While it's true that law firms of a certain size and expertise are increasingly weighing whether and how to bring eDiscovery in-house, the rapid maturation of cloud-based eDiscovery software has done much to change these calculations. It was once the case that firms had three options: pitch all eDiscovery work to vendors, invest in high-calorie on-premise hardware and software in order to perform this work internally, or pursue a hybrid model where, depending on the nature of the work, some of it is fielded internally and some outsourced to vendor.
Increasingly, firms who have enough work to justify the large expense have turned to “managed services” -- itself a hybrid approach where the vendor provides the majority or all of the technology infrastructure, but also personnel who, in the best case scenario, serve as an extension of the firm’s full-time litigation support team (project managers, consultants, etc.). This is a boon for the managed services company, who can charge both for its complex, clunky technology and the highly-skilled labor needed to use it.
Where the cloud excels above these alternatives is in its ability to be a force multiplier. Efficiency and scalability are among its hallmarks. So, ideally, firms can do more with less with the right cloud platform. Work that would otherwise have to be outsourced to vendors or managed service providers can be completed with internal resources at a fraction of the time and cost due to these platforms’ ability to automate, or eliminate entirely, many of the steps involved.
Data processing is one of these use cases. In the vendor world, raw data may be collected by the law firm, then sent away to the vendor to be prepared for review. The processed data is then made accessible via a review platform to the firm, or sent back to the firm so that it can be loaded into its in-house review tool. It's a headache just to read. With a cloud platform, the firm may simply invite its client into its account and have it begin uploading data. Drag, drop, done. The data is automatically processed and made immediately accessible to the firm’s attorneys for analysis and review.
Below is a review of the four buckets in which firms derive additional value from adopting the right cloud-based discovery platform. It answers the question: why cloud?
Capture More Billable Work
Law firms that primarily rely on vendors or inefficient internal tools to perform eDiscovery for clients are most likely forfeiting billable work. A cloud-based solution provides a corrective. Specifically, it will…
Expand the firm’s capacity to bring billable work in-house
Smaller law firms that have moved to the cloud like to say that it allows them to level up against bigger competitors. But the force-multiplier effects are felt regardless of the firm's size. The basic concept at play is that firm personnel can now perform -- and, therefore, bill for -- work that would otherwise be completely outsourced to the vendor, whose cost would be passed straight through to the client. In other words, firms cut out the middle man (the vendor) by taking advantage of "self-service" cloud solutions that automate the work a vendor would perform. It is also true that firm personnel are likely to be more productive with tools that are a) instantly accessible from anywhere (i.e. on a tablet at home) and b) easy to use (think Dropbox).
Often times, this is a win for the firm and the client, because the additional fees billed by the firm (for everything from data processing, hosting, ECA and culling to more consultative project management/ESI analysis fees) often work out to be less than what a vendor would have charged. Cloud-based tools, due to their user-friendly and infinitely scalable nature, are also much more likely to be widely adopted among firm staff and attorneys. This cuts down on the phenomenon of firm personnel "going off the reservation," or outsourcing work to their personal vendors of choice in lieu of using in-house tools -- and thereby losing out on that billable work (or, worse case, incurring an unexpectedly large vendor fee the client refuses to pay).
Raise value of support personnel
Same idea here. By taking on more of the high-value evidentiary aspects of client work, such as meet-and-confer preparation, early case assessment, issue coding, and project management, internal staff take on the capacity to perform more billable work -- and can bill more for that work to boot. Some firms have built out entire litigation support departments around cloud-based eDiscovery platforms, representing a new line of business (i.e. where the lit support team essentially becomes a high-performing, low cost in-house vendor).
Reduce attorney "time to review"
Depending on the amount and type of work a firm and its individual lawyers have, cloud-based eDiscovery platforms can reduce the time it takes attorneys to begin performing lucrative document review work. Instead of waiting between 48 hours and a week -- best case -- to receive processed data from the vendor and have it made accessible for review, with a cloud platform, where data is automatically processed and hosted for review, attorneys can dig into billable review work within hours. Their utilization rate thus goes up, and they are able to bill more hours over the course the year.
eDiscovery can often be a black box. The firm's limit visibility into the work that is actually being performed either internally by its support personnel or by vendors -- either due to failure to communicate, lack of technical understanding (i.e. the attorney has no insight into what vendor personnel or lit support are actually doing), or insufficient invoicing -- manifests itself in expensive ways.
