e-Discovery Team Training

Welcome to Module 2-I.

e-Discovery at the Harvard Club in New York City

The stately 19th Century Harvard Club hosted a cutting edge 21st Century conference on e-Discovery. I had the pleasure to speak at this event that was organized by ALM, who also puts on the Legal Tech trade shows. I was curious to see this private club and happy to speak at this event for N.Y. paralegals and attorneys. I was not disappointed by the wood-paneled Harvard atmosphere, nor the content of the CLE. This module reports on the highlights for me from this event, featuring David Shonka of the FTC, Sherry Harris, Tom O’Connor, Monica Bay and others.

David Shonka of the FTC

Before the event, I got a chance to speak with the then head of the Federal Trade Commission’s e-Discovery Team, David Shonka, who later became the General Counsel for the FTC. David, like me, didn’t go to Harvard and was delighted to see the inside of the Harvard Club for the first time. We started talking about the Qualcomm case against Broadcom and both agreed it was The Big Case of the year. He endured my rant about attorneys who do not play by the rules, the ones who deliberately hide evidence they know should be produced. We also agreed that this kind of unethical conduct was nothing new, nor unique to e-discovery. It has always gone on, but in the olden days of paper discovery, it was far harder to expose. Today, with electronic discovery, hide the ball is suddenly a high risk undertaking. David picked up on my somewhat angry tone (over the years I have suspected several opposing counsel of playing this game, but have never been able to prove it). He said that in view of my strong opinions on this topic, I would probably like his presentation.

He was right. The then FTC e-Discovery Team leader began with an overview of the incredible facts of the Qualcomm case. This was a prelude for this primary message, that there are only three fundamental principles to follow in e-discovery. They are, in his words:

Don’t Lie.

Don’t Hide Things.

Don’t Make Promises You Can’t Keep.

David pointed out that a law firm’s reputation for truth and honesty are key. If David thinks he is dealing with a lawyer that does not follow these fundamental precepts, then the FTC will naturally be much more demanding in their requests for information, and harsh in their treatment. Conversely, David is willing to negotiate and exercise leniency when an attorney is honest and forthcoming, and reveals the bad with the good. This attitude, in my experience, is also followed by most judges.

On the point of “don’t hide things,” he stated that anytime you have to have meetings, to try to “figure out an argument why something is not responsive, it is responsive.” You should produce it, you should not try to hide it. If not, in David’s words, you risk the principle that: “You are known by your last lie.” And that reputation will last for a long time.

The FTC e-discovery chair stated that, in his view, parties have three general options for responding to discovery:

1. Hardball – prolongs investigation and is costly.

2. Let’s-see-if-they-can-find-it – again, prolongs investigation and is costly.

3. Co-operation – fastest, surest results and is the least costly.

David said the third path of “negotiation” is only the way to go for all e-discovery situations, but especially if you are responding to the FTC. No doubt the Harvard class of 1925 shown below would agree. (Note the sign they are holding on the right is not about one of my ancestors, instead it says “The Mess is Still Fundamentally LOUSY”, which is, I think, a reference to the food.)

Aside from general principles, David also had some practical advice on e-discovery, and how to find the relevant information, and not waste your time on non-responsive ESI. Here is his chart of the process he recommends:

Process of Narrowing ESI:

1. Preliminarily Identify Issues and Sources of Information:

a. Key players (12-36 max in any case)

b. Occasional players (only search if you have to)

c. Fringe players (rarely ever search)

2. Data

a. Enterprise systems

b. Local systems (particular office or groups)

c. Individual systems

d. Archives

e. Back-ups (and Legacy Data)

Most of the time all of the relevant data needed for a case will be stored on the key players’ Enterprise, Local and Individual systems. Sometimes you may also need to look at Archives too, depending on what you find in the more easily accessible stores, and how difficult it is to get at the ESI on Archives. Back-up tapes and Legacy Data are not usually needed. David explained that the FTC typically only requires two daily backup tapes be preserved, just in case they want to look at them later, which they usually don’t. He noted with a chuckle that the FTC picks which two tapes to preserve, not the respondent, and they usually just pick two at random.

