Your Outside Counsel May Be Giving You Bad E-Discovery Advice

Law firms’ interests are not always aligned with their clients’. An important objective for many firms is a) increasing or maintaining the number of billable hours per year, and b) enabling the firm to be selected for lucrative litigation work. Companies, on the other hand, are looking to a) reduce costs by managing more of the e-discovery process themselves by implementing internal tools and processes, b) reduce risks and develop more consistent and defensible e-discovery, and  c) enable competition among firms vying for litigation work. I have seen a number of business conflicts arise:

One law firm developed a legal hold process for their client. Instead of having the client initiate legal holds, the process was architected such that outside counsel needed to be involved in choosing custodians for every hold at every level (assuring a near continuous stream of business for the firm). Likewise, the company’s written legal hold policy, also developed by the firm, declared that the firm should be engaged to defend all choices made in the selection of custodians.

One law firm created a detailed electronically stored information (ESI) data map for its client. To find certain data types, the map contained the following: “To find these types of data, please engage ABC Law Firm,” where ABC was the firm that created the map.

One law firm insisted that it house all documents related to a specific matter. When additional litigation arose in a similar dispute, the firm strongly argued it would be difficult for them to share or hand off these documents to another firm, and therefore they should by default handle all litigation.

Some firms subtly discouraged their clients from becoming litigation ready. One partner from a large international law firm relayed how she received grief from her partners when she encourage her client to become self-sufficient in its e-discovery processes. Law firms make a lot of money when their clients are not litigation ready, and the partners were worried about losing the revenue.

For the most part, law firms’ foray in e-discovery has not been successful. This year, many firms that launched these practices five years ago are either downsizing or eliminating them. The firms found that e-discovery is operationally a different business than practicing law.

The best firms, in my view, understand that their core competence in providing highly-skilled services, and encourage their clients to develop defensible in-house hold and discovery processes. Some outside counsel litigators I have spoken to welcome this change, allowing them and their firms to focus on high-value areas such as litigation strategy, settlement conferences and actually litigating cases.

Unfortunately, many law firms still see litigation readiness and e-discovery as excellent billing opportunities. Companies need to be careful in understanding this conflict.

via Your Outside Counsel May Be Giving You Bad E-Discovery Advice.

Rising Tide of Litigation Lifts Firms – Law Blog – WSJ

High-cost suits are back in vogue, a potentially promising sign for many big law firms.

Litigation work —the bread and butter of many big U.S. firms — rose 4.1% in the first quarter compared to a year ago, according to data that’s expected to be released Monday by consultancy Hildebrandt Baker Robbins. Patent litigation work specifically rose by more than 5%, its data shows.

The strength, if it lasts, may help bolster the financial health of the $100 billion global corporate-law industry, which still has not returned to the dizzying heights of 2007.

Litigation work is the industry’s single most important source of revenue, comprising 32% of all billable hours among U.S. law firms during the first quarter.  Patent litigation work comprised another 5%.

via Rising Tide of Litigation Lifts Firms – Law Blog – WSJ.

Vetting electronic files can boost cost of litigation

Information technology advancements have made business a lot more efficient and now that need for better efficiency is reaching into the courthouse and forging closer ties between corporate litigants and their law firms.

That’s because North American courts are starting to mandate that companies engaged in litigation provide electronic disclosure of documents. It can be extremely time consuming and ultimately very costly for a company and its law firm to sort through all of the requisite electronic documents to determine what is relevant to a case.

So law firms across Canada that assist large corporate clients with litigation are focusing on ways to reduce the time and ultimately the cost of vetting electronic materials relevant to the case, fuelling a renewed partnership between corporate counsel and private firm lawyers.

“One of the biggest costs right now is related to managing the massive volumes of electronic documents involved in litigation,” acknowledged Melanie Schweizer, senior counsel at Bell Canada’s Toronto office. “As a client, we’re really looking for firms to deliver value to us and we’re scrutinizing things a lot more closely to ensure that the file is run as cost-effectively as possible,” she said. “Gone are the days when in-house counsel will send a file to an outside counsel and let them do whatever they need to do to make the litigation work.”

via Vetting electronic files can boost cost of litigation.

