E-Discovery Work Moves In-House to Cut Costs, Survey Finds

Organizations are finding opportunities to control their legal spending by moving more e-discovery work in-house, a recent survey by Exterro Inc. and the Blickstein Group suggests.

A survey of 59 in-house legal decision makers found that more of them expect that in-house legal spending will increase this year than do outside legal spending. Forty-eight percent of respondents said inside legal spending will increase this year, compared to only 25 percent who said so in an Exterro-Blickstein Group survey conducted last year.

Meanwhile, only 38 percent of respondents expect outside legal spending will increase this year, and another 38 percent said outside spending will decrease. About 12 percent expect inside legal spending will decrease.

The survey also found that bringing the e-discovery process in-house is a common and effective way to control spending. Seventy-five percent of the respondents said they are using the technique to control e-discovery costs, and it was given an average score of 4.16 out of 5 in effectiveness.

There will always be legitimate reasons to use outside counsel for certain matters, but right now many organizations still haven’t found the optimal balance between internal and external spending, Bill Piwonka, chief marketing officer of Exterro, told Bloomberg Law. Exterro is a Portland-based e-discovery software provider that offers products designed for in-house legal and IT departments.

E-discovery can represent a large chunk of a legal department’s budget, he said. And with the technology available today, companies can handle the e-discovery process for smaller matters, he said.

Controlling the Process

“As we are now almost two decades into the era of [electronically stored information], most respondents today consider themselves effective at controlling their e-discovery spend, with more than 60 percent rating their company at least a 3 on a 5-point scale,” the survey said.

Organizations are focusing on legal project management and are treating e-discovery like other business processes, Piwonka said. Many of the steps taken during e-discovery will be the same every time, which means organizations can automate many tasks, he said.

Control over the e-discovery process is a priority for companies, Brad Blickstein, principal of the Blickstein Group, told Bloomberg Law.

More e-discovery legal work may shift back to outside counsel in a couple of years. But companies will still want to maintain control over the e-discovery work they delegate, he said.

To contact the reporter on this story: Michael Greene in Washington at mgreene@bloomberglaw.com

To contact the editor responsible for this story: S. Ethan Bowers at sbowers@bloomberglaw.com