Are lawyers better at evidence collection than tech companies?
Whenever a law firm has a case involving large volumes of electronic evidence, there are thousands of companies clamoring to do the dirty work of collecting and managing that evidence. But a few large law firms have looked at the job of e-discovery and built their own in-house services. A few have even turned it into a profitable business.
E-discovery has been a challenge for law firms for more than a decade. In several high-profile cases, including Enron-related litigation and Zubulake v. Warburg from 2004, law firms and their clients were penalized heavily for failing to preserve electronic evidence.
“We saw at the time after the Enron investigations that electronic evidence is a massive problem,” says Chris Davies, a partner with Wilmer Cutler Pickering Hale and Dorr in Washington, D.C., “and you can’t take a defensive position or you open yourself to spoliation charges. We decided to get our arms around the problem.”
The result is that several large firms, including WilmerHale and Winston & Strawn, now have an in-house shop to process, manage and review electronic evidence.
Most law firms host litigation databases and review software for processing electronic data in-house. The new model is a full-service e-discovery consultancy behind the law firm’s firewall. And these departments are not just a litigation support team for the firms’ own cases: They actively compete with e-discovery consultants and vendors in the open market.
And in some cases such a service can become a new profit center for law firms. Winston & Strawn says it has billed more than 200,000 hours of e-discovery services in more than 1,000 cases. The company now employs 26 technical employees in addition to project managers and has a team of in-house review attorneys dedicated to the operation. And in the past two years, the group has produced more than $20 million in revenue, says Winston attorney John Rosenthal, who leads the practice. (Of course, that is small potatoes compared to the firm’s total revenues of $785.5 million in 2014.)
E-discovery vendors argue that law firms that try to operate an e-discovery litigation service department are not going to be able to offer competitive services. Specifically, they say law firms cannot offer the same level of technical expertise and cannot offer competitive pricing.
“The profit center idea is shortsighted,” says Andy Wilson, CEO of vendor Logikcull. “The law firm model is people-powered and can’t be as flexible in what they charge.”
AN INTEGRATED APPROACH
But law firms argue they are not trying to offer lower-cost services. Their goal is to deliver better service that is integrated with the legal services being provided. Because of this integration, they contend that the services they offer will be more effective and perhaps less expensive in the long run.
“Look at it this way: An outside vendor cannot do a deep download on formal intake, understand the facts,” says Rosenthal. “In a typical case, clients and vendors take weeks or months to get up to speed. Because we’re behind the firewall, when we’re hired we see the data and begin working on it in days.”
Proponents of law firm e-discovery departments believe that any e-discovery company can acquire the technology needed for the job, but a law firm will always offer better personnel and processes.
“What we’re doing is not a standard profit center, but more of a complementary service to our core strengths,” Davies says.
COST AND VALUE
For example, unlike e-discovery vendors, which often hire contract attorneys as needed for particular matters, Winston & Strawn maintains two review centers with a team of full-time, permanent reviewers and project managers. The group acknowledges its hourly rates are perhaps higher than many vendors, but it argues that full-time reviewers offer much better service.
“Listen, it’s easier to hire contract reviewers as needed, but then you have to train them and get people up to speed,” says Rosenthal. “Our people are on staff and ready to go, and if you look at the total project cost, it is going to be the same or much lower than anyone out there.”
It is important to note that in many cases, clients already have an e-discovery vendor they work with for some parts of the litigation process. The law firms we talked to say they are willing and able to offer service in conjunction with other vendors when necessary.
“We’re not technologists. We’re agnostic about technology,” says Davies. “We use other platforms in many cases. And even when there is a preferred vendor, our process is flexible, so we can choose the elements needed.”
In a cutthroat e-discovery industry battling to offer the lowest prices, law firms might be in the best position to offer high-tech expertise in litigation.
“The e-discovery service is built on the same foundation as the rest of our legal representation,” Davies says. “Our goal is always to offer the highest-quality representation, and we think clients will always come back if we do it well and as cost-effectively as possible.”
This article originally appeared in the November 2015 issue of the ABA Journal with this headline: “Home e-Cooking: Are lawyers better at evidence collection than tech companies?”