On the issue of Litigation Holds, the FTC Team leader recommended that a senior, experienced attorney personally supervise the preservation process and deal with all of the key players directly. This is at odds with the practice of many companies and firms that tend to delegate this task to younger, less experienced attorneys or paralegals. It is probably not a good idea to do that when dealing with the FTC. If a second year associate messes up, you are not likely to have much sympathy. If an older guy like me screws up (yes, it happens), maybe they will cut you some slack.

On a promising note for large companies, he said that parties and the courts should always remember that companies are not in the business of preserving and holding evidence to produce to adversaries who may someday sue them. If e-discovery becomes so burdensome that it impairs businesses’ operations, then something is fundamentally wrong.

David’s presentation also included the fundamental message of my writings, that building an interdisciplinary Team is key to e-discovery compliance. He recommended, as do I, that the Team include IT, in-house and outside counsel, and vendors. He also advised that you “get everybody in the same room.” Otherwise, you will inevitably play the old child’s game of telephone, where a simple message is whispered for one person to the next, and by the time it reaches the last person, it is totally screwed up. He said it may seem expensive to some companies to assemble such a multidisciplinary Team, and have them meet regularly and in-person, but he is convinced you save money in the long run.

Apparently the FTC has been using such a Team approach to e-discovery for several years now and they are pleased with the results. He told me before the CLE started that they now have two attorneys who only do e-discovery, and they have help from a number of techs and paralegals. Of course, the FTC cannot force companies under investigation to also use a Team approach, and specialized attorneys, but David did say publicly that they will sometimes refuse to meet with a company’s lawyers unless they bring the IT liaison with them to the meeting.

David also spoke of the serious risk of just relying on custodians for self-collection. They may print out, or transfer to a disk, but they are likely to do it in a way that messes up the metadata. He stated that metadata is only rarely needed for production, and depends on the case, but you should still try and preserve it as best you can. Still, the main reason you should not rely on custodians alone for collection is that they are “self-interested.” They may, for instance, want to avoid embarrassment and not produce certain very relevant emails that they wished they had not written. In his opinion, you can do the collection in-house, and do not have to hire an outside vendor, but you should use a qualified technician to go to the computers and collect the data, and not just rely on the custodians. As to forensic imaging, where outside experts are typically used, that is only rarely needed in special cases where there are indications of criminal conduct.

Sherry Harris

Sherry provided the opening keynote address. She had, at the time, over 30 years experience with Hunton & Williams and was then the dynamo behind their e-discovery efforts. Although not an attorney, she knows far more about the subject than most experts. She commented on my sports analogy essay on e-discovery, What Game Does An e-Discovery Team Play, and said how important it was for paralegals to help make sure the attorneys they support never drop the ball. Like most everyone else, she also talked about Qualcomm, and the outside counsel who now stand to be sanctioned. She emphasized that this is something you never want to have happen to your law firm. One way to avoid this is for lawyers and paralegals alike to, in her words, “stay aware of evolving case law.” She also said that in her experience, “traditional discovery is gone forever; but right now people are resisting the changes.” Her advice: “Make technology your friend.”

Vendor Selection and Negotiation

Next, Jennifer Tomaino, attorney member of the Verizon e-Discovery Team, and Oliver Gierke, Litigation Case Manager for White & Case, presented on Vendor Selection and Negotiation. It would be hard to imagine two people better qualified to speak on that topic. Jennifer is Patrick Oot’s “right hand man” (so to speak) for Verizon, and so has a good perspective on corporate e-discovery Teams and their procurement of vendor services. Oliver is a key technical member of the White & Case e-Discovery Team, a law firm with 2,300 lawyers in 37 offices located in 25 countries.

Jennifer and Oliver both noted that paralegals play a key role in vendor selection because they work closely with vendors to get the work done, and are in the best position to evaluate performance. They also both commented on how big the e-discovery industry has become, now approaching three billion dollars a year

Jennifer Tomaino stated that Verizon does its own preservation and collection, and vendors do not usually get involved until the processing stage. Verizon is looking to take even more of the e-discovery process in-house in the next few years, and may move into review. In her experience, the review tools that the vendors offer are all fairly similar. She cautioned that “technology can help, but is only as good as the people using it.”

