1 AT TO R N E Y S Frequently Asked Questions About Lewis Brisbois s ediscovery Practice LewisBr isbois.c o m
2 1. WHAT APPROACHES HAS THE FIRM DEVELOPED TO REIN IN THE GROWING COST OF ediscovery? Many of our clients have well established information or documents management systems. In those cases, we work with the client s team to ensure appropriate custodians are identified and corresponding ESI and paper records are preserved either in place or through an appropriate collection. Some document storage infrastructures allow for an early assessment of the content. If available, we seek to use these resources to reduce the cost of early case assessment. At all stages of the preservation, collection, processing and review continuum, Lewis Brisbois works with our clients to keep the volume of data as small as possible. We appreciate the impact the explosion of data volume has had on litigation costs. We have spent several years developing Lewis Brisbois s Cost Effective ediscovery Solutions ( CEeDS ). CEeDS s origins lie in a white paper Lewis Brisbois co-wrote with ACT Litigation Solutions, Inc. in 2010 entitled, SOLUTIONS TO EXPLODING DISCOVERY COSTS THAT IMPERIL LITIGATION AFFORDABILITY AND COURT ACCESS. [Link to White Paper] This combines exposure based budgeting with low cost processing and review techniques that minimize the amount of human review through use of analytics and statistical sampling. We also digitize hard copy so it can be reviewed using the same cost savings techniques applied to electronically stored information ( ESI ). Because social media often contains information comparable to what can be obtained through sub rosa investigations at a fraction of the cost, we use programs like X1 Social Media Discovery to capture public facing information about litigants and witnesses. The chart below compares the low cost processing component of CEeDS to market prices offered by vendors in a hypothetical case involving 40 Gigabytes ( GBs ) of ESI and 225,.000 pages of paper. Lewis Brisbois clients using CEeDS save $30, or 68 percent compared to clients paying market rates.
3 LEWIS BRISBOIS CEeDS CLIENT SAVINGS SERVICE NUMBER OF UNITS PRICE PROJECT PRICE PRICE PROJECT PRICE $ SAVED Processing - Native Metadata/Text Native file hyperlink per Gigabyte Pre-Culling - Keyword Filtering/ Date Restriction pre-processing per Gigabyte TIFF CONVERSION: Selective TIFF to PDF/ Sequential per Page Foreign Language Processing per Gigabyte Embedding per Line per Page Near De-Duping & Threading per Gigabyte Coding - Full Bibliographic Coding with Unitization per Document (12 Fields) OCR Conversion per Page Project Management per Hour 40 $ $6, $ $13, $7, $0.00 $0.00 $80.00 $3, $3, ,000 $0.01 $2, $0.03 $6, $4, $0.00 $0.00 $75.00 $ $ ,000 $0.01 $2, $0.01 $2, $ $0.00 $0.00 $ $10, $10, ,500 $0.25 $1, $0.95 $4, $3, ,500 $0.01 $ $0.03 $1, $ $ $2, $ $2, $ TOTAL COST $14, $44, $30,475.00
4 When data sets are very large, we often recommend employing analytic software programs to rank the data. We work with statisticians to sample the data to determine which portions warrant a human review. In a relevance review, cost benefit analyzes may suggest reviewing every document in the very rich and very lean data populations is unnecessary. After privileged and sensitive data is removed from the lean data, we will inform the adversaries they are welcome to review the lean data set at their clients expense and on their time. We achieve de facto cost shifting, if the adversaries want the data examined. To date no one has taken us up on our offer. When they see the results of our sampling and understand the results are defensible, they realize the cost benefit analysis inherent in proportionality favors putting the lean data aside and focusing on information in the richer strata. This approach can reduce the cost of review by 75 percent or more below that of an outsourced document review using contract attorneys. The repeatable processes and established workflow resulting in these costs savings have been incorporated into our Lewis Brisbois s CEeDS. An example of savings achieved applying the CEeDS approach to a case involving a couple hundred gigabytes of ESI is set forth below. In a case involving ERISA and fraud claims against a startup telemedicine provider with a $3 million Directors and Officers declining limits policy, plaintiffs claimed more than $10 million compensatory plus punitive damages and rejected a policy limits offer at the outset. Mergers & acquisition counsel procuring debt financing for the insured advised them an initial review of its ESI for relevance and privilege would cost more than the $3 million policy limit. M&A counsel assumed a linear review using $50 per hour outsourced attorneys for the first tier analysis in line with estimates provided by Grenig, Marean & Poteet in their Treatise ELECTRONIC DISCOVERY AND RECORDS MANAGEMENT GUIDE.