One of them is write-offs: where the billing attorney will either feel uncomfortable charging the client for eDiscovery due to inability to convey its value, or the client will balk at paying eDiscovery fees for the same reason. Cloud-based discovery solutions -- again, due to their ease of use (powerful simplicity, as Logikcull calls it) -- provide superior visibility into the work being performed, are easier for less technically savvy attorneys and clients to understand, and, relatedly, generally afford more cost predictability. Thus, write-offs are reduced.
Extend the length of the client relationship
Among the less clearly understood aspects of bringing eDiscovery in-house is the ability of the firm to develop a "stickier" relationship with its clients. This happens for at least two reasons:
a) The firm has more insight into its client's data, allowing the firm to provide superior value at a lower cost over time (because it learns more about the legal issues it faces and can develop an eDiscovery "playbook") and;
b) The firm accumulates a growing volume of client data in the cloud platform over time, making it less likely that the client will rip-and-replace.
Provide Superior Client Value
In addition to the firm's ability to develop the aforementioned eDiscovery playbook, where the firm is constantly honing and refining as it gains more knowledge about the client's litigation portfolio; the types of cases and the costs involved; and its custodians and its data, cloud-based eDiscovery platforms also empower firms to...
Improve Service Levels
The time and efficiency gains firms realize from cloud-based automation allow them to make more attractive service guarantees to clients and prospects. Turnaround time is among the biggest value adds, where the firm can cut the time between collecting or receiving client data and hosting it for review from days to, in some cases, minutes. It is increasingly common for firm's to invite their clients into the cloud-based environment so they can directly upload data, or so firm personnel can either perform or supervise a remote collection.
Bring institutional knowledge to bear on client cases
This is perhaps the most underappreciated value cloud-based platforms can provide. To the extent that the cloud product is easy to use and easy to access, high-level firm attorneys who are otherwise shut out from the eDiscovery process due to its technical complexity can dive into the important work of finding and making sense of evidence. Attorneys are able to add value over and above what vendor personnel or firm support staff can offer. And, again, they are able to bill (and bill more) for this work.
Win the meet-and-confer
It is often said that the side that wins the meet-and-confer -- where the parties hammer out the eDiscovery plan in the case -- dictates discovery, and has an immediate leg up in the dispute. It is imperative, then, to have a firm grasp on the evidentiary issues going into this conference -- an increasingly difficult challenge as recent procedural rule changes have moved up deadlines. Because cloud-based tools like Logikcull eliminate the time waste associated with working with vendors and deliver faster insights into large data collections, performing the ECA and due diligence necessary to prepare for the meet-and-confer is much easier and time- and cost-effective.
Provide predictable billing
Billing can be especially volatile when it comes to eDiscovery, and a point of contention between firm and client. Vendor costs that the firm passes through are typically unpredictable and can include hidden and/or unexpected fees that accrue with the size of the data (e.g. TIFFing and OCR fees). Cloud-based eDiscovery providers, by virtue of their predictable billing models (usually either flat-fee or pay-as-you-go), solve this problem, providing a transparent billing framework that allows the firm to clearly state upfront what the costs will likely be, and to pass them through in a clear manner.
Eliminate IT Costs
Cloud-based eDiscovery platforms, due to their lightweight deployment, accessibility, ease of use and transparent cost structure, reduce the soft and hard costs associated with on-premise hardware and software. Specifically, they...
Eliminate maintenance and upgrade costs
On-premise software can be expensive to update and maintain as new versions are periodically rolled out and existing programs must be replaced. Cloud-based systems update automatically such that you always have instant access to the newest features. For example, several hundred Logikcull feature upgrades and tweaks are released each year -- updates that are deployed to the entire Logikcull user base as they are completed, such that there is almost no time lag between when the new software is created and when it becomes available. For legacy software, it often takes up to 6 months or more from the time the update is released for the firm to actually begin using it, if they use it at all.
Reduce spend on data storage
Firms that host their own on-premise instances of eDiscovery hardware/software can often incur large costs associated with storage. The falling cost of storage is offset by the increasing volume of data in litigation, the uncertain though usually prolonged duration of matters, and the need to archive eDiscovery work lest it become necessary to access should the matter "comes back to life" or is appealed. Some firms also incur large storage costs associated with record disposition policies that demand files be kept for years. Cloud-based discovery systems almost entirely eliminate these costs, and, due to their distribution models, are able to provide storage at a fraction of the cost.