Best-practice planning for e-discovery

Some US litigators saw the problem coming, but not that many did much about it. Old paper-based discovery regulations and practices just aren’t equipped to deal with the growing mass of digital files and email correspondence that is generated in corporate offices every day. Correspondence with external counsel is generally privileged, of course, but everything else that could be relevant to a case has to be gathered, sorted and offered up, should the worst occur and a discovery request hits the legal department’s desk.

But e-discovery expert Jonathan Redgrave believes that many lawyers are making it worse on themselves by sticking their heads in the sand about the whole issue. As with much of law, he says, preparation is key.

A thirst for information

Redgrave started his career working on civil trial and appellate matters at Minneapolis-based law firm Gray Plant Mooty, before making his name in high-profile litigation work at international law firm Jones Day. He says it was his experiences of managing discovery requirements on major international tobacco cases that first drew him to e-discovery – that and a love for technology itself. ‘Data privacy, discovery records management… it’s the space where technology and law meet that I find so fascinating,’ he explains.

Redgrave’s next role, as head of Nixon Peabody LLP’s information-law practice, gave him ample access to that space. He believes that few companies have been afforded the advice they need to create robust programmes for records management and disposal. ‘The parameters as to what to preserve, collect and disclose are not fully clear,’ he says. ‘And while courtrooms and corporate law departments are playing catch-up, technology is continuing to evolve.

‘For example, social media and cloud computing technologies are having a major impact on the ways in which we work. But, while employees profit from the freedom that these services afford, businesses and even the government are left scratching their heads when it comes to recording, storing or producing conversations or files that were shared on those systems.’

But Redgrave emphasises that e-discovery isn’t just about sifting through electronic correspondence to get a handle on what’s been said and to whom. ‘Companies also need to know, for example, what it will mean if data is accidentally lost or destroyed,’ he says. ‘Or what content they can safely delete from their systems without having to worry about facing repercussions down the line.’

To do this, Redgrave believes that you need to look forward as well as back: ‘Ask yourself “What will the workplace look like in 10 years’ time?” and “How will we be communicating and sharing data?” I think that current working practices are going to be almost unrecognisable in a decade, and legal departments need to start thinking about the impact of that on their e-discovery requirements now.’

The legal industry is hardly celebrated for being an early adopter of technology, and Redgrave says that this lack of understanding about current systems and future trends is also hampering some corporation’s e-discovery efforts. It was partly this that led him to work with others to set up the e-discovery working group of The Sedona Conference think-tank, a not-for-profit research and educational institute that pulls together leading lawyers, judges, academics and other legal professionals to discuss, study and help establish guidelines and standards in key areas of US law.

via Best-practice planning for e-discovery.

Hogan Lovells Faces Challenge of Managing a Megafirm | National Law Journal

Hogan Lovells is, as of Saturday, a reality — a 2,500-lawyer, 47-office megafirm that spans four continents.

Now, the firm’s leaders have to manage their leviathan and clean up mass of details still facing them: Can they work out their compensation system? Can they build their corporate and finance practices into true power players? Can they forge a culture across a firm with this many lawyers in this many countries?

For months, since Washington-based Hogan & Hartson and London-based Lovells announced the merger, top partners have buzzed around the globe to sell the deal to clients and their fellow lawyers. Tech staffers have worked to pull together management, conflicts and other computer systems. Marketers have scurried to set up new website and sell the brand.

Despite all the work, the question remains: Is Hogan Lovells really a single firm? By traditional measures — sharing profits, a single compensation system and a single partnership — the answer is muddy. For tax and liability reasons, lawyers inside the United States and outside the United States will work in two separate partnerships, and profits will be pooled separately. A single comp system is to be phased in over time. “We’re looking at May 1 not as the finish line, but the starting point for the new firm,” said former Hogan Chairman J. Warren Gorrell Jr., who is co-CEO of Hogan Lovells.

At that starting line, the firm boasts 20,000 clients in about 80,000 ongoing matters; some 700 lawyers doing litigation work; and an instant top 10 ranking in terms of revenue and headcount. Gorrell said Hogan Lovells' work is roughly 35 percent corporate, 25 percent litigation, 15 percent finance, and the rest split between intellectual property and regulatory matters. Common clients between the legacy firms include Ford Motor Co., Barclays PLC, Bank of America Merrill Lynch, JPMorgan Chase & Co. and Iberdrola S.A., a Spanish energy company.

via Hogan Lovells Faces Challenge of Managing a Megafirm.