Archive for November, 2008|Monthly archive page

2009 Predictions

Monica Bay of Law Technology News has asked for some 2009 predictions for the ED space. Here are mine:

I agree with Monica in her post on EDD Update that some vendors will fail but I have a different explanation for why that will happen.  It seems to me that in today’s economy, big companies thrive and small companies flounder and that is not based on not having a poor business plan or giving poor service. Let’s face it, there is so much ED business that marginal litigation support companies have survived for years and will continue to survive. Why? Because contracts are awarded on the basis of personal contacts or poorly managed RFP procedures or just plain old misinformation. (more on that in a moment)
 
No, the companies that will fail will do so because of plain old economics. Some companies are living on investment capital or vc money and not actual business income. Those people will see the capital run out and the vc money dry up and they will fall by the wayside no matter how good their business plans, their execution or their staff.  If you’re not making money by bringing in projects you’re doomed. 
 
And the big companies which are doing acquisitions will close up some of the folks they buy because they don’t meet the corporate business plan. Here’s a good example from right here in New Orleans. Ricoh buys Ikon and then closes roughly 25 local Ikon shops, some of which are making money, including the one here in NO. The local Ikon shop is immediately purchased by Digital Legal, a regional lit support company with an office here. So the business being generated by that shop is still being done and the income is going to someone else because Ricoh doesn’t see themselves as a “street” vendor.  Two different business plans, both successful: one sees opportunity in the local market and one doesn’t.
 
Ralph Losey mentions the litigation boom that he sees for 2009. I agree but that boom will profit only the biggest companies. Big lit is being handled by big law and big law is using the big lit support companies.  Marketing is a negligible factor.  A regional company like DLS has no possible way of competing against Kroll or KPMG or Lexis, a fact of life we private consultants have known for several years. The regional market will consolidate into several key players in each market just as private consultants are dwindling to a handful as more and more of “us” join the big companies or a GC office. I predict in another year each region of the country will have one or two major regional players as local mom and pop shops lose business while George Socha and Craig Ball will be the last two private consultants left on the national scene.
 
So what is the key issue? Monica hit it on the head when she said ” …. educate the profession (read: talk in plain English).”   There’s the problem I think.  Right now we have too many people who understand each other talking (mainly to each other) in geek speak mode while the majority of attorneys don’t understand what we are talking about and don’t know how to ask good questions of vendors or explain themselves to judges. (I don’t like to speak for someone else but I seem to recall that Mike Arkfeld pegs it at 90% or more) Isn’t this really the biggest take away from J. Grimm’s finding in Victor Stanley, that we’ve erected a technical Tower of Babel that only an expert can understand and explain?
 
So the key is education. Ralph mentions law school courses and of course that is important but they won’t have any impact for 3-5 years. What we’ll see next year is more immediate impact educational efforts; The E-Discovery Training Institute sponsored by the Sedona Conference at Georgetown Law School, the ALSM standards effort, regional conferences like the Thomson LegalWorks, the expanding efforts by EDRM .. all designed to educate people now.  That I think will have be the biggest growth area of 2009 and have the biggest impact on the profession

 

Free Webinar on Key ESI Case Decisions

There have been several key court decisions this year that impact the collection and analysis of ESI.  Notable cases in this area include:

  • Victor Stanley v. Creative Pipe
  • U.S. v. O’Keefe
  • Equity Analytics v. Lundin
  • White v. Graceland College
  • Goodbys Creek v. Arch Insurance
  • Mancia v. Mayflower Textile

On Dec. 5th, Browning Marean will conduct a free webinar sponosred by CaseLogistix to discuss the implication of these cases and how they affect your practice.  You can register for the webinar here .     

If you can’t make it on the 5th, the session will be recorded and posted on the CaseLogistix web site.

End User Surveys Support docNative Paradigm

Earlier this year I conducted two separate surveys of end users regarding their experience with electronic discovery. The first was with the Chicago Law Bulletin Publishing Company that was sent out to Illinois attorneys. The second was with ILTA and went out to their members, who are primarily large firm IT staff.  Both surveys asked approximately 20 questions about the respondents’ level of exposure to eDiscovery matters, experiences with electronic discovery vendors and products.  Both also contained a specific question which asked for their thoughts on the most important issues facing them in this ever-increasing area of practice.
 
