Closing The Loop

For years, eDiscovery has been a burden on the legal system. Expensive vendors, costly collections, and massive data dumps weaponized the process, turning discovery into something most clients didn’t want to pay for and most lawyers didn’t have the resources, technology, or skills to handle. Thankfully, that era of eDiscovery is coming to an end.

Today, the technology exists to turn discovery from a burden into an opportunity, reducing the costs and barriers of the discovery process and allowing those who were once shut out of document-intensive cases, largely small and medium-sized firms, a chance to square off against even the biggest competitors—and win.


The Path to Discovery 3.0

In the old days of discovery, evidence was kept in secured lockers, produced to the other party in bankers boxes, read over page by page—a tedious task, sure, but one whose downsides were limited by the limited information available. A single four-drawer file cabinet, after all, can hold only about 10,000 pages, the equivalent of about one-third of a gigabyte of data today, and there is only so much room for filing cabinets in the typical office.

As more and more information became digitized, thanks to the rise of personal computers, the spread of email, and the growth in data storage, Discovery 1.0 gave way to Discovery 2.0 and the birth of the eDiscovery industry.

And Discovery 2.0 sucked.

Suddenly, there was a tsunami of new, discoverable information available. Paper documents were supplemented by massive amounts of electronically stored information (ESI), in the form of emails, word processing documents, electronic spreadsheets and presentations, but few legal professionals had the capacity or resources to deal with these new sources of evidence effectively.

A whole industry arose to help the profession handle eDiscovery, first as a small group of glorified copy shops and expanding from there. Technologies originally designed in the early 80s were unleashed on ESI, so that basements full of contract lawyers could work 14-hour days reviewing emails, document by document, on clunky, complex review platforms. Consultants made their fortune advising law firms on how to approach massive discovery projects. Vendors popped up throughout the country, bringing needed technological expertise to the process, but nickle-and-diming users with ridiculous $250-per-gig data ingestion fees and penny-per-page Bates stamping charges. One widely-circulated report from 2011 estimated that “conducting an electronic discovery event may cost upwards of $30,000 per gigabyte”—or about 60 percent of the median household income at the time.

Consider, for example, the volume of evidence available in the long-running (endless?) patent litigation between tech giants Apple and Samsung. For just one lawsuit against Apple (out of many), Samsung collected and processed more than 11 million documents, totaling 3.6 terabytes of data. (That’s about 11,000 filing cabinets worth of information.) Guided by one of the biggest law firms in the country, Samsung spent $13 million on data processing and hosting  alone, in just a 20-month period. That bill does not take into account the cost of attorney hours devoted to discovery, which is often estimated to account for more than 70 percent of all discovery costs.

Then, during that multi-million-dollar doc review, one of Samsung’s outside counsel disclosed a sensitive, and improperly redacted, Apple contract obtained through discovery. Despite being covered by a protective order, the document was then uploaded to Samsung’s internal intranet and “went viral.” Apple eventually found out and sanctions soon followed.

In the end, Samsung won a mere $158,000 on its offensive patent claims, about one percent of the sum it spent on eDiscovery vendors.

That’s Discovery 2.0 in a nutshell: risky, expensive, difficult—and a major challenge to the effective administration of justice in America, to boot.

A company like Apple or Samsung may have been able to shoulder a million-dollar discovery burden in a “bet the company” lawsuit, but the average litigant has no where near those resources. Hell, a quarter of federal litigants can’t even get a lawyer. When even recovering a single email account can take days and cost thousands of dollars in vendor fees, it’s no wonder that Discovery 2.0 “may, in the long run, drive an entire economic class out of the federal court for lack of means to engage,” as the U.S. Magistrate Judge John Facciola once put it.

Many lawyers, too, were at a disadvantage. If you didn’t have a familiarity with data science, or your clients couldn’t afford to spend thousands on vendors, well, you were either left searching through documents one-by-one in Outlook or Adobe, or you were forced to forgo thorough discovery altogether.

Take, for example, Ellen Pao’s headline-making gender discrimination lawsuit against Silicon Valley venture capital firm Kleiner Perkins. Pao ended up losing her suit and, as she tells it, the burdens of discovery were largely to blame. She wrote recently:

Since the trial, I have had time to think of all the things I wished I’d done differently. I might have had better luck with public opinion, for instance, if I’d spent more time with the press and prepared a few pages of talking points every day, like Kleiner had. But Kleiner also had tremendous resources that I couldn’t match, and it made a difference.

That resource disparity left Pao, a Harvard-educated attorney, simply outspent and outgunned:

For example, I didn’t have time to go through all my emails to figure out which ones to give Kleiner, so during the discovery process we gave them practically everything, some 700,000 emails — most of which we could have legally withheld. Kleiner meanwhile handed over just 5,000 emails, claiming they didn’t have the resources to search for anything other than emails that we specifically requested. They did have the resources to pick over my emails, though — I heard they hired a team in India to read and sort through every single one.

