Results of HBR’s Law Firm e-Discovery Strategy Survey

A law firm’s capability to provide electronic discovery (“e-discovery”) services has gone from a novelty to a business necessity. Historically, firms have struggled to find the optimal business model to meet increasing client and business demands.

The perceived value of reviewing documents has declined over time while the complexity of delivering the service
has substantially increased. Law departments are requiring outside counsel firms to contain the cost of e-discovery.
Law firms are challenged to respond to increasing client demands while balancing the need to manage risks.

To learn more, HBR Consulting conducted a survey in March 2015 of Am Law 100 law firms to identify trends pertaining to e-discovery operations and planning around staffing, technology, revenue, and strategy.

Responding to Client Demands

Several themes emerged, which provide a strong indication of how law firms are responding to client and industry e-discovery demands. Survey results reveal that firms are:

• Offering the full lifecycle of e-discovery services via in-house operations.
• Investing in technology assisted review (“TAR”) capabilities, with 78% of firms indicating that they have implemented the technology and the remaining firms adding it this year.
• Providing perceived higher value advisory services, assisting clients with Information Governance challenges, advising in the defensible use of TAR, and managing the preservation/legal hold process.

A Changing Environment

Although the process of identifying, reviewing and producing relevant documentary evidence in the context of litigation and/or investigations has evolved rapidly, a tension between the cost of reviewing documents and meeting legal and ethical obligations remains.

Innovations have attempted to lower the cost of managing electronic discovery while accelerating the process. The industry has gone from the simple automation of manual activities to advanced computer algorithms in the span of a decade – from nearly Stone Age to Space Age.

Meeting Demands

Several forces are at a confluence in the industry, including:

• Client demands to contain costs.
• Judicial acceptance of advanced technologies.
• Growing document populations.
• A plethora of service providers.
• Continuous technological innovations.
• Expanding sources of digital evidence.
• Proposed revisions to the discovery rules in the Federal Rules of Civil Procedure.

At the same time, the ever-present legal obligation to take reasonable efforts to provide complete and correct productions of evidence to opposing parties still exists.

Given client cost management concerns, law firms need to be innovative in the area of e-discovery.

Embracing Technology

Challenges remain around satisfying clients’ concerns relating to e-discovery costs. Efforts to automate processes, reduce the rates of document reviewers, and apply process improvement disciplines have helped, but the problem persists: clients continue to feel that discovery costs too much and takes too long. Additionally, many clients are unwilling to bear the financial burden and take measures to avoid prolonged litigation whenever possible or make independent arrangements with e-discovery service providers. To counteract these challenges, firms are embracing and investing in TAR capabilities as a way to reduce client costs and concerns.

Innovation is Key

Given client cost management concerns, law firms need to be innovative in the area of e-discovery. Firms that orient the e-discovery offerings to address client needs to contain costs, manage risk, capitalize on reusability of data and work product, provide cross-matter reporting and analysis, and facilitate upstream data reduction will emerge as trusted advisors.

It comes down to profit and risk in regard to law firms providing e-discovery capabilities. Are the e-discovery services providing high value at an acceptable profit margin and is the firm doing a good job at managing risk?

If the answer to either – or both – of those questions is no, law firms need to develop a strategy to address these challenges.

To learn how law firms are responding to these industry demands View the HBR Law Firm e-Discovery Strategy Survey Executive Summary.

For information on Law Department e-Discovery trends, read HBR’s Law Department E-Discovery Flash Survey Report.