1. Education   
In both surveys, ‘education’ ranked in the top 3 of most important issues. The biggest surprise in the Illinois survey were the responses to the question which asked, ‘Are you familiar with the Federal Rules changes regarding electronic discovery?’ 70% answered ‘Yes,’ which means that 30% were not familiar with the rule changes.  The latter figure seems somewhat astonishing given the high degree of coverage and the flurry of CLE activity surrounding changes that went into effect in December 2006. In the ILTA survey, 90% of respondents were familiar with the ED-specific changes to the FRCP, but 40% did not know if their state had implemented such a rule change locally. 
 
2. Vendor Performance
 The findings from the ILTA survey seem to suggest that ED vendors still have a long way to go in satisfying clients on the service part of their deliverable. More than a third of the respondents said they are unhappy with the quality of the performance from those vendors The fact that price as a significant factor in determining project satisfaction had a nearly identical proportion of responses to timeliness and slightly behind project management tells me that reliability and efficiency are the areas where vendors need to concentrate.  I think it is most important that a vendor not try and achieve these goals through mere economies of scale, but through development of a deep technical and litigation-savvy knowledge base within its personnel.  
In the Illinois survey, the attorneys who answered with respect to the litigation support software they purchased from vendors confirmed my own experiences in working with various firms around the country that the vast majority of attorneys are either ambivalent towards, or unhappy with, the software they are employing.  In this case, 2/3 of the respondents declined to rate their software of choice at all and of those who did (25% of the respondents admitted that they didn’t actually use it themselves, but left that task to a staff member), 42% found their choice ‘satisfactory’ or ‘ok.’  An equal number of respondents (13%) were either very happy or very dissatisfied.
 
3. Workflow 
With the advent of electronic documents and new document types such as multi-page TIFFs, PDFs, emails, excel spreadsheets and audio files, the page-centric approach of Bates numbered single page TIFFs has faltered.  The paradigm that worked for 100 boxes of documents is simply too cumbersome and prohibitively expensive for cases that routinely handle hundreds of gigabytes of electronic information. 
I’ve previously mentioned this quote from John Turner, Senior Vice President and Chief Technology Officer of Anacomp, Inc. but I think it bears repeating:  “applications that retain the paradigm of the page and not the document will not be able to adequately support the new age of litigation. A modern platform must be able to review native documents that are not just paper equivalents, but must directly enable review of any file that is in common use in business today.  
Attorneys and their clients who focus on the new paradigm will save time and money by using this process for docu-centric native file review and I believe that we will shortly see technical solutions that will allow a Bates-like substitute to be employed within the native file production paradigm.
 
So what general observations can we take away from these surveys? E-discovery is cutting across all the legal demographics of firm size, case values and attorneys but a significant number of lawyers are still unfamiliar with the requirements and characteristics of electronic discovery. No single vendor is dominating the market and national vendors are clearly splitting the business with local shops. Although well known products such as Summation and Concordance have a high market presence they are being pushed by the rise of Web based applications and, although cost conscious, attorneys are rating both vendors and products on a number of other factors besides price.
That’s my perspective ..now tell me what you think.  

It’s NOT All About the Technology

In our discussions of the docNative Paradigm, there has been a tendency to focus on e-discovery technology more than the actual discovery process. But the process itself is under scrutiny from the judges who must deal with it and they are offering some interesting observations about what they want. 
Much attention has been paid lately to the string of decisions involving the use of search technology handed down by  Magistrate Judge John Facciola in U.S. v. O’Keefe, 537 F. Supp. 2d 14, 24 (D.D.C. 2008), and Equity Analytics v. Lundin, 248 F.R.D. 331, 333 (D.D.C. 2008), as well as Magistrate Judge Paul Grimm in Victor Stanley, Inc. v. Creative Pipe, Inc., Civil Action No. MJG-06-2662 (D. Md. May 29, 2008).
 