Eliminate soft costs associated with training
When new software or a new version of existing software is deployed across the firm, there is always a learning and adoption curb. This curb gets steeper the more complex the tool is. The cost incurred here is hard to calculate, but at the very least, the firm experiences a reduction in billable capacity as users come up to speed. Ease-of-use, intuitive user interfaces and instant deployment are three hallmarks of high-quality cloud platforms, which, for these reasons, generally require minimal user training. It not unusual, for example, for Logikcull customers to begin using the software literally moments after they buy, even before onboarding occurs. See below...
Reduce risk of "failure to launch"
It is not unusual for organizations of any type to buy software only to not use it. This happens for a number of reasons: technical complexity, license limitations (i.e. would-be users don't always have access to "seats"), deployment logistics, general disinterest, bad fit, etc. Cloud addresses this in a couple ways. First, most providers allow some version of try-before-you-buy or pay-as-you-go, so that the firm can use the software in test instances before pulling the trigger on a larger deployment. In Logikcull's case, where customers can pay by data volume on a non-committal basis -- and have unlimited users and matters -- there may never be a need to "deploy" at all. Instead, the firm can add users as needed. The point is, no long-term commitment need be made until there is absolute certainty the product is a good fit. Secondly, cloud software's user-friendly nature (e.g. drag-n-drop automation) reduces the chance of a failure to deploy due to technical complexity or a high training curve.
Reduce Data Risk Firm-wide
As creatures trained to avert risk at every turn, law firms are increasingly moving to the cloud to instantly upgrade security around client data -- outsourcing that function to cloud providers whose businesses and reputations rely on their ability to protect their customer's information. Cloud-based eDiscovery software, to the extent that it provides a truly "closed-loop" system, where all channels into and out of the platform are secure, and all data is encrypted at risk, can help reduce the risk of data loss, theft or manipulation. Malpractice liability is also diminished. Specifically, cloud-based systems...
Reduce malpractice exposure by ensuring data integrity
This is where it is important to note that not all cloud-based discovery platforms are created equal. But the most trusted solutions address malpractice risks in a number of ways. First, they capture and preserve data in a manner that gives a full picture of the evidence. In a side-by-side comparison with a popular vendor, it was found that Logikcull captures up to 98% more information during the processing stage. In fact, it is often the case that vendors or legacy tools will flat-out miss important evidence due to failure to properly ingest, index or otherwise process it. It goes without saying that failing to produce key information can lead to sanctions and malpractice.
Secondly, cloud-based platforms like Logikcull log activity within the system as it happens. This helps for collaborative purposes (so, for instance, reviewers working simultaneously don't step on each other's work), but it also serves as a real-time audit log showing all the steps the firm took in the course of discovery. This record can become a key asset if the firm's efforts are ever called into question by an opposing party, or the client.
Limit data exposed to loss or theft by eliminating "touch points"
According to IBM, 2016 was the worst ever for data security, ushering in the "mega breach" as more than four billion total records were compromised. As we've repeatedly warned, eDiscovery represents low-hanging fruit for hackers and other cybercriminals, and often represents a point of breakdown in a firm's data custody workflow, should the firm even have one.
Cybersecurity professionals are quick to point out that data is most vulnerable when it is in motion. Well eDiscovery is a process of motion. It is likely the case that from the time the data leaves the client's premises to when it is received by the firm and either staged for review or sent off to a third-party vendor, that data is being handled or "touched" more than a dozen times. It is also the case that this data is being repeatedly copied throughout this process (for instance, downloading a document from a review platform to an email system and then to a personal device). Scarily, some firms that still deal in physical media have on-site "evidence lockers," where hard drives basically sit in a jail cell of the type you might find in a Richard Price novel.
Cloud-based eDiscovery platforms eliminate much of this risk by providing a secure, encrypted discovery hub where user roles are permissions-based and restricted by level of access, and where all data-transferring channels are secured. So, instead of having a client's hard drive shipped to it from across the country, the firm can instead invite the client into the cloud-based platform to begin loading data. Data in motion (e.g. moving from the client's systems to the cloud) is encrypted, as is inactive data stored "at rest." With tools like ShareSafe, firms can also share productions with opposing parties through a secure link. The upshot is that the number of points at which data is exposed -- and the number of times it is "touched -- are greatly minimized.
If you would like to learn more about how cloud-based discovery solutions like Logikcull can help grow your firm's business and protect it from looming risks, please request a free consultation or check out our quick explainer video. If you have comments or questions about this post, please contact Robert Hilson at [email protected].