Cases involving e-discovery are on the rise, according to American Bar Association’s Legal Technology Survey Report. And as a result, many law firms are considering bringing e-discovery in-house with hopes to reduce cost and increase efficiency.
To do e-discovery well is almost like an art form, and there’s a fine line for knowing when and how to bring the practice in-house. Bringing it internally can alleviate outside expenses and give you more control over your clients’ data—or, it can lead to higher discovery costs, more chaos, and increased risk. That’s why it’s critical to understand when it’s beneficial to bring e-discovery in-house, versus when you need the help of an outside vendor.
That threshold will vary from one firm to another, and much of it depends on staff size, expertise and technological resources for the matters at hand. To help you determine the right approach for your organization, here are seven key considerations for bringing e-discovery in-house:
Scope and Utilization
You must first consider the business case—does the current level of outsourced work justify bringing the process in-house? That is a question both in terms of determining exactly which steps of the electronic discovery reference model (EDRM) you want to internalize, and whether there’s sufficient quantity of that work to justify purchasing, supporting and maintaining full-time computer and software systems, as well as the added payroll, benefits and other costs that accompany a dedicated internal solution. Simply gathering those statistics is often the largest hurdle. In short, you should only consider insourcing this work if your existing outsourced work would more than support the internal systems, people and resources required. Otherwise, you’re simply adding another cost to your business without an offsetting revenue stream.
Unless you have an orderly process in place, bringing e-discovery in-house will only contribute to more stress, chaos, and risk. It’s important to develop a plan, customized for your organization, that outlines specific roles and guides you through each case consistently—and to have that in place before you bring the process in-house. Creating this in conjunction with an e-discovery professional will ensure that you cover all the relevant areas and are equipped with the know-how to complete it properly.
Software Solutions and Platform Selection
What platforms will you use to handle your e-discovery? Will you use one program that can handle the entire process from legal holds to collection to review, or rely on several different ones? While e-discovery vendors typically have multiple choices to fit multiple needs, unless you want to maintain multiple systems, you must determine not only which system on which your in-house capabilities will centralize but whether you can move your existing cases to those new internal systems. If you cannot, then that takes you back to consideration #1. Alternatively, it might make sense to take a hybrid approach where the personnel and expertise are all or mostly in-house, but you rely on SaaS platforms that don’t require the up-front capital expenditures and high costs of 24/7/365 monitoring, support, and maintenance. You can bring your e-discovery work in-house without necessarily investing in a whole new infrastructure.
In the Cloud or On-Premises?
This choice ties into the last decision and bears a lot of weight on how your e-discovery process is handled and what platforms can be used. Some platforms are built for the cloud and are housed in a secure, well-known environment like Amazon Web Services (AWS), and others are designed to be housed onsite at your location or used as stand-alone solutions. As you determine which method will work best for you, consider multiple factors including data security, equipment costs, physical data center space, facility security, mobility, data hosting, backup and business continuity solutions, ongoing maintenance and more. This decision affects both upfront and long-term costs.
Whether you decide to bring in just the professionals or the solutions and equipment as well, moving your e-discovery in-house requires a significant upfront investment. And there will be a learning curve as there is with any new effort. It has the potential to reduce costs in the long run, but you must be prepared that the initial expense has the potential to vastly outweigh revenues generated for some time. Selecting, purchasing and setting up software and equipment, hiring and training personnel and other related items are just a few critical cost factors that will be required upfront—all before you can truly manage the first client project. Just don’t underestimate the runway you will need before your new in-house team starts to pay for themselves or generate profits. The worst thing you can do is short-change your team, and in turn, your clients, by cutting corners or jumping into a project before you have the people, processes, and resources fully in place.
Is the firm prepared to take on the risks and liabilities that come with e-discovery, including not just errors and omissions type of coverage, but coverage for data breaches or other potential new avenues of liability? Does the firm’s insurance policies cover those risks, or will that be an added cost? By taking on this portion of your clients’ cases, you assume a certain amount of risk and responsibility for meeting necessary discovery requirements and thoroughly completing each process.
Because discovery needs vary from one case to the next, the level of demand—in terms of people, technology, and other resources—will fluctuate. Full-time e-discovery providers are prepared to handle that market volatility, but it can be a challenge for firms, especially in terms of staffing, to handle the fluctuations smoothly. Being able to quickly adapt to a change in demand is key. Alternatively, can you partner with an e-discovery provider who can handle overflow needs?
There are advantages to moving e-discovery in-house, including increased efficiency, predictability, and potentially reduced costs. But if your organization is not prepared to build a capable solution and take on the associated responsibilities mentioned above, it can quickly spell disaster. That’s why firms should take a careful look at what’s involved before bringing e-discovery in-house.
Of course, taking on the process internally doesn’t mean you can never work with an e-discovery vendor when you need help. In fact, the hybrid approach may work best for some firms. You can work with a vendor to set up an end-to-end system and workflow that allows your in-house team to handle most cases internally, but with support and assistance from the vendor as needed. Depending on your overall needs, you might set it up where your internal team completes some tasks, while others are left to your vendor partner, or where your vendor partner simply provides a relief valve, bringing in more resources only when you need them. There are plenty of options—it’s just important to find the one that works best for your organization.