Judge Facciola opined that both lawyers and judges are technological neophytes who struggle to compose adeqate key word search terms for finding privileged documents in their ESI collections and should, instead, rely on experts to do so. Stating his preference that such searches be designed by qualified persons, Judge Grimm is willing to allow lawyer-initiated keyword search IF counsel can demonstrate adequate control of the process but sets the bar high for meeting that standard when he states: “Use of search and information retrieval methodology, for the purpose of identifying and withholding privileged or work product protected information from production, requires the utmost care in selecting methodology that is appropriate for the task … [and] careful advance planning by persons qualified to design effective search methodology. The implementation of the methodology selected should be tested for quality assurance; and the party selecting the methodology must be prepared to explain the rationale for the method chosen to the court, demonstrate that it is appropriate for the task, and show that it was properly implemented.” 

So high in fact that George Socha has mentioned at several West LegalWorks where we are speaking together that he believes the Creative Pipe decison requires law firms to engage outside experts for EVERY case. But that’s a discussion for another day.

But often overlooked in these discussions about the technology is the underlying prinicple of FRCP Rule One that requires the “just, speedy, and inexpensive determination of every action.” .  Indeed, 24 judges (including the Honorable Judges Shira Scheindlin, Andrew Peck, Paul Grimm, David Waxse, John Facciola and Herbert Dixon) have signed off on the Sedona Conference Cooperation Proclamation, issued on Oct. 7 and designed to refocus on litigating cases on their merits, not just on eDiscovery concerns.  Crafted to deal with the use of technology to frame overly broad discovery requests and repsonses, the Proclamation focuses instead on the process.

And it has already been endorsed in at least one opinion. Not surpisingly, Judge Grimm in  Mancia v. Mayflower Textile Services Co., Civ. No. 1:08-CV-00273-CCB (D. Md. October 15, 2008) uses a detailed examination of Rule 26(g), Fed. R. Civ. P., which requires every discovery disclosure, request, response or objection be signed by an attorney of record. The signature “certifies that to the best of the person’s knowledge, information, and belief formed after a reasonable inquiry,” the request is reasonable and the disclosure is complete and correct. In Judge Grimm’s opinion, Rule 26(g) is “the least understood or followed of the discovery rules.” and he clearly states that much of the blame for high priced e-discovery costs lies here and not with the e-discovery tools themselves.
 
You can read a very thoughtful analysis of this issue at Ralph Loseys blog but I think the point to keep in mind is that you need to use technology to speed up the discovery process and not bog it down in endless fights over privilege and production.  And THAT is exactly the point of the docNative paradigm.
 
That’s my take anyway …now tell me what you think.  

Overheard at West LegalWorks Last Week

I was in Chicago last week to speak at the West LegalWorks e-Discovery and Records Retention Conference. (it’s a  trifecta series that West does every fall: New York, Chicago and San Franciso. The SF show is coming up Dec. 10-11 at the Ritz Carlton)

While listening to some of the other excellent panelists, I heard the following observations which I think are worth repeating:

Browning Marean of DLA Piper:  “The quick peek provision of the FRCP ED rules is tantamount to malpractice.”

George Socha:  “Judge Grimms ruling in Victor Stanley requires firms to engage an outside expert in every case.”

Florinda Balridge (Fulbright Jaworski) and Mary Pat Poteet (DLA Piper) : “More and more our corporate clients are contacting ED vendors directly and leaving us out of the loop.”

Three very strong statements about the current state of the ED space:  now tell me what you think.

Is the Bates Stamp Really Dead?

 

In the course of talking about the docNative Paradigm, I’ve done several webinars for Anacomp that were rather facetiously titled with some variation of the above heading. Of course we didn’t take that position but held, rather, that there is no need to Bates stamp every document at the beginning of the discovery process.
For years, litigators have relied on a system of scanning and sequentially numbering individual document pages, extracting the text electronically and producing single page TIFF files as the standard method of working with electronic documents in the discovery process. 

