E-Discovery Technology: A Fast-Growing Industry that Corporate Counsel Have Been Slow to Adopt

When it comes to adopting new technologies to aid in litigation work, a recent survey of 130 chief legal officers, general counsel and in-house attorneys reveals some conflicting insights. The survey, conducted by Catalyst and Bloomberg Law, shows that while many recognize the importance and value in these technologies, cost concerns have limited broader adoption. In the following Q&A, Darby Green, Bloomberg Law Commercial Director for Litigation, speaks with Ethan Bowers, managing editor of the Bloomberg Law E-Discovery Practice Center about why this might be the case.

Green: In the survey, nearly three quarters of the respondents said their companies purchase e-discovery technology on an “as-needed” basis. Why do you think companies wait until the need arises?

Bowers: Corporate General Counsels are still experiencing severe budget constraints remaining from the economic downturn of the early 2000’s and continue to avoid major financial expenditures, if they can possibly postpone them. Many also find it more cost-effective to outsource all but the most basic e-discovery functions to their outside counsel.

A reactive model may be an easier “sell” to the business decision-makers. Getting funds for an immediate e-discovery emergency is simple, but the need to proactively prepare the company for future e-discovery needs is something for which it’s harder to win management buy-in.

Finally, given how fast technology is progressing, the fear that an expensive, all-encompassing e-discovery solution will rapidly become obsolete is another factor in the “purchase as-needed” trend.

Green: Is buying e-discovery technology reactively an effective way to keep e-discovery costs under control?

Bowers: It could prove to be penny-wise but pound foolish, particularly for large corporations that are involved in serial litigation, like car manufacturers or pharmaceutical companies. Those businesses need streamlined, reliable, repeatable, verifiable e-discovery processes. Reinventing the e-discovery wheel each time a company is on the receiving end of a lawsuit is a sure way to blow a litigation budget.

And e-discovery costs can balloon when a company’s systems are designed without taking future e-discovery needs into account. In-house counsel should be involved at the outset when a company is implementing a new IT system, to ensure that data can be searched and retrieved when the need arises, and to keep the proliferation of unnecessary data under control.

Green: How does a reactive approach to e-discovery affect a company’s ability to manage data volume?

Bowers: Data management is probably the area where corporations that are reactive suffer the most. If an effective, enterprise-wide approach to managing electronically-stored information is not in place, data can proliferate unnecessarily. An unnecessarily inflated data set means that review time – and accordingly, costs – are similarly inflated.

Green: Automation and customization has caught on, but a sizeable portion of companies still aren’t using it. What obstacles are preventing more widespread use of this technology?

Bowers: There are so many options for advanced e-discovery software, and in-house counsel may feel paralyzed by the vast array of choices. Lawyers are also by nature risk averse. Doing things “the way we always do” is unlikely to land anyone in hot water, but going out on a limb to implement an entirely new approach could be seen as risky. Which is unfortunate, because companies could save substantial sums with automated, customized e-discovery software.

The Bloomberg Law E-Discovery Practice Center can help in-house attorneys understand the benefits of customized solutions, with its reporting on emerging e-discovery technologies, software providers, and accepted best practices when using advanced e-discovery tools.

Green: Data visualization and analytics is used by less than a quarter of the survey respondents, and just over a quarter encourage counsel and vendors to use machine learning. Why has the adoption of these technologies lagged behind?

Bowers: Machine learning, data analytics and visualization are relatively novel concepts for lawyers; their unfamiliarity with the technology is a huge obstacle to adoption. Bloomberg Law, which regularly reports on innovative developments in the E-Discovery Practice Center, is a great resource for becoming knowledgeable and comfortable with these processes. Our reporting shows that courts are becoming increasingly sophisticated in their understanding of machine learning as it applies to e-discovery. In-house counsel can point to these cases when selling management on the need for analytical tools.

Green: Technology Assisted Review (TAR) fared much better, with 73 percent of regular e-discovery tool users saying they have used TAR within the last two years. Is this a sign that TAR has become more accessible in terms of costs and usability?

Bowers: The decreased costs of TAR is definitely resonating with the profession. For one thing, TAR is much more scalable than when it was initially introduced, making it usable for less complex matters with smaller data sets. In addition, many corporations are already adopting TAR for their Information Governance needs, which is a trend likely to expand going forward.

Those interested in learning more about e-discovery trends and news from the past year, can hear Ethan Bowers speak on a webinar panel today, Friday, December 1, as part of E-Discovery Day.