5 Law & Motion (Rules 12(b)(6); 16; 26; 37; and 56) Depositions (Prep, Travel, Attendance, Transcripts) LEWIS BRISBOIS COST EFFECTIVE EDISCOVERY $70,000 $70,000 $150,000 $150,000 Interrogatory Responses $60,000 $60,000 Mediation (Prep, including 200 page PowerPoint excerpting documents and testimony and 2 Day Hearing and mediator fees) $70,000 $70,000 ediscovery (Legal) $350,000 $6,693,500 ediscovery (Consultant) $200,000 $120,000 Collection and Forensic Services $30,000 $30,000 Document Production (Native Files, TIFFs, Hard Drives, Etc.) $75,000 $75,000 Experts $80,000 $80,000 Miscellaneous Expenses $90,000 $90,000 Defense of Broker s Indemnity Action Indemnity for ERISA and Broker s Actions $30,000 $30,000 $1,300,000 $1,300,000 TOTAL $2,505,000 $8,768,500 CONVENTIONAL EDISCOVERY LINEAR REVIEW The chart shows by using analytics and statistical sampling we reduced the ediscovery legal spend by almost 90 percent compared to linear review using outsourced attorneys for first tier review and the insurer was able to take down over $400,000 from reserves at the end of the case. The $80,000 increase in costs associated with the ediscovery consultant relates to the additional costs of analytic software, but that is small compared to the savings in review time. We have replicated this type of savings in other cases. Lewis Brisbois s CEeDS provided a win for everyone. The insured stayed in business. The insurer avoided a threatened bad faith suit and spent less than its limits on what was regarded by the insured and M&A counsel as an excess of limits case. Lewis Brisbois s fees were fully covered by the policy. Although review is unquestionably the most expensive component of the ediscovery process, we are sensitive to the high cost of processing data. We conduct reviews in native formats and convert to TIFF or PDF formats only data which will be produced. Also, we aggressively seek volume discounts from the vendors with whom we work. We are negotiating to securing processing at a rate significantly below the current market price to help our clients reduce the total ediscovery expense.
6 2. HOW DOES PROPORTIONAL BUDGETING WORK? Proportional budgeting puts the focus of litigation cost back where it belongs. Too often budgeting for ediscovery projects begins by asking, How many gigabytes of data does the client have? If gigabytes were the right metric to establish a budget, the better question would be How many gigabytes of data do the client, adverse parties and relevant third parties have between them? But, both questions miss the point. Budgeting should be driven by what is at stake in the case rather than the volume of data that can be collected. The focus of proportional budgeting is on the amount in controversy or the available funds for litigation, whichever is less. The available funds is a constraint when the client does not have protection afforded by insurance or an indemnity agreement or when the available insurance has limits which are eroded by defense costs, as is typical in Errors and Omissions and Directors and Officers coverages. When the costs of litigation are covered, the focus must be on the amount in controversy. It makes little sense to spend millions of dollars mastering a terabyte of information if the amount in controversy is only $500,000. The first task is to determine what the dispute is worth. Then, a decision has to be made about what percentage of the amount in dispute should be allocated to litigating. Hypothetically, one might chose 40 percent as an upper bound to cover all expenses through trial. Then the tasks required must be broken out as a percentage of the sum available for litigation. If 70 percent of the litigation budget is allocated to discovery, including depositions, written discovery, documents and motions about discovery, the largest part of that will relate to documents. If 70 percent of the discovery budget is allocated to documents, that must be spread over identification, preservation, collection, processing, reviewing and production of ESI. Some portion has to be allocated to paper documents, although as discussed below, it is probably wiser to image the paper documents and treat them as much like ESI as possible to minimize the expense associated with handling them. By using analytics, the usual ratio between all other activities and review of between 1 to 8 or 9 can be reduced. That allows for making a deeper dive into the potentially relevant data. At this point roughly 50 percent of the litigation budget is allocated to documents. 3. WHAT HAS LEWIS BRISBOIS DONE TO REIN IN THE COSTS OF PROCESSING ESI? There are a number of approaches to reigning in the cost of processing ESI. Like all other costs associated with ediscovery, the first rule to containing costs associated with processing is to reduce the amount of ESI which must be processed. This can be done by defensible, targeted collections rather than simply imaging custodians data. It can also be achieved by using early case assessment tools to select potentially relevant data from the custodians media. Once the data footprint has been shrunk as much as possible, the issue of reducing costs shifts to minimizing the cost of the processing. We keep a finger on the pulse of market costs for services provided by vendors and consultants as to each of the components of the EDRM model by regularly soliciting this information and communicating with dozens of vendors and consultants about their offerings. Then we work with selected vendors and consultants to cut the costs associated with collection, processing, review, hosting and production to a level significantly below the prevailing market prices. The first chart in FAQ No. 1A shows a comparison of what Lewis Brisbois s CEeDS pricing looks like compared to prevailing market prices.
