The electronic discovery world is buzzing about the malpractice case filed again Amlaw 100 firm McDermott Will & Emery.  There are a few good summaries here and here, but the gist of the complaint is that McDermott failed to properly supervise the electronic discovery efforts for their client J-M Manufacturing (J-M) in response to a qui-tam investigation.  According to a lawsuit filed by J-M in a California state court, McDermott inadvertently produced 3,900 privileged documents that were handed over to the federal government (and subsequently to a 3^rd party).

In terms of the nitty-gritty, the complaint alleges that McDermott used electronic discovery vendor Stratify (formerly part of Iron Mountain, now absorbed into Autonomy) to process and host the data.  Then, McDermott apparently retained a bevy of contract attorneys to review collected ESI from the 160 custodians, ultimately producing 250,000 documents that were presumably relevant, but not privileged.  The complaint contains the following particulars:

“12. Defendants owed PLAINTIFF a duty to render legal services competently. Defendants breached that duty by, inter alia, producing privileged documents to parties adverse to JME in litigation without obtaining its informed consent, failing to supervise attorneys and vendors MWE contracted with to perform the review and production of documents, and charging JME fees and costs for performance of such work that was not properly performed, or not performed at all.”

Surprisingly, this entire discussion is about a mere complaint filed against a large firm, who assuredly will wage numerous procedural challenges.   Thus, it’s questionable whether this case even sees the light of day.  So, why is it showing up on the radar of so many experts and pundits?  First of all, as Ralph Losey notes:

“This malpractice suit is an important and widely talked about event because it represents the first time, to my knowledge, that a law firm has been sued for e-discovery malpractice. We have all been waiting for this to happen. It was inevitable.”

But, novelty alone doesn’t usually make headlines, unless where there’s also smoke there’s probably fire.  Given the rise in electronic discovery sanctions against counsel, it has long been a fait accompli that a corporate client who experienced spoliation sanctions or an inadvertent production would start pointing fingers at other participants in the process, including the law firm that directed the e-discovery effort or the service provider who hosted the review process.  A recent Duke article noted that “[c]onsistent with the overall increase in sanction cases,…counsel sanctions for e-discovery have steadily increased since 2004.”  The article identified various levels of misconduct as the basis for counsel sanctions — “four cases involved negligence, seven cases involved gross negligence, nine cases involved reckless disregard, and ten cases involved intentional conduct or bad faith.”  Significantly, the article also noted that sanctions can be based on the “counsel’s personal execution of discovery tasks or on the counsel’s role in coordinating and overseeing the client’s discovery.”  That latter element seems to be the case with the claims against McDermott, and coupled with an inadvertent production (the third rail of electronic discovery) it doesn’t seem too shocking that a malpractice action would get filed.

This lawsuit does serve as a cautionary tale for those firms that continue to do things the old fashioned (i.e., 1.0) way.  While not an exhaustive list, this means some or all of the following: employing custodian self collections, using blind key word searches, failing to do sufficient data sampling (at the search and production phases), opting to not utilize early case assessment approaches, lack of search strategy and iteration, failing to optimize the review process, etc.  Surprisingly, old school approaches to electronic discovery are staggeringly common.  In fact, I’ve recently talked to some well traveled practitioners who’ve actually felt like their firms have gone backwards in recent years as prices for basic, block and tackling e-discovery services have plummeted.

If nothing else, we know that attorneys are hyper vigilant about their malpractice insurance.  And, it’s not too hard to see how premiums may go up with increasing e-discovery claims, successful or not.  So, while it’s unclear what will happen to McDermott, if it can happen to an Amlaw 28 firm (with roughly 1,000 lawyers) it can probably happen to any firm who’s not being as diligent as they should.

As a final note of supreme irony, McDermott will likely have to conduct electronic discovery as they defend their electronic discovery malpractice claims.  I wonder if they’ll use Stratify and outside contract attorneys.  I’d guess not.

Over the past few years, I have seen a transformation of the e-discovery software market. Previously, there were no specific people within corporations or government agencies dedicated to e discovery, and no formal budget was allocated to it. As a result, purchase decisions were typically made at the departmental level by legal or information security people who could “find the money” by borrowing from other projects. In stark contrast to that, today most major corporations have people specifically responsible for electronic discovery, and many of them have company-wide initiatives to lower costs by bringing e-discovery in-house. Companies are issuing more and more formal RFPs; performing proof-of-concepts as part of the evaluation process; and creating committees of both legal and IT to make purchase decisions.

