saving tool like technology assisted review (TAR). Equipped with a common platform and effective technology, legal departments will gain greater control over their litigation costs.
E-discovery can be costly – but not doing it right can cost significantly more. That’s where evaluating your current strategy by approaching e-discovery as a business process can enhance company value and performance. In the midst of exploding volumes of data, converting the information to a well-tested technology platform will increase your department’s efficiency and productivity levels while bringing down litigation costs.
