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Electronic Discovery

Predictive Coding is Officially Approved in First English Case: eDiscovery Case Law

Last month, in Pyrrho Investments Ltd v MWB Property Ltd [2016] EWHC 256 (Ch), citing the landmark DaSilva Moore case (among other authorities), Master Matthews approved the use of predictive coding, due to the “enormous” expense of manually searching through the three million electronic documents associated with the case.  This is the believed to be the first time an English court has approved the use of predictive coding.

In this case, the parties, through several rounds of correspondence, “agreed on the (automated) method to be employed”, which “involves ‘predictive coding’”, and “also the scope of the keywords to be employed”.  Citing DaSilva Moore, Master Matthews referenced several comments in Judge Peck’s decision nearly four years earlier, including:

“The decision to allow computer-assisted review in this case was relatively easy – the parties agreed to its use (although disagreed about how best to implement such review). The Court recognises that computer-assisted review is not a magic, Staples-easy-Button, solution appropriate for all cases. The technology exists and should be used where appropriate, but it is not a case of machine replacing humans: it is the process used and the interaction of man and machine that the court needs to examine…The goal is for the review method to result in higher recall and higher precision than another review method, at cost proportionate to the ‘value’ of the case… Computer-assisted review appears to be better than the available alternatives, and thus should be used in appropriate cases.”

Master Matthews also referenced Irish Bank Resolution Corporation Ltd v Quinn, where the Irish High Court also endorsed the use of predictive coding.  In that case, the process was proposed by the plaintiffs and approved by the court over the objections by the defendants.

In approving the use of predictive coding in this case, Master Matthews provided these factors in favