LegalTech: Trends affecting contract attorneys … and oh yeah, India (again)

We had 6 Posse List members covering LegalTech New York this year, trawling the vendor booths and attending several of the seminars/panels.   It was the usual mass of vendors and attendees crammed into too small of a space — and spotty W-Fi — although the seminar/panel/presentation venues weren’t too bad this year.  And it did seem a bit less crowded.  But many more in-house counsel types, and a lot of folks with resumes looking for jobs.

And much, much less swag this year.  Last year we got flash drives, pens, CDs, DVDs, etc.  We even got a remote-controlled helicopter from one vendor (those were the days).  This year cost cutting reduced the slag.  Best we could get:  a cool water bottle at the Kroll booth. Still, there are some cool gadgets out there.  The one that created the biggest buzz at the show and on the blogs was Paraben’s CSI Stick  which is a device that plugs into a cell phone and lets the user pull off all the phone’s “forensic data” — the phone book, text messages, camera phone images, call logs, etc.  The CSI Stick can even retrieve text messages that have been deleted by the phone’s owner.  No, we didn’t filch one.

One other thing we did get was the book  A Process of Illumination: The Practical Guide to Electronic Discovery by Mary Mack (Corporate Technology Counsel for Fios).  The book is considered one of the definitive books on e-discovery.  Fios had a great booth/staff at the show.
 
The primary EDD vendors were (naturally) the ones hawking products aimed at reducing e-discovery costs, with a much higher emphasis this year on software/other products for international litigation.  But it wasn’t all e-discovery.  There were a large number of vendors outside the electronic data reference model.  We’ve posted a run-down of the vendors we found most interesting which you can access by clicking here and we have included comments below when a vendor relates to a trend we discerned.

Now, some of the trends we picked up on from vendors, seminars and attendees:

1. As noted, the corporate in-house types were in full force as attendees this year.  As we have reported, cost pressure is pushing companies across the board to pare costs, and the newest EDD software helps them.  The newest
“state-of-the-art” development in ESI technology has led to fuller, faster pre-screening (early case assessment) which reduces the universe of documents and leads to fuller, faster review and production — which means shorter document review projects. 

A number of vendors were demonstrating their litigation document management platform/content analytics. Among them:

FTI with its new version litigation document management platform Ringtail Legal and its  content analytics program Attenex which “helps legal teams plow through significant amounts of data to find, mark and tag relevant and privileged documents without relying solely on keyword searches”.

Mimosa Systems with its NearPoint eDiscovery application suite, which automates policy-based information management for the active identification, collection and preservation of user-generated content. It captures, indexes, archives and searches emails, files, calendars and contact entries in a single repository so legal counsel can quickly identify relevant information in response to a legal discovery request.

Exterro, a legal governance, risk management and compliance software provider, announced the release of its Fusion Genome data mapping and workflow product. Fusion Genome is a data mapping solution that helps legal and IT teams identify, manage and analyze data sources and electronic stored information (ESI) across an entire organization.

One of the more fun — and impressive — was the metrics software demonstration at the Peak Discovery booth.   We were impressed — and, as a reviewer a bit intimidated —  by their ability to keep close tabs on productivity (performance charts with graphs and statistical profiles for each reviewer) and costs (constantly comparing actual current costs with projected costs).  And the data isn’t refreshed daily or hourly, but every few minutes.

2. There was a lot of chatter/conversation about the “disconnect”, the lack of collaboration between a company’s IT team and the legal department (not to mention the similar disconnect inside law firms).  The problem:  IT departments and legal departments have operated largely independently of one another.  Now, with the  complexity/costs of e-discovery increasing exponentially, these departments need to be linked.  According to some numbers being thrown around, the average U.S. company faces 305 lawsuits at any one time — a number that jumps to 556 for companies with more than $1 billion in revenue – IT and legal need to work together.

3. There is now an emphasis on “meet-and-confer” where the parties determine what documents are material for the matter so that discovery is more “party-driven” as opposed to “court-driven”.   This is happening on civil litigations and is also happening with respect to investigations/reviews by the DOJ, FTC, SEC, etc.  The number of documents is reduced — no more massive document dumps on the adversary — and discovery costs are cut.  This requires preparation by counsel for the meet-and-confer who must go into the meeting with a knowledge of the holdings, and significant involvement from in-house counsel, who knows the corporation’s universe of documents better than external litigators.
 
