Right-Sizing Electronic Discovery: The Case For Managed Services. A White Paper

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1 Right-Sizing Electronic Discovery: The Case For Managed Services A White Paper 1

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3 Table of Contents Introduction....4 An Overview of the Options...4 Insourcing: Bringing E-Discovery Processes In-House....4 Custom Managed Services: Partial Outsourcing in a Dedicated Environment...5 Comprehensive Managed Services: Complete Outsourcing....5 Benefits of a Managed Services Approach....6 Evaluation Criteria...7 Considerations in Selecting a Managed Service Provider

4 Right-Sizing Electronic Discovery: The Case For Managed Services In an effort to right-size e-discovery, corporations and law firms are debating the optimal way to manage electronic discovery deployment within their organizations. Traditionally, corporations trusted their numerous outside law firms to manage their e-discovery functions, who in turn outsourced some processes to e-discovery service providers. The decentralization resulting from this model had the unintended consequences of building silos around certain processes, maintaining repetitive (and sometimes overlapping) functions, technology and resources, and making standardization (and budgeting) across matters and entire litigation portfolios difficult. Today, e-discovery models are shifting as corporations re-evaluate the level of responsibility and internal investment they are willing to make, along with the level of control they want to exercise over e-discovery processes. There are a variety of feasible options organizations are now adopting, with models ranging from bringing e-discovery entirely in-house to, at the other end of the spectrum, fully outsourcing e-discovery tasks to an e-discovery service provider (while still driving strategy). Most organizations however, find the best approach lies somewhere in between bringing certain activities in-house and outsourcing others based on careful consideration of their needs, strengths and long-term goals. As organizations increasingly keep processes in-house that are part of their own competencies, and collaborate with service providers on parts of the process that make sense from a budget, operational and risk perspective, the managed services model is increasingly a viable way to manage discovery. An Overview of the Options Insourcing: Bringing E-Discovery Processes In-House One approach is to bring the infrastructure, processes and people in-house for the broad spectrum of e-discovery tasks, from preservation and legal hold to collections, data processing, early case assessment, document review and production. The technology itself may be a single, integrated tool or multiple applications licensed from a variety of vendors, but the key is deploying technology that can be leveraged along with processes, staff and expertise to manage all processes internally. Such an approach provides cost predictability of the technology, and allows the organization to effectively control the process. Some organizations also find that work may get done faster (specifically started faster), since there is no third-party layer to work through. Moreover, organizations can leverage in-house knowledge and expertise on their data and systems. For example, since upstream activities, such as preservation, legal hold and collections, are part of larger IT-driven business processes, these processes are often more suited for internal management, with oversight from outside counsel and reliance as needed on certified e-discovery consultants. Furthermore, bringing e-discovery in-house allows organizations to maintain control over the technology and own all operational processes and data handling activities behind their firewalls. This is ideal for certain types of litigation, such as cross-border matters or internal investigations, where data often must remain on site. Today, e-discovery models are shifting as corporations re-evaluate the level of responsibility and internal investment they are willing to make, along with the level of control they want to exercise over e-discovery processes. 4