7 Thought leaders on ediscovery topics have suggested that ediscovery will become unaffordable unless the cost of processing and related activities can be cut in half. As illustrated in FAQ No. 1, Lewis Brisbois has worked with select vendors and consultants to reduce those costs by more than 50 percent. At least some vendors and consultants are willing to reduce their pricing in exchange for a volume of business and stream lined workflows that reduce the overhead associated with taking on assignments without established workflows. 4. WHAT HAS LEWIS BRISBOIS DONE TO MAKE THE REVIEW OF PAPER DOCUMENTS MORE COST EFFECTIVE? Creating paper copies of physical documents is expensive compared to the cost of creating digital images of those documents. Typically, it costs about ten cents a page to copy physical media. The cost to create searchable digital images of the same paper documents is about two cents or less. So, the cost of getting copies of paper to review can be reduced by 80 percent or more if the right format for copies is selected. Paper data sets, like ESI, contain a large percentage of duplicates. The cost of reviewing paper documents can be reduced dramatically if the volume of material reviewed can be shrunk. One way to accomplish this is to eliminate duplicates. When ESI is involved this process is easy. The company providing processing services can be instructed to deduplicate the documents globally. Typically this is accomplished using the hash values assigned to documents. Unfortunately, paper documents do not have hash values. Fortunately, there are alternative software programs which can accomplish much the same purpose. Once the documents are imaged, a process which saves a great deal compared to having photocopies created, near duplicate technologies can be applied. This process makes allowance for the fact the digital images will contain errors and the lower the quality of the original media, the higher the number of errors on each page. The near duplicate technologies allow the reviewer to suppress what are likely to be copies of documents and limit the time the reviewer spends to that which is necessary to examine unique data. When the quality of the collected media is low, imaging and near duplicate technologies may cease to be effective ways to identify unique data. At this point bibliographically coding the images may provide a significant cost savings. The coding fields, which include information about author, recipient, date, etc., are analogous to metadata used to sort ESI. These fields are associated with individual documents the same way metadata is associated with individual electronic documents. The fields can be used to learn about who is communicating with whom and about what much the way the NSA uses metadata to learn about potential terrorist threats. All of this allows us to make informed judgments about the data and its contents at a small fraction of the cost associated with looking at all the pages in the original media collection. 5. WHAT HAS LEWIS BRISBOIS DONE TO REIN IN THE COST OF REVIEWING PAPER DOCUMENTS? After taking steps to reduce the volume of data to the greatest extent possible by voluntary agreement with other parties or, in the absence of accord, by seeking a case management order ( CMO ) limiting the scope of information and number of custodians and globally deduplicating the review set, we utilize analytic software to the greatest extent possible to minimize the number of documents actually reviewed. Additionally, by agreement or CMO we seek to have dealt with as families. If any document in an chain is relevant, the entire
8 family is produced. If any document is privileged, the entire family is withheld. This complies with what courts have recognized as the better practice and reduces the number of documents to be reviewed. As part of the basic processing, we search for domain names and keywords associated with spam and other nonbusiness related s. Even when spam filters were operational on the custodians devices, we commonly fine ten to twenty percent of the information collected is spam. Additionally, we eliminate domains associated with electronic news, sports and trade publications Typically, we thread so only the most complete chains are examined. When the chains are long or have multiple attachments, the time savings resulting