Vendors emphasized that in searching the document database in e-discovery, effective search techniques must be used.  One cannot simply use key words as search terms, which can fail to find many responsive documents and also result in an overbroad return of documents that are not responsive.  Smart search techniques need to be employed and at least two iterations are required for an effective search.
 
Also a tiered or layered approach is recommended for discovery.  For example, three tiers could be 1) key custodians, 2) date and time, and 3) key words.
 
Every case is different so a standard checklist approach is discouraged.  Rather, sets of best practices are to be used.  There was constant reference to the principles and practices that resulted from the Sedona Conference Cooperation Proclamation (July 2008).

The Keynote session with US Magistrate Judge John Facciola (DC Distr. Ct.) further elaborated on the “meet and confer” and “party driven” concepts as opposed to “court driven” discovery.  Facciola’s remarks certainly supported this finding.  He pointed out that the new (younger) generation of judges is much more tech savvy than their predecessors. They understand the technology and its capabilities. And they fully expect that the attorneys that appear before them understand it too.  He said that he, and his colleagues, are increasingly impatient with attorneys that fail to devise and agree on a detailed strategy for the discovery process (everything from how the data is collected to how the search/review is conducted, e.g. which keywords, which processes and software to be employed etc.)

 4. There was a much greater emphasis on the international perspective.  For instance Clearwell Systems launched Clearwell Mobile  for cross-border litigation. The product is powered by Clearwell’s E-Discovery Platform and allows companies the ability to ‘drop” a platform in a customer’s foreign site and allow legal teams to perform e-discovery “in country”  where the data resides and local counsel are familiar with the foreign entity’s privacy laws. After data has been acquired and responsive data has been retrieved and redacted, it is sent back to the situs of litigation

We watched a demonstration of Clearwell Mobile.  It supports English, Western European, Eastern European and Asian languages. This multilingual approach works pretty well with Clearwell’s search technology in search previews and in search filters, as well as some very cool search reports in cross-border cases.  The demonstration showed how the product provides automatic language identification to data sets and exacted document counts by language type. 

We attended two seminars, one on Regulatory Challenges to eDiscovery Around the World and one on Manage Your Risks – Litigation and Electronic Disclosure: Are you Ready?   A major theme — and actually the predominant one during the first seminar we mentioned — was the issue of Europe’s strict data protection/privacy laws.

According to the “war stories” from the seminar speakers (and members of the audience) the penalties for illegally moving data abroad or violating data protection laws can be quite severe (including jail time).  Italy has supposedly enacted into law a provision requiring corporate passwords to consist of a minimum of 6 characters and include at least one numerical or other symbol. Failure by a company to adjust its IT policy to meet the standard is allegedly punishable by imprisonment.
 
Recurring issues: how to pare down the data to exclude as much “private” information as possible (so as to include only such data that is arguably relevant for the case); ensuring that you receive individual consent forms from each custodian; repeated failure by both US counsel and judges to appreciate just how serious data protection/privacy is taken in Europe; difficulties in determining where data actually “resides” in the context of multinationals with people and computer servers spread throughout different locations in Europe. A Daegis representative spoke of the fear of her people of being arrested when being sent to retrieve data in Europe. 
 
The result seems to be that a number of reviews are being — and will continue to be —  conducted locally which matches what we know from Posse List members in Europe.

Trilantic, which is focused on Europe, offers on its website the rules and regulations implementing EU Directive 95/46/EC in each of the EU member states, in English, whic you can access here.

Sedona provides the compendium The Sedona Conference® Framework for Analysis of Cross-Border Discovery Conflicts: A Practical Guide to Navigating the Competing Currents of International Data Privacy & e-Discovery  which can be downloaded here.

5.  Foreign language.   Yes, we all know the flood of language projects (seemingly the only projects out there right now).  We met with a number of vendors in the foreign language/doc review space.  There was also a  seminar that reviewed the issues of managing a foreign language data project — workflow, searching and relevancy versus  accuracy.  The vendors tack:  “there is more to handling non-English documents than merely being able to search them.  You need a document team that knows how to manage them.”    See Clearwell discussion in #4 directly above.

Some of the other vendors in this space are:  LDSI, Investigative Technologies  and Orcatec. 

Also of note was The panel included Gregson Chan, Senior Litigation Technology Manager at Bingham McCutchen.

