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Ediscovery rulings have created a massive burden on organizations of all sizes. See how SaaS solutions can save your company time and money with online document storage and analysis.
In May 2015, international law firm Norton Rose Fulbright released its Litigation Trends Survey, based on responses from more than 800 corporate counsel representing companies across 26 countries on disputes-related issues and concerns. Survey results revealed that 55% of US-based respondents had experienced more than five lawsuits filed against their companies in the past year and that 25% of US companies had litigation budgets of $10 million or more.
"Our survey clearly demonstrates that the litigation and regulatory environment in the United States continues to pose some of the greatest risks which businesses from around the world face," said Richard Krumholz, Head of Dispute Resolution and Litigration, United States, for Norton Rose Fulbright. "This is reflected in rising litigation budgets and the size of disputes-focused staff compared to peer companies around the globally [sic]."
One major risk is the time and expense of electronic discovery.
In an in-depth 2012 research study, the nonprofit Rand Institute for Civil Justice conducted case studies of eight large corporations, alongside a review of literature on ediscovery. It found that in this laborious legal process, organizations were spending 73% of their time on document review, which involved the evaluation of digital information to identify documents that were relevant to a legal matter, along with documents that would be considered privileged and that could be withheld. Another 19% of their time was spent processing these documents to further reduce their volume. The remaining time was spent collecting documents at the beginning of the process.
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John Tredennick, an attorney and CEO of Catalyst Repository Systems, a cloud-based ediscovery service, noted that ediscovery process time, labor, and costs have soared since the decisions rendered by Judge Shira Scheindlin from the Southern District of New York in Pension Committee (2010) and Sekisui American Corp. vs. Hart (2013). The rulings in these cases increased the requirements for organizations to store and preserve digital documents.
"These rulings make it uncertain for organizations to know exactly which documents they must preserve," Tredennick said. Consequently, organizations preserve almost all documents—and the mountain of ediscovery materials to root through grows exponentially—as do storage costs.
And this brings up a question for organizations:
Should they start considering their legal processes as candidates for business process reengineering in the same way that they have reengineered manufacturing, service, sales, and other functions to take out costs?
"In civil litigation, both sides of the dispute have the obligation to provide documentation," Tredennick said. "Years ago as a trial lawyer, when I first got into the discovery process of a civil litigation, we were looking at document populations of perhaps 30,000 documents. However, with the growth of digital documentation, in a major litigation this document population could expand to 20 or 30 million documents."
Tredennick's idea was to help companies tamp down their litigation costs by providing a cloud-based analytics solution that securely stores edocuments and also applies analytics to ediscovery that are based on principles of legal review. This helps pare down document populations for corporate legal staffs and/or the outside law firms they retain to represent them.
"We use predictive analytics in the document review process," he said. "With the analytics, we often find that 75% to 80% of the relevance in a litigation can be found in a population of the most 6,000 highly ranked documents for relevance.... When you're talking about an average cost of $2 per document for a manual review and you have 1.5 million docents to review, this can save companies a lot of money."
Legal cloud analytics firms like Catalyst use approaches similar to those used in music applications like Pandora, which get "trained" according to the types of songs you like to listen to. In the case of ediscovery, the analytics identify documents based on keywords that are most relevant to the litigation.
The takeaway for small companies, and even for large corporations with resident legal staffs, is that there are alternate approaches to ediscovery that can save time and prove to be highly cost effective.
"You no longer need a physical law library because everything's online," Tredennick said. "Companies now also have SaaS (software-as-a-service) ediscovery options that use analytics to save time and money and that offer best practices in using this new model."