During depositions, they brought up everything from my nanny’s contract to an exercise I’d done in therapy where I listed resentments. Emails to friends, emails to my husband, emails to other family members, even emails to my lawyers.  

Let’s repeat: Discovery 2.0 sucks.

Thankfully, we’re approaching the end of the that era. While cumbersome eDiscovery software, costly vendors, and mountainous ESI still exist, legal professionals now have the technology available to help them level the playing field, even to flourish in the face of expanding discovery and massive data growth.


Thriving in Discovery 3.0

You’ve probably heard about the coming explosion in data generation and how it will challenge many of the basic functions of the legal profession. Those worries are valid. Data is exploding, and it will be a challenge. But, unlike under Discovery 2.0, there is now technology readily and widely available to successfully meet these challenges. Where eDiscovery was once a barrier to so many, it can now be an opportunity.

In the coming years, the amount of discoverable information will continue to increase as our lives and workplaces become increasingly digitized. Smartphones, smart cars, messaging apps, office collaboration tools, internet-connected toilets, they’re all already creating massive amounts of data that is turning up in litigation. (Well, not the toilets.) Instead of gigabytes of ESI, lawyers are now regularly dealing with terabytes of data. That is already expanding to petabytes, or millions of gigabytes, in some cases.

This data growth poses major problems for Discovery 2.0. Such growth “makes the discovery process much more difficult,” Judge Shira A. Scheindlin warns. It is “going to still be a problem for years and years to come,” Magistrate Judge Andrew J. Peck confirms. “It undoubtedly is going to be a challenge,” Magistrate Judge James C. Francis III cautions. After all, the burdens of eDiscovery will only grow more burdensome when already outdated eDiscovery practices are applied to ever-growing amounts of data.

But for forward-thinking attorneys, this new period of eDiscovery, Discovery 3.0, presents significant opportunities for growth. That’s because the technology exists to cull through enormous amounts of ESI in a fraction of the time it would have once taken, and, what’s more, to deliver powerful evidentiary insights that illuminate substantive issues. This is to say, in Discovery 3.0, information becomes a resource to highlight the truth, not a weapon to hide it.

Cloud-based discovery automation instantly handles thousands of steps, from Bates stamping to OCRing to virus scanning, that vendors used to do (and charge for) task by task. Smart filtering allows legal professionals to quickly focus in on the most important documents. And because this technology is on the cloud, eDiscovery projects can begin almost instantly, by simply uploading data to the platform from anywhere and on any device, without spending days waiting for discs to arrive in the mail or third-party vendors to schedule data ingestion.

Take a case like Pao’s. Overwhelmed by the costs of eDiscovery, she simply handed everything over including files that were irrelevant and potentially privileged—a data dump born of necessity. With Discovery 3.0, Pao’s legal team could have quickly culled through her emails. Discovery automation technology could have instantly identified potentially privileged documents. Filtering could have allowed the team to quickly separate the wheat from the chaff.

Suddenly, having a team of offshore contractors looking through documents page by page isn’t an advantage, it’s an unnecessary hindrance. Discovery 3.0 technology can handle those tasks quickly, easily, and for much less cost.

Further, because Discovery 3.0 makes the process so much easier, law firms can bring more of their discovery work in-house. Instead of clients paying for expensive vendors, the work is conducted by the firm itself, letting lawyers turn their eDiscovery process into a significant driver of growth.

Imagine a case involving 10 gigabytes of email. At 3,000 documents a gigabyte, that’s about 30,000 documents requiring review. Under Discovery 2.0, attorneys would click through those documents individually, at a rate of about $250 an hour and a total cost of almost $200,000. That expenses may be so high that clients simply refuse to pay for it. The resources needed to conduct the review would be so great that many firms just wouldn’t be able to handle it.

That’s no longer the case. Smart filtering, such as limiting documents by date range or focusing in on only those containing specific keywords, could eliminate the need to review up to 95 percent of those documents. That leaves only 1,500 documents to evaluate. Assuming an attorney reviews 50 documents an hour, that’s $7,500—savings of about $192,000. And when the discovery is done in house, rather than through vendors, that means lower costs to the client and more billable hours for the law firm.

In many ways, those practitioners previously shut out by Discovery 2.0’s excessive costs are best positioned to benefit from this new approach to eDiscovery. Many law firms, particularly Big Law firms with their armies of first year associate doc reviewers and billion-dollar, document-intensive corporate cases, have over invested in Discovery 2.0. They’ve built costly on-premise discovery solutions that they hang on to years after their utility has passed. Or they use the same billion-dollar case approach to discovery for every matter. Or they’re locked into a vendor-based approach that results in an increasingly expensive, slow, and frustrating client experience. 

Savvy lawyers, those who embrace this new approach to discovery, aren’t just on equal footing with these law firms due to new technology. They now have a distinct advantage.


This post is based on a speech given by Logikcull CEO and co-founder, Andy Wilson, at the Clio Cloud Conference last month. Click here for more information on how Logikcull is bringing eDiscovery to Clio, helping lawyers land bigger cases, larger clients, and more billable hours.

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