Some vendors have sought to play up a “gap” between legal and IT teams when it comes to e-discovery. They manufacture survey information claiming that collaboration and communication between legal and IT is decreasing. Our experience has been exactly the opposite. At corporations like Coca Cola, Home Depot, and hundreds of others, we find close, collaborative relationships between legal teams and the IT professionals dedicated to help them. There’s now a new career path, sometimes called “legal IT” or “e-discovery manager”, for technically savvy IT folks who understand legal’s requirements. I was happy to see at LegalTech this year that legal professionals would often come by our booth with a colleague and say to us, “I brought my IT guy with me because I want him to see this”.

It is precisely because legal and IT are working so closely together that they want a single product to manage all their e-discovery activity. That’s what led us to add the Identification and Collection Module.

Why is offering a single product for everything from identification through production such a big deal? Clearwell’s approach offers two main advantages over alternative solutions. First, like earlier versions of Clearwell, the Identification and Collection Module is very easy to use – so much so that, with IT’s permission, legal could even manage the collection process itself. For example, existing products like Guidance Encase require users to write scripts to create filters for targeted collections; with Clearwell, everything is point-and-click through a simple web UI. That makes identification and collection accessible to non-technical users.

Second, because identification, collection, processing, early case assessment, review and production can now all be done using a single product, Clearwell is able to provide end-to-end reporting through the entire e-discovery life-cycle. For example, Autonomy’s disparate e-discovery products (Introspect, Aungate, etc.) require multiple log-ins, all have different UIs, and different data models. With Clearwell, all of these are the same, giving you complete control over your data – at significantly lower total cost of ownership.

You can sign up for a product demonstration or even evaluate the product for free. Take a look – and leave a comment to let us know what you think.

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There has been progress towards answering this question, thanks mainly to the analyst community. George Socha and Tom Gelbmann’s EDRM framework has been immensely helpful in breaking down electronic discovery into its component steps. Other analysts, like Debra Logan at Gartner, were quick to embrace the framework, prompting every software provider to follow suit. As a result, there is today a common language that everyone uses to describe the e-discovery process.

The Electronic Discovery Reference Model (EDRM) breaks down the e-discovery process into a series of steps. Companies looking to buy e-discovery software to lower costs typically map different software products to each of these steps, to make sure that they cover the entire process.

But having a universally-agreed framework is only half the answer. To eliminate customer confusion, there also needs to be agreement on how different software products fit into the framework. This is especially important since there is no single, end-to-end solution for e-discovery which covers all aspects of EDRM. So customers are forced to think about how different software solutions fit together. And that is where things begin to fall apart.

Many software vendors feel it is advantageous to claim that they do everything, even though they do not. Customers are rightly suspicious of those claims, and so press vendors to provide more detailed information – hence the question, “when you say you do e-discovery, what exactly does that mean?”

In light of that, how can litigation support teams, corporate counsel, or legal IT people figure out which e-discovery solution best meets their needs? From observing this decision-making process hundreds of times, I have found 3 simple steps are incredibly helpful.

Step 1: Read the analyst reports

Two reports in particular make for required reading. One is Gartner’s MarketScope Report, which is available for free at certain sites; the other is the 451Group’s recent e-discovery report, which is summarized in a publicly available presentation. The helpful thing about the 451 Group’s report is that it tells you which software companies do which parts of the EDRM process. You do have to buy the report to get the full picture (it’s well worth it!), but the publicly available presentation will give you a flavor for their analyis, and I have drawn from that presentation in the figure below:

Analyst firms like the 451 Group map software vendors to the EDRM framework according to what they actually do, which is often different from what software vendors claim they do.

The 451 Group’s analysis highlights several important points. First, it shows that there is no single end-to-end solution. Even the products of giants like EMC (SourceOne), HP (IAP), and IBM (CommonStore) only solve one piece of the puzzle, information management. Second, it shows that customers have choices at each stage of the EDRM process. For example, to solve the problem of identification, collection, and preservation of electronic information, customers can choose from solutions as diverse as Guidance EnCase (forensic collection), Index Engines (back-up tapes) and Mimosa NearPoint (email archive). Third, it provides an independent assessment of what vendors do, as opposed to what they may claim. For example, Kazeon claims analysis and review capabilities, whereas the report shows its product does identification, collection, and preservation; Recommind claims its Axcelerate eDiscovery and MindServer products do processing, whereas the report finds that they do not.