Jennifer suggested that you look for recommendations from others who have recently used a vendor. Also, you may want to employ a formal two-step procedure where you issue an RFI – request for info, and then an RFP – request for product proposal. She suggested you study the Sedona’s sample RFP in their vendor selection paper, but do not simply use the form without thought and customization. Jennifer also noted, and Oliver agreed, that a Vendors’ project managers are key. They need to provide quality, accessibility and responsiveness (24/7). Since Verizon is, in Jennifer’s words, a serial litigant, they can get the best rates because of the volume. Still, try and be creative in making deals with vendors, who usually charge by the amount of ESI, and/or time. For instance, she suggested trying to get a deal where you only pay for hits, not misses.

Oliver Gierke has found that vendors can offer both expertise and cost control. Their expertise includes: 1) data forensics, which he has never seen done in-house because you may need an independent expert to testify on authenticity and chain of custody; 2) collection; 3) processing; 4) hosting data for review because most companies and firms do not have the capacity to store large amounts of ESI; 5) production; and 6) consulting. Vendors can provide cost control by: 1) exclusive or long term contracts at discounted rates; 2) retention of data only when needed; and 3) hiring contract lawyers for review. He thinks that a good vendor can save you a lot of money, although the expenses are front-loaded at the beginning of the case. Oliver also noted a few pitfalls of reliance on outside vendors. Their services are expensive, there is less control than doing things in-house, and more room for miscommunications.

Oliver recommends that you meet with vendors in person and know in advance who will be assigned to the project. You should make sure that the vendors can clearly explain what they will do in a way you can understand and explain to others. Beware of those who speak only in jargon. Also, and many who spoke at the CLE later emphasized this point, be sure to find out if the vendor is going to use subcontractors and check them out as well. Look out for vendors who get the contract and then sub everything out to third parties. Finally, Oliver recommends that you renegotiate pricing with a vendor every 6-12 months. The industry is rapidly changing and prices are going down.

Tom O’Connor

Next up was Tom O’Connor, who spoke on Cost Containment Strategies. Tom is an independent consultant from New Orleans, and the Director of the Legal Electronic Document Institute, a non-profit he organized. Tom has since moved on to work for a vendor and is a really great guy whose opinion I value. He noted that the technology consulting company, Gartner, estimates that 20% of the e-discovery companies existing today will be out of business in a year. He suspects many of the rest will be lost through consolidation, with a few big companies buying all of the rest.

Tom opined that process management is key to cost containment. You need to set up best practices that are repeatable, yet still flexible. Tom also pointed out the inherent tension between in-house counsel trying to preserve costs, and outside counsel who must answer to the judge, and have an ethical duty to the client and the court. Again he talked about Qualcomm, but pointed out that this is nothing new; there are many cases driven by this conflict.

The part of Tom’s presentation I liked the most was his discussion of the paradigm shift now in progress in e-discovery, as a mirror of the world. The Old Paradigm was based on single page TIFF with bates numbers, and review as single pages. It thought of documents in terms of paper pages. The New Paradigm is native file based, where you produce, process and review in native format. Our idea of a “document” should completely change. It is all bits and bytes now. Stop treating it like paper where you Bates stamp each page. Under what Tom calls the new Docucentric paradigm, you set up a unified enterprise wide relational database with data extraction as needed. Under the new system you automatically extract metadata fields, and do deduplicating, near deduplicating and other processing. He thinks that good content management systems are key to making this happen. The new native ESI paradigm is faster, more efficient and far less expensive than old paper concept systems.

I agree with Tom wholeheartedly on these new native paradigm insights. Tom said that many object to going native because they think you need TIFF and bates numbers in order to preserve authenticity and stay organized. Tom disagrees and thinks that the Bates stamp has been replaced conceptually by hash, and cited to my law review article, HASH: The New Bates Stamp. He thought I was going to speak about that later (I wasn’t). The bottom line for Tom is that there is a huge cost reduction possible by eliminating TIFF and working in native. Tom claims it is in the range of 30-40%, but notes that some vendors claim the savings is more like 80-90%.