5 However, there can be a significant cost and risk attached to bringing all electronic discovery in-house. Organizations must continually consider a number of different and ever-evolving tools required to manage each part of the process. In many cases, organizations are looking to platforms that integrate all functionality in a single product (i.e., collections, processing, advanced analytics, review and production) to eliminate the need to invest in, integrate and manage multiple applications to manage disparate parts of the process. However, even fully integrated platforms require dedicated IT and legal staff to operate them, and also must address the challenges of scalability and impact on the organization s IT infrastructure. Custom Managed Services: Partial Outsourcing in a Dedicated Environment Organizations seeking to avoid the capital and operational expenditures and burdens associated with maintaining and scaling infrastructure in-house but that still want to maintain control over the e-discovery application and data management processes can opt for third-party hosting of the infrastructure in a dedicated environment. Often called managed hosting, this managed services model gives organizations the flexibility to leverage their own staff to manage the application, the process and their data themselves, with the hardware and software residing within the service provider s private cloud. Beyond outsourcing the infrastructure, the organization can access on a customized basis the services it needs to fill gaps in existing technology, processes or resources. For example, processing and managing a large, multi-terabyte matter can present challenges to any organization. If an organization knows it does not have the capabilities to process large matters, it can outsource the processing and hosting for matters of or over that size to the service provider that can perform the work outside of the dedicated environment. Many organizations are uncomfortable about having their data managed and stored by an outside vendor due to security, privacy and business continuity concerns. This model has the benefit of allowing attorneys and their IT staff to maintain stringent security obligations by partnering with a service provider that has extensive data center security certifications and protocols. Comprehensive Managed Services: Complete Outsourcing In a comprehensive managed services model, organizations outsource a substantial part of the e-discovery process. The data management infrastructure, like the custom managed services model, is typically managed through a service provider s private cloud in a secure environment. The services include comprehensive supporting e-discovery data management activities, such as data filtering, processing, analytics, review management, production and project management services and even proactive compliance measures and data analysis. The work is performed by the service provider utilizing their resources, but it is done in an environment directed by the organization. One of the greatest benefits of a comprehensive managed services model is greater cost predictability and the control it affords to the organization. Services are often rendered using innovative pricing arrangements as part of a multi-year, single provider relationship. Retainer-based arrangements, buoyed by service level agreements (SLAs) for performance, help smooth the unpredictable spikes in spend created by the transactional nature of legal work and can ensure quality work. Moreover, service providers have an expertise and resources that are often beyond the scope of a typical organization. These relationships create a partnership and the service partner gains essential knowledge of corporate business activities and infrastructure. In turn, the service provider can better apply this expertise to fill the gaps in an organization s resources and expertise, especially on topics such as data acquisition and collections strategy (under the direction of outside counsel), strategic search, technology assisted review (TAR) consulting, analytical services to maximize information from the data set, and managed review. One of the greatest benefits of a comprehensive managed services model is greater cost predictability and the control it affords to the organization. 5

6 An added benefit of comprehensive managed services is the facilitation of more standardized data management activities and processes across all matters, creating more efficient, transparent and defensible processes. This approach can also be flexible and customized to fit an organization s needs. Some organizations especially ones with large recurring litigation portfolios may decide to bring hosting in-house to realize economies of scale while utilizing their partner for data processing and other services. Others may only bring technology (and resources) in-house for processing and hosting of small, day-to-day matters (such as internal investigations or proactive upstream activities such as early case assessment and compliance), and then completely outsource all processing and hosting for burst capacity needs and matters that exceed a certain volume. Managed review is another area that can be filled by a service provider, which can help drive standardization and cost control across an organization s litigation portfolio, as well as ensure the transfer of knowledge from project to project regardless of which outside counsel may be engaged in any particular project. Benefits of a Managed Services Approach Leveraging managed services whether choosing to outsource the infrastructure and customize supporting services based on the needs of the organization, or taking a comprehensive managed services approach provides a number of distinct benefits. In addition to allowing the organization to drive the strategy but outsource some (or all) operational tasks, benefits include the following: Greater budget predictability and cost management. Managed service providers can drive innovative fee arrangements that provide transparency within the organization, budget predictability and better cost management across matters. Organizations can also negotiate favorable and innovative agreement terms as part of long-term single vendor contracts. Efficiency and defensibility. A managed service provider fills gaps in technical and process resources quickly, while replicating and standardizing processes across an organization s litigation portfolio, which improves efficiencies and defensibility. Scalability. Managed service providers deliver technology services as a core competency, and can scale up as necessary, allowing clients to rely on the service provider s technology infrastructure without building and maintaining their own infrastructure. This frees the organization from fixed investments in hardware and software. Furthermore, service providers can staff up and down on-demand for their clients to handle peaks and valleys in caseload. Security. Since security is part of the core service, managed service providers bring a depth of knowledge and focus on security issues and constantly emerging threats managing security at the physical, application and end user levels. This is an especially important consideration for those who deal with client confidentiality, IP and other proprietary information. Access to advanced technology. More often than not, rapid IT-enabled innovation in e-discovery is not a core strength of an organization. Managed service providers typically have access to technology (if not their own proprietary technology), that they can upgrade, enhance and roll out to organizations seamlessly via the cloud at no cost such as TAR, visualization tools and other advanced analytics that help organizations reduce cost and time spent on discovery. Flexibility. Managed services also offer the organization flexibility and the ability to adapt to its needs, providing services and experts to fill gaps in infrastructure, resources and expertise, on an on-going or as-needed basis. A managed service provider fills gaps in technical and process resources quickly, while replicating and standardizing processes across an organization s litigation portfolio, which improves efficiencies and defensibility. 6