from not having to examine each of the iterations generated are significant. We also cluster similar documents so bulk coding decisions can be made. When larger data sets are involved, we use predictive coding to rank the data and stratify it. We take samples from the strata. Where the data is rich, i.e., more than 80 percent of the data is relevant, we produce the entire strata. If the data is lean, and typically large portions of the ranked data are lean, we conduct no review. We inform the other parties of our findings and offer to provide the sampling to show the data is lean. The other parties can elect to review the lean data, which will be produced in the manner in which it is ordinarily maintained. Using this approach it is possible to avoid looking at more than small samples of the mostly irrelevant data. If the other parties wish to review the lean data, they can do so at their cost. This effectively implements cost shifting without the need to incur law and motion costs. 6. HOW DOES LEWIS BRISBOIS PLUMB THE INFORMATION ABOUT PARTIES AND WITNESSES CONTAINED IN SOCIAL MEDIA AND ON THE INTERNET? Courts are increasingly recognizing that the internet and social media sites are data sources counsel must examine in order to represent clients properly. In at least some contexts, counsel s failure to Google is treated as ineffective assistance of counsel or a breach of the standard of care. In addition to conducting internet searches, Lewis Brisbois employs X1 Social Media Discovery tools to collect public facing information from major social media sites. Our recommended practice includes examining not only the social media sites associated with adverse parties and witnesses, but also our own clients and witnesses. If there are skeletons in the closet, it is better to know about them in advance of having them sprung by opposing counsel. For example, in a dram shop act case, what appeared to be a defensible case became very problematic when one of the bartenders had posted on his Facebook account a notation describing his profession as making drunks happy. Uncovering this baggage early and settling a case before opposing counsel have mined the ore in social media accounts can save clients significant sums. Social media content can be used even more effectively than surveillance videos to undermine exaggerated claims. The chart shows is a variety of bodily injury claims where the severity of claimed injury resulted in reserves being set ranging from $65,000 to $2.5 million. The average case was open for over two years. The average time to hit pay dirt using the X1 tool was 4.3 hours. The average reserve was $825,400. Assuming $300 per hour for the search, the cost to get the evidence needed to dispose of these cases was $1,290. Lewis Brisbois reduces the cost further by relying on experienced paralegals rather than forensic consultants to perform these searches. This reduces by cost by 50 percent or more.
9 Nature of Claim/Matter Various psychiatric derivative of alleged medical malpractice Existing Claim Duration Approximate Actuarial Reserve/ Matter Value Research Findings 5 months $1,000,000 Collection of Facebook (FB) material provided persuasive evidence for litigation and professional standards review Effort (Approx. Hours) 3 Regulatory Enquity False and misleading advertising n/a Significant but regulatory sanctions unclear Collection requirement of FB posts and Tweets by Corporation. Preservation of Website activity and blogs over three years. Leg injury 21 months $950,000 Significant online presence, active on Facebook, ebay, Youtube. Confirmed the insured was running an active online business and key information would be available from bank statements or ebay transaction blogs Diabetes and sciatica 85 months $370,000 Found material indicating extensive travel to the Middle East undeclared to insurer in geotagged phots and postings from the Middle East Disability migraine headaches 56 months $150,000 Strong indications that the insured was operating an online business undiscovered to the insurer. Periodically active assisting at conferences (LinkedIn reccommendations flagged) 5 Injured back 10 months $170,000 Collected photos show the insured appears to be physically mobile and running an income generating advisory business that was not declared toi the insurer Depression 33 