Step 2: Evaluate the products prior to purchase

Just as anyone would test-drive a car prior to purchase, it’s critical to test-drive e-discovery software. Any vendor should be willing to provide their software free of charge for an evaluation on-premise. The most effective evaluations are when the customer uses the product themselves, either on a live case or test data. This is far preferable to just sending the data to the vendor who then loads it into their system, as in that scenario there are too many opportunities for the vendor to hide their product’s shortcomings.

Step 3: Check references carefully

The trick with references is to insist on relevant references. It’s not good enough for the vendor to dredge up some random person who says nice things; or even a credible knowledgeable person who is using the product in a completely different way. For example, if a company is happy with Autonomy’s IDOL for enterprise search, that does not tell you much about what Autonomy might be like for e-discovery. What really counts are references from other customers who are using the product for the same application that you are.

All this can sound like a lot of work, but I have seen people go through the process in as little as a month, and be much happier for it. A little work up front can save a lot of time (and heart-ache!) later on.

While the guidance is clear, following the guidance in practice is very difficult.  The primary reason for this is that the search technology being used in e-discovery today is not up to the task.  Specifically, today’s search technology suffers from three problems:

1. The over- and under-inclusive tradeoff. Many technologies have been developed to address the tendency of keyword searches to miss relevant documents and produce under-inclusive results.  Wildcard and stemming technology has been developed in order to address the issue of finding common word variations in specified keywords.  Concept search has been designed to find documents containing words with similar meanings to the keywords in a search.  And fuzzy search technologies have been put in place to find misspellings of words. However, all of these suffer from the same problem: they produce too many non-relevant or “false positive” documents thus driving up the cost of review. For example, if someone runs the wildcard search “divers*”, then he or she not only gets the desired documents containing “diverse” and “diversity”, but also gets a large number of false positive documents containing “diversion”, “diversification”, and so on.  In the case of concept and fuzzy search, the problem is so great that these technologies to date have rarely been used in e-discovery.
2. Too expensive to test, sample and refine searches. Today’s search technologies are largely designed to run one search at a time, not the dozens of searches that are typical in e-discovery. As a result, anyone trying to follow the best practices of testing, sampling, and refining each search will find themselves missing deadlines and running over budget because it takes so long. This also makes collaboration with the opposing party close to impossible, since there’s little time to iterate on – and agree upon – a set of keyword searches.
3. Manual documentation. It’s not enough for producing parties to use best practices, they have to document them so that they can “show their work” to the court. Currently, documenting the search refinement process is mostly manual, with the result that it is either done inadequately or not at all.

The reason why the search technology used for e-discovery has these problems is surprisingly simple: it’s because the technology was not designed for e-discovery in the first place. Rather, it was built for enterprise search, and was only later repurposed towards e-discovery.

The “Black Box” Of Enterprise Search

The core issue is that enterprise search technology has been designed to be a “black box”. Users enter a single search query into one end, and get results at the other, with no visibility into what happens in between. Going back to our previous example, when a user searches for “divers*” intending to find documents related to “diversity” or “diverse”, enterprise search engines give the user no visibility into the crucial step of query expansion and how it expands the search query into relevant and non-relevant terms like “diversion” and “diversification”. As a result, the user has no ability to minimize the false positives.

In the same vein, when a user enters multiple queries into a “black box” enterprise search engine, all of the queries run as a single search, and the user has no visibility into which results are associated with which query. For example, a user that searches for “hiring OR interview” will get the results for the combination of the queries “hiring” and “interview”. He or she won’t know that only 5 of documents contained “hiring” while 100 documents contained “interview.”  This limitation makes analyzing, sampling and refining searches costly and time consuming.

That’s not say that enterprise search products like Autonomy or Endeca are flawed. Far from it.  Their “black box” design works exceedingly well for the simple and quick queries that people want to run across the enterprise for general business purposes. If a sales manager is looking for a single proposal for her meeting the following day, then she doesn’t care how the search was performed or if it’s over-inclusive.  She’s only interested in the first page of relevant results, and for that use case enterprise search engines do a great job.

But e-discovery is a whole different world.  In e-discovery, users typically must review every single document in the search results, not just the most relevant ones.  As a result, over-inclusive searches can dramatically increase the costs of downstream production and review.  And under-inclusive searches raise the issue of defensibility.  Finally, e-discovery users have to run a lot of search queries and understand which documents are associated with each of those queries.

