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May 02, 2010

Are We Paying Five Times Too Much for E-discovery?

Leaky bucket The problem with proportionality analyses is that they make no provision for distortion of cost attributable to incompetence and disorganization.  They simply accept the unacceptable and make it their baseline.
 

Each time I read lawyers' assessment of the justice system as "broken" and see e-discovery blamed, I wonder if the commentators bring sufficient skill respecting ESI and information systems to the table. Are they using cost-effective methods and forms?  Are they fully conversant in the nature, location and volume of the client's systems and ESI?  Have they been transparent and cooperative in dealing with the other side?  Did they really perform well, only to find themselves at the mercy of a craven opponent and crazed judge?  Or are they conveniently ignoring how their own failings with ESI contribute to waste and excess?

 
On Friday, I asked several of the most respected lawyer-experts in e-discovery how much, if any, of the current cost of electronic discovery they attribute to waste, and how much of that waste was the result of lawyer incompetence.  I was shocked by what I heard--not because I disagreed with the numbers but because of the consensus and conviction with which they were offered. 
One of the top commentators said, "80% and 80%."  No one got below 70% in estimating the waste, nor below 80% laying blame at the lawyers' feet.  
 
If they're right--and I expect they're close--we pay five times too much for e-discovery simply because we don't do it well enough to eliminate needless waste.  Two-thirds of the money spent on e-discovery is wasted solely because the lawyers have little or no idea what they are doing.  The upshot is that those pushing the proportionality agenda make no provision for competence nor demand the elimination of the waste.  What's spent on e-discovery shouldn't be compared to any assumed "value" of a case until waste and incompetence are first factored out.  Else, the changes proposed reward the most incompetent wastrels who spend the fastest with least to show for the effort and expense.
 
In principle, I applaud proportionality.  It's a concept, like "reasonableness" or "good cause" that sounds like mom and apple pie, until it's a stalking horse to keep proof of misconduct from seeing the light of day.  The argument that you don't spend $15,000.00 in discovery on a $14,000.00 case is unassailable; but, it doesn't hold water if that $15,000.00 would have been $3,000.00 had the money had been sensibly spent.  Some people flogging the proportionality agenda are hellbent on preserving the status quo of incompetence and waste; so much so, that it permeates all of their anecdotal "evidence" and valuations.  Others just don't have enough experience with a proper e-discovery effort to recognize that massive waste isn't something we must accept.
 
If those pushing for "reform" arrived with the knowledge and experience to do e-discovery efficiently and well, I'd credit their campaign.  But absent that competence--incapable of discerning the difference between waste and well-done--theirs is a sad, selfish spectacle that serves to delay the inevitable.  Are we not everywhere confronted with the corrosion of demanding too little of ourselves and lowering standards in everything?  Let's face the real problem, not establish incompetence as the new "good enough."  
 
And let's lay the blame where it belongs.  Lawyers' unwillingness to master electronic evidence is the gash in the side of this Titanic.  Tinkering with the Rules again is rearranging deck chairs when we should be figuring out how to fill the lifeboats.  The Rules are fine.  Their execution is not.  
 
Evidence is digital.  That's not changing.  Embrace the inevitable.  We don't need conferences to mourn the passing of paper.  We need Manhattan Projects to educate lawyers about ESI.

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Comments

Thanks for pointing out the pink elephant Craig. This needed to be said, but I doubt anything substantial will happen unless our law schools and law firms start to work in the 21st century. Maybe this is an opportunity for you to create the PhoenixOnline for eDiscovery professionals?

Craig,
Amen. If this is not THE issue, it certainly needs to be addressed before the real ones can be. We hear calls for rules changes and limitations on discovery, but also see what you are seeing--that if the process is executed efficiently, the need for external limits looks much less urgent.
Thank you for throwing down the gauntlet.

The problem is the kind of Future Shock that Alvin Toffler wrote about in the 1970s. The massive change of digital data came too quickly for the current generation to deal with, and now we have to wait for the next generation to step into place. The next generation will still be behind the curve, and have no training (since none is provided by law schools or the 'venerable elders') but at least they'll be comfortable with digital data.

But today we still have tribal elders who don't know how to manage the new problem. Heck, even if you know what you're doing electronic discovery is challenging. If you don't know then it's highly dangerous, except for one thing: very few people know what they're doing so you can blend in with the crowd.

And a herd of Wildebeasts makes its way across the Serengeti...

Most of the time the price of eDiscovery isn't a factor of the ESI waste, it is a factor of wasting away time cushions. The attorneys drive up the cost for eDiscovery by waiting until the last minute to engage vendors, which leads to paying premiums for the expedited timelines. Based on my averages I could cut my costs in half with just 37% more time. When my costs drop, my prices follow!

"If any of you could add, subtract, multiply or divide," our contracts professor Dan Fessler told us, "you wouldn't be sitting here, you'd be across campus at the B school." When I started in Big Law there was a keyboard taboo--not only did lawyers not type, but (unspoken) men don't type either. As boomers began to push out that generation, the taboo faded but no skill replaced it and the leading edge did well to type with more than two fingers. The generation about to come into its own has never known redlining by hand and many can touch type. Many more junior lawyers are moving beyond the keyboard to the realm of pure gesture.

What's still missing, however, is any inclination to apply analysis to technology, which is actually more tractable to that skill than is the law. Until that happens, the ocean will continue to boil, costs will continue to mount and dissatisfaction will remain unabated.

Pity.

I agree, but you must remember that the incompetence issue lies just as strong on the requesting parties. It is not just a responding party issue. The judges also need education, or the whole thing falls apart.

Amen. Your message should be the mast head of every commentator and the billings of every lawyer. The fault is not in the stars but in ourselves.
If the discovery system fails it is almost inevitably the fault of one or more of the players and not the rules. The rules are flexible but the players need to understand both the rules and the facts - in this case the e-data facts - to make the system function. Instead the players stumble along and blame the rules claiming if they can only tweak the rules or rewrite them, the problems will be solved.
As to proportionality, the money and time of private lawyers and government spent on the revision of discovery rules cannot be justified by the results.

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