 

I’ve called this process of uniquely identifying each page the “pagecentric” approach but it is commonly called Bates numbering in reference to Edwin G. Bates who patented the original document numbering machine. The Bates Manufacturing Co. was eventually acquired by Edison Phonograph Works and their machine so dominated the market that numbers imprinted on multi-page documents became generally referred to as Bates numbers.

 

Used sporadically for years by lawyers, Bates numbering became more widespread in the 1980’s with the rapid increase in the number of lawsuits involving large numbers of documents which was fueled by the growth of word processors and personal computers. The marking of each document with a unique alphanumeric identifier helped track discovery responses, refer to specific pages of a document during depositions and even better track which documents were withheld on the basis of privilege or work product.

 

The routine method of handling documents in large cases became the following: 1) copy the documents, 2) manually stamp Bates numbers the copies and then 3) copy the Bates-numbered pages. Indeed, The Manual for Complex Litigation published by the Federal Judicial Center (The Manual) specifically states at Section 11.441, Identification Systems,:

 

Counsel should be informed that consecutive numbering is usually the practicable method; blocks of numbers are assigned to each party in advance to make the source of each document immediately apparent. Every page of every document is Bates-stamped consecutively. The document’s number may be later used to designate it; if the document is identified differently in the course of a deposition or on an exhibit list, the stamped number should be included as a cross-reference. If other means of designation are used, no designation should be assigned to more than one document, and the same document should not receive more than one designation unless counsel have reason to refer to different copies of the same document. In multitrack depositions, a block of numbers should be assigned to each deposition in advance. To avoid later disputes, a log should record each document produced and should indicate by, to whom, and on what date production was made. A record of the documents produced by a party and copied by an opposing party may also be useful.

 

As computer systems came to routinely use electronic images of documents which were indexed in computerized databases, electronic Bates numbering was instituted and the page-centric paradigm continued. Each separate page was scanned into a single page TIFF format, electronic Bates numbers were added during scanning and that electronic Bates number was used to link each image to a specific record in the database.

 

If a record referred to a multi-page document captured in multiple TIFF images, the software creating the images generated a “load file” which specified the range of images by beginning and ending Bates number for the document. The advantage to this process was that one could immediately locate any page of a document that had thousands of pages by referring to the Bates number and thus introduce only those pages needed as exhibits at a deposition or trial, rather than introducing the entire document and making the witness page through it to the needed pages.

 

This worked fairly well at first but was most efficient for relatively small amounts of pages of traditional legal documents. With the advent of electronic documents and new document types such as multi-page TIFFs and PDFs, emails, excel spreadsheets and audio files, the page-centric approach quickly falters. Indeed, even The Manual states in Section 11.441:

 

However, databases containing millions of data elements, none of which are meaningful alone, can be difficult or impossible to break down and organize in a way directly analogous to conventional document collections. Special consideration should be given to their identification and handling.

 

And the growing preference for using native files in productions makes Bates numbering problematic, since native files cannot be Bates numbered. The alternative employed by many e-discovery vendors is to generate TIFF images from the native files and Bates number those images. But this process complicates native file review, and at anywhere from $0.08 -$0.20 per TIFF, also adds considerable cost to the process.

 

Why is this true?  I asked John Turner, Senior Vice President and Chief Technology Officer of Anacomp, who told me  “To fully understand why, I need to go back to the start of the discovery process at what the EDRM project calls the “Processing” stage. At a high level this stage can be broken down into the following steps: (1) Data is received from the customer; (2) This data is culled and deduplicated; (3) The metadata is extracted; (4) The text is extracted; and (5) The document is TIFFed. (This can be done as single page or multi page, but is usually single page.)”. 

 

He continued, “One consequence of this is that the relationship of the pages to themselves and to the document is artificially broken.  It also breaks the relationship of an email with its attachment or of a document with an embedded file, or ZIP file. All of them then have to be recreated in the review platform.”

Which means that if the Bates number isn’t actually dead, the cost of keeping it alive at the front end of the EDRM model makes it too expensive to live there much longer.

 

Now tell me what you think.