So, going back to the original problem, if current search technologies cannot help lawyers and litigation support professionals follow Judge Grimm’s guidance and address the “well-known limitations” of keyword search, what can? That will be the subject of my next post.

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IBM launched the first salvo:

“The software will allow companies to move from scattered, point-solution approaches to a disciplined approach that controls electronic information, helps support Federal Rules of Civil Procedure (FRCP) compliance,…”

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And, Autonomy quickly followed suit:

“The Autonomy pan-enterprise search platform automates the retrieval, processing, and management of all information throughout a global organization irrespective of languages, operating systems, and file types, avoiding non-FRCP compliant search techniques.”

I’m more than tolerant of both puffery and marketing-speak (though woe to those who forward such releases to Monica Bay), but this notion of “FRCP compliance” seems to take advantage of an already bombarded buying public, who have likely grown weary of FRCP articles, CLEs, and maybe even blogs posts.  Nevertheless, it seems useful to really tease out what the FRCP means and does not mean in relationship to e-discovery and enterprise search.

So, in an attempt to debunk this “compliance” myth, I thought I’d devote this blog post to demystifying some of the inaccurate notions about the frcp electronic discovery.

Federal First

Initially, it’s important to note that the Rules only apply to litigation within the United States Federal court system.  State court litigation, international lawsuits, arbitrations and administrative actions (just to name a few) aren’t under the aegis of the Rules.  While it’s true that certain state courts (Minnesota for example) have selectively adopted the new discovery provisions, most have not.  So, the first step is to check your venue.  Then, assuming the Rules do apply because your organization is in Federal litigation, the impact, while still not crystal clear, does take on more definition.

Relevancy Filters

As a starting place, the discovery process (as part of litigation) is fundamentally limited by Rule 26 to information (electronic and otherwise) that is “relevant” to the case at hand (i.e., “relevant to the claim or defense of any party”).  This distinction is critical because for the most part it prevents the responding party from having to cast a company wide net for all data, a task envisioned by many content management systems.   Certainly, the ability of certain litigation support software systems to access all user created data is valuable when searching for relevant data, but there are many ways to skin that cat.

No Express Retention or Preservation Duties

Legions of articles proclaim that the amended Rules create wholly new duties to retain information in general, as well as infusing new duties to preserve electronic data once litigation is anticipated.  Instead however, the new Rules expressly disavow creating truly new retention or preservation duties.  While it is undoubtedly a good practice to have a retention policy, given the welter of statutes and regulations that do create retention duties, the Rules do not mandate that a company create one ahead of litigation. Read more about electronic data discovery.

What is true, however, is that the new Rules have powerful implications for preservation once litigation is likely because of the requirements to understand, negotiate and produce relevant information early in the litigation process.  Under the new Rules, it is critical to be able to identify and retain potentially relevant data once litigation is filed (or is “reasonably likely”).  And yet, the burden of placing a legal “hold” on data, while often significant, certainly can be achieved without a formal document retention/deletion policy.  Again, the litigation “trigger” is key.

“Records” Aren’t the Focus

Continuing on this theme, but in a slightly different vector, there are differing opinions about the impact that the Rules have on “business records.”  This issue is nebulous since during litigation discovery, it is easy to confuse potentially relevant data corresponding to litigation with “business records,” which are often used in two different contexts.  Initially, there is the “business records” exception to the hearsay rule, which is quite specific and affects the admissibility of evidence in court.

The second, broader definition applies to organizations as they attempt to define a records management program to meet the numerous state, local and Federal mandates.  Commonly, as part of this complex initiative, companies will create records retention programs that specifically define official “records,” unofficial “records,” “non-records,” as well as specific retention periods for certain types of records.  Once the company’s records protocol is put into place there may be some downstream nexus with the Rules, but it won’t manifest itself until Federal court litigation arises, as described above.   The most common intersection occurs when a records retention policy prescribes a deletion event that contradicts the legal “hold” requirements for a record that is likely to be relevant to litigation.

In sum, the foregoing describes the role the FRCP plays in Federal court litigation.  It should be clear that the important, yet relatively narrow, use cases do not include any general compliance mandate in the absence of specific litigation.  I think it’s important to separate myth from reality when it comes to understanding how and when the revised Rules really do come into play.  Failure to do so can create an unpleasant scenario where your organization will either under- or over-prepare for these important litigation guidelines.