7 Evaluation Criteria In addition to understanding an organization s core competencies, additional factors come into play in determining the right balance of insourcing and outsourcing. All organizations should weigh the following factors: The organization s litigation profile i.e., the number and level of complexity of cases typically being handled at any given time, as well expectations about future litigation The organization s willingness and interest to invest in e-discovery hardware, software and staff (along with the appetite to continually reinvest as newer, more advanced tools are brought to market) Overall IT architecture strategy, including attitudes toward data center consolidation, cloud computing and outsourcing Current resources, including departmental structure, depth and breadth of expertise Geographic issues, such as firewall concerns, the number of locations the company has, technology capabilities and IT team experience Specific security concerns and capabilities Cultural fit and how well each approach meshes with the organization s structure and hierarchy In-house counsel have an additional set of considerations: What kind of cost predictability and cost management each approach achieves The level of control the company desires How much risk the company is willing to shoulder Pricing considerations and which model best aligns with the company s needs Which weaknesses and gaps exist in technology and/or resources, and how particular approaches will most effectively address those Law firms specifically should consider: Whether an e-discovery offering beyond e-discovery law is or should be a dedicated profit center, simply part of the client offering or as an oversight role How the different approaches will impact profits per partner How the model will provide the cost predictability and savings that their corporate clients are increasingly demanding How much risk the law firm is willing to assume Which model will enhance or harm the firm s competitiveness compared to other law firms and e-discovery service providers 7

8 Considerations in Selecting a Managed Service Provider Once an organization has determined which processes to keep in-house and which to outsource, the next step involves evaluating and narrowing the pool of potential managed service providers. Legal teams should consider: 1. Track record: The service provider should have solid experience and expertise across a wide range of e-discovery processes, along with deep bench strength. 2. Flexible technology deployment options: Technology that can be accessed via a cloudbased hosted model or installed on premises offers more flexibility to the organization than a one-size-fits-all approach. For example, some organizations may wish to install the technology in-house to manage day-to-day matters or upstream processes, and migrate larger matters to the provider s cloud for processing and hosting. 3. Flexible pricing: Fee structures should provide transparency, control, predictability and visibility throughout the process while meeting the organization s needs i.e., based on hourly, volume, subscription, tiered discount, fixed fee, alternative fee, retainer and other models. For software license fees, a software license model that offers concurrent and unlimited usage allows an organization to scale users, data volume and the number of matters without investing in additional licenses. 4. Flexible staffing: Staffing options should allow organizations to fill gaps remotely, on site or a combination of both on an on-demand basis to maximize efficiencies in resources and costs. 5. Proprietary technology: Software that is developed by the managed service provider often means deeper product expertise and more agile responsiveness to client needs with respect to the technology. 6. Security protocols and certifications: Areas to look for include ISO certification, security tiers at the physical location, application and user levels, primary and backup data centers, 24/7 active monitoring, three-tier data redundancy, extensive disaster recovery and business continuity planning. 7. The ability to handle private, sensitive and/or confidential information: This includes both data handling processes and procedures and functionality in the application itself to identify and automatically protect sensitive data. 8. Technical and process management: The managed service provider should have reliable and repeatable methods for managing the entire e-discovery lifecycle. 9. Scalability: The provider should have capacity to process and host large amounts of data on-demand. 10. Global presence: The provider should be able to handle projects of any scale, language and international complexity, with data centers that offer localized support. Managed service providers should also have well-defined plans for the deployment, in whatever form it takes. That plan should include, at a minimum: detailed information on the project rollout and management; a staffing plan; training programs; user provisioning; and, proven workflows that are documented. This level of detail should also extend to the hardware and software capacity and contract termination. For most organizations, outsourcing of some processes as part of a managed services model increasingly makes sense. However, organizations must conduct research, understand their own needs and carefully vet potential service providers to maximize resources and results. By doing so, they can maintain flexibility, control and cost predictability while focusing on their core businesses. For most organizations, outsourcing of some processes as part of a managed services model increasingly makes sense. For more information on Xerox Litigation Services, visit call or Xerox Corporation. All rights reserved. Xerox and Xerox and Design are trademarks of Xerox Corporation in the United States and/or other countries. 08/15 LATJE-105 BR15933

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