Months $1,500,000 Phone numbers still listed on social media and blog pages indicating activity Anxiety and panic attacks 19 months $1,450,000 Appears to be frequently traveling for recreation/ vacation; these appear to contradict claim or severity of claim. Depression 25 months $2,500,000 Significant online activity since date of claims, predominately on Twitter discussing complex topics. The pattern of tweeting is consistent with no breaks. Ongoing monitoring recommended. Related Total and Premanent Disablement insurance claim is expected to follow for an additional $500k Depression-dysthymia 17 months $1,250,000 Appears to be operating an IT business and patronising industry events. Medical epicondylitis 22 months $500,000 Appears to have misstated occupation and credentials on application, thus overstating income. Angina. Pain Syndrome 12 months $65,000 Attended social functions which were a considerable distance from the insured s home when claims specify the insured is immobile
10 7. WHAT EXPERIENCE DOES LEWIS BRISBOIS HAVE WITH PREDICTIVE CODING? We have been working with predictive coding algorithms for more than four years. We found latent semantic indexing ( LSI ) to be an extremely efficient way to sort through large data sets years before Magistrate Judge Peck endorsed the use of this technology in the 2012 DaSilva Moore v. Publicis Groupe & MSL Group decision. A white paper Lewis Brisbois prepared with ACT Litigation Services, Inc., in 2010 entitled SOLUTIONS TO EXPLODING DISCOVERY COSTS THAT IMPERIL LITIGATION AFFORDABILITY AND COURT ACCESS [link] addressed in detail how we were using LSI and statistical sampling to dramatically reduce ediscovery costs since We continue to use these time tested approaches today. 8. WHAT EXPERIENCE DOES THE FIRM HAVE AND WHAT RESOURCES CAN IT BRING TO NEGOTIATIONS ABOUT ediscovery PROTOCOLS? Lewis Brisbois negotiated discovery protocols for large data cases since well before the Federal Rules of Civil Procedure were amended in We work closely with consultants and clients to understand the data sets, which may be subject to discovery. Identifying which metadata fields should be utilized and defining appropriate parameters for legal holds are among the many ediscovery topics our practice group regularly evaluates. If large numbers of custodians or large data volumes are involved, we seek stipulated Case Management Orders customized for the case. To contain costs, discovery can be limited to specific custodians, conducted in phases and coordinated with motions or alternative dispute resolution or whatever else makes sense. If negotiations fail, we move for Case Management Orders to keep discovery from spinning out of control as they threatened to in the example in the next paragraph. In one recent matter, we had an electronic data set consisting of 35 million pages. The paper files were one tenth as large. The first discovery request to our client sought ESI and responding to it would have cost at least $2 million, even using contract attorneys for the first tier review. Invoking the proportionality concept embedded in the Federal Rules, we convinced the court, over vehement objections from other parties, to stay conventional discovery. It ordered the parties to use the 3.5 million page paper file as a surrogate for the much larger ESI data set. The paper was scanned, OCRed, bibliographically coded and unitized so review platforms could be used to search them efficiently. After deposing a small number of persons most knowledgeable (FRCP 30(b) (6) witnesses) and reviewing the documents, the parties conducted a four day mediation, which was effectively a mini-trial. Our client estimated the cost to get ready for trial using conventional methods would have been $10 million. The total legal spend was $700,000. Our client attributed the cost effective result to the Case Management Order. Generally, transparency and adherence to the Sedona Cooperation Principles improves these processes and lowers the cost associated with ediscovery issues. As discussed below, when we have disclosed our analytics based review results to opposing counsel and allowed them to see samples from various data populations, we have been able to reduce costs by 75 percent or more compared to a human review of all culled and filtered documents selected by agreed search protocols.