5.  India/outsourcing … and onshoring.  The biggie for contract attorneys.   Huron Consulting was “flying the flag” on outsourcing to India and used LegalTech (well, it was preannounced in some circles) with its announcement of an exclusive alliance with UnitedLex. 

Side note:  as we reported late last year when a Posse List staffer was in India, UnitedLex handles document reviews for GE,  IBM, etc. for product liability lawsuits, general litigation support, contract templates, patent work, etc., etc.  The flood of corporate in-house departments already with established centers in India, and the recent rush by more corporations, has left law firms in the dust.  We’ll save our India diatribe/analysis for our next post.  But see our comments in #6 below. 

According to the press release and the hype, the alliance will bring together approximately 1,000 domestic document review stations from Huron and 600 Indian-based sets aiming to reduce the costs of e-discovery.

Huron also operates large document review centers in Illinois, North Carolina, South Carolina and Texas.

But …. there was much talk about US attorneys recently laid off in search of any work and willing to do discovery review work, and EDDs expanding or setting-up onshore facilities to take advantage. 

Yes, onshoring.
 
Integreon was at the show and there was a ton of chatter about the launched of the first UK onshore shared services center for the legal market.  Osborne Clarke (the UK law firm) is the first client of Integreon in the UK.  Actually, no surprise.   Integreon worked closely with Osborne Clarke for the design of the suite of services provided from the shared services center.   It will provide technology and business intelligence services; knowledge and information management (including document reviews); transcription, secretarial, and word processing services.

And it will not be in London, but Bristol.  Why?  The costs are cheaper and the talent pool is great, especially the foreign language pool.  It is a huge cultural, educational and business capital:  the aerospace industry, the media, an enormous information technology and financial services base.

Integreon also has onshore centers in Fargo, North Dakota and New York City.

And following that trend in the U.S., a number of EDDs who have direct-with-corporate contracts or relationships are expanding or establishing onshore document centers in lower-cost centers in the U.S. (such as Deagis is doing in Chicago).    And as one of the representative from Integreon said regarding their offshore document review facilities.  there will always be some reviews conducted in the US.  It comes down to how sophisticated the matter, what level of English fluency, nuance and legal expertise is required — and the clients.  He said many clients prefer/insist that the reviews be conducted in the U.S.

We’ll have more on India, offshoring, onshoring, etc. in a later post including some of the LegalTech chatter about where the Obama administration really stands on outsourcing (yes? no? see link here) and IBM’s interesting turn (click here).

 
6.  More and more legal work is staying inside corporate legal departments and moving away from law firms.  As we profiled in a post a few weeks ago, ACC members have reported a much larger use of contract attorneys in-house, especially doc reviews.  EDDs have probably made more headway in this than staffing agencies, especially in the ECA software area such as Recommind/OpenText  and the “preventive software” area such as data mapping programs such as that by Exterro.

We met with several in-house corporate lawyers who said “we’re the front line in e-discovery” and “we need to be in more control, not outside counsel”.   They said “we need to get our digital houses in order” a dedicated e-discovery coordinator at every corporate subsidiary.
 

7.   There was also a lot of discussion on how legal professionals can adapt using technology during these tough economic times, especially social media.   There seemed to be a “Twitter mania” at this year’s show.  But there was some thoughtful counterpoints made to it all, to.  For links pro click here and click here, and for con click here.

8.  And finally, this note. 

Many vendors expect a shakedown of the EDD market in the next 12-to-24 months, leaving a handful of big players as opposed to the hordes filling the booths this year. With so many vendors, it’s clear the competition is fierce.

For contract attorneys, it — well — sucks.   As we have reported, reviews are becoming increasingly streamlined (much shorter) and these are the driving factors:

a.  Numero uno:  costs.  We have beat this to death already.

b.   The level of competition among the software providers is fierce – they are putting a lot of time and money into creating products that make them stand out from the rest – and ultimately that means more accurate and efficient means of conducting searches as well as more tools to monitor and control costs (including performance metrics).

c. In Europe, data protection/privacy issues are forcing the parties to narrow data collection to a few select custodians and to make very serious efforts to sweep out any material that really isn’t arguably relevant. In other words, it seems more effort and time is being spent on the front end — at the collection stage/ECA stage —  rather than on the back end by reviewers for fear of coming into conflict with the law.

d. The “meet and confer” philosophy combined with a generation of more tech savvy judges in the US seems likely to put pressure on the parties to devise a very focused (and hence shorter) discovery process.