Afternoon Program

Next came lunch, followed by my presentation: e-Discovery Teams: the New Gold Standard. I explained why corporations and law firms are moving to the multidisciplinary Team approach, and corporations’ especially are taking it in-house. I covered the benefits of the Team approach, and why so many companies are having trouble doing it. Everyone seems to agree it is the Holy Grail of e-discovery, but just like the mythical chalice, it is nearly impossible to find. I had a good time because the attendees were very attentive and laughed at the right times.

After me came several good presentations, but they will be shortchanged in this essay simply because I was too tired after my work to focus and take notes of what they said. Scott M. Cohen, Director of Practice Support for Proskauer Rose presented with Dottie Perillo, a paralegal from Dupont’s e-Discovery Team. They spoke on a subject close to mine, Achieving a State of Litigation Readiness – Bringing About Effective Dialogue Between Inside and Outside Counsel and the IT Department. I do recall meeting Scott the night before and trading old computer stories. I do not run into that many people who remember my first computer, the TI-99/4A, nor appreciate how amazing it was to be able to program both speech and animation on it back in 1981. Scott is also one of the few people I have met who actually used the whistle in the Captain Crunch cereal boxes as part of his telephony research when he was a kid in high-school.

Next came the unforgettable Monica Bay, Editor-in-Chief of Law Technology News. Her topic was How EDD is Changing the Job Market. I remember her strong presence and unbridled enthusiasm, but not enough of the content about the job market to try to summarize it. I think she said it was in fast transition, and right now, no one is too sure where it is going. The only thing clear is that paralegals with good computer e-discovery skills are in very strong demand, and this demand is certain to increase. I also recall her scolding many blue chip law firms for not being inclusive enough of paralegals and IT. She also talked about Darwin and survival of the most agile, and that if the old line big firms did not change fast, and form bona fide interdisciplinary Teams, that they will go the way of the dinosaur. They will not be able to compete, and their long term clients will leave them for more agile specialists, ones not hung up on attorney old-boy networks. No, she does not mince words.

Kenton Hutcherson, a sole practitioner from Dallas, whom I had met before at Sedona, presented on using metadata to uncover hide the ball tactics by the other side. He told a story about a case he had just out of law school, a few years ago. He took a case all of the partners said was a loser, and achieved a favorable settlement by analyzing the metadata in load files the defendant produced. He discovered what appeared to be intentional duplication of irrelevant files, coupled with attempts to bury the hot files. Kent then used a killer ESI spoliation motion to force a high settlement.

Kent says that he later heard both outside and in-house counsel were fired because of that case. One presumes it was because their fraud was exposed, but maybe it was just because they lost, not on the merits, but because of e-discovery blunders. In any event, I felt sorry for Kent because his PowerPoint did not work properly, probably because of the Microsoft version issues, and the fact that the laptop furnished by ALM was accidentally loaded with a trial version of Vista. Personally, I now always bring my own MacAir, but even then you can still face difficulties because it sometimes won’t work with old projectors. The e-discovery presentation world is much like e-discovery itself, if something can go wrong, it usually does, and so it always pays to have a back-up plan (or two).

SUPPLEMENTAL READING: Review the linked pages and also find out more about David Shonka, his later position at the FCC, and his opinions and advice on e-discovery and electronic communications and records in general. Write a summary to yourself of at least one e-discovery pointer your research on Mr. Shonka uncovers that is not included in this module.

NON-MANDATORY SUPPLEMENTAL READING AND EXERCISE. Find specifications published by a division of the U.S. Department of Justice that govern the production of ESI to that division. Read them and write a memo summarizing what you found to be the most confusing parts and what seemed pretty clear cut.

EXERCISE. Figure out what branch of government issues “Second Request” and why are they often a big challenge for e-discovery teams? What do you think are the biggest concerns of the lawyers for the producing parties responding to the second requests?

Discretionary Bonus Exercise: What was the first major city in the U.S. to switch to Gmail? (Hint – it was not located on the West Coast like you may think.) One more, in what case did a Facebook defense exonerate a robbery suspect?

Students are invited to leave a public comment below. Insights that might help other students are especially welcome. Let’s collaborate!

Copyright Ralph Losey 2015