11 We also have experience protecting our clients against adverse rulings and sanctions when things go wrong in ediscovery. Over the last ten years, we have handled a wide variety of discovery motions relating to clients information management systems and the collection, preservation, processing, review and production of ESI. Instances where data from particular custodians was lost, sometimes after the litigation hold was in place are particularly challenging. The reasons vary. Uploading protocols were not observed. Executives maintain their own devices and create unique content on them. Ex-employees fail to honor a litigation hold request. In situations like these, we have been able to avoid sanctions by gathering information to and from that custodian contained in the files of others. In effect, we create a virtual custodian. We have shown the loss of a custodian s records caused no prejudice because the data belonging to that custodian could be reconstructed. 9. WHAT EXPERIENCE DOES THE FIRM HAVE WITH MANAGING DOCUMENT DATA BASES FOR ediscovery? For smaller cases, we work with data bases hosted internally on Concordance. In larger cases, we prefer to use cloud based solutions for hosting and review. We work with a number of different consultants including, Advanced Discovery, Autonomy, Teris, Discover Ready, Epiq, Merrill, Canon Business Systems, Intelligent Discovery Solutions, and FTI Consulting. We have experience with proprietary and commercially available review platforms, including Case Data, Ringtail, Relativity, Catalyst, iconnect and Cataphora. Ideally, ESI should only be processed once, regardless of the number of litigants involved. Whenever possible, we seek to share those costs among the parties. In one case, we were able to get a Case Management Order directing all parties to use the same vendor. The savings were huge. Because the 50 parties involved split the cost of processing, the cost to each party was only two percent of what it would have been had each chosen to go it alone. Similar savings can be achieved with respect to hosting if data is properly coded. This approach was used successfully in the case described in FAQ No. 2. A collateral benefit of using a single vendor can be elimination of needless discovery disputes. The culling, filtering and search processes utilized by different vendors are not identical. Even when the same software is used, the sequence in which it is used or the versions of the programs used can affect what is produced. So, identical searches of the same data will yield different results because the data was processed differently. These differences often result in mistaken allegations of withholding information or spoliation and attendant law and motion expense educating the court and opposing counsel about why searches whether based on keywords or algorithms never achieve perfect precision and recall. 10. WHAT EXPERIENCE HAS THE FIRM HAD MANAGING DOCUMENT REVIEWS EITHER BY OUTSOURCED ATTORNEYS OR ADVANCED ANALYTICS? We have substantial experience with three models of document review. On small data sets, usually under two gigabytes ( GBs ) of information, our Lit Support paralegals work with in-house tools like Concordance to conduct linear reviews because the volume of ESI is small enough that
12 the additional costs associated with more sophisticated review platforms and analytic software may not be warranted. With larger data sets, we have two options. One is to use contract review attorneys or the clients internal review teams to conduct the first tier review. This option is chosen when it is important to have eyes on every document. The other option is to utilize analytics or expert consultants and a small number of experienced attorneys to conduct a review focused on those documents most likely to be relevant. Our experience with the second option establishes it can be at least 75 per cent less costly than a review relying on outsourced review. Much of the savings results from not looking at those portions of a data set which are unlikely to contain relevant information. Additional savings result from the fact the Firm s attorneys do not have to bill to examine the documents already reviewed by contract attorneys. In either case, we review performance metrics and conduct a quality control review to ensure the results are defensible. The second option for large document projects is particularly effective when cost is a paramount factor. We have used it successfully when defending insureds with declining limits policies. In one case where the budget for an outsourced review of the client s data would have exceeded the available policy limits, we used the second option, reviewed the client s data, defended the insured, settled the case and saved the insurer 15 percent of its policy limits. When the different options have been used on cases with comparable volumes of data, we found the cost of the tier one review using contract attorneys was nearly the same as the entire legal spend using the analytic option. Predictive coding, addressed in FAQ No. 7 is a particularly powerful tool and was used in the ERISA and fraud case described in FAQ No WHAT RESOURCES AND EXPERIENCE DOES THE FIRM HAVE TO MANAGE PRODUCTION OF ESI AND TO PREPARE WITNESSES TO ADDRESS ediscovery ISSUES? Our staff of Litigation Support Paralegals based in our major offices supervised by the Chair of the Electronic Discovery Privacy Practice Group assists our attorneys with ediscovery issues. They are trained to support our internal Concordance data bases and assist with project management of larger ediscovery projects. The paralegals also work closely with the attorneys in our Class Action Practice Group because many of their cases involve large data sets. Our Lit Support staff also work regularly with outside vendors and assist our attorneys to make cost effective decisions when the needs of a particular case require options more advanced than can be provided through our Concordance software. Lewis Brisbois is finalizing its panel of preferred ediscovery vendors and price lists to ensure our clients are charged competitive rates for ediscovery services. Lewis Brisbois has developed manuals and checklists to assist its attorneys and Lit Support staff to comply with what the American Bar Association has called best practices when preparing for early disclosures required by the Federal Rules and state analogs. These materials, available on the Firm s Intranet, are directed to both the discussions with client representatives and with counsel for other parties. We also have a collection of proposed orders which can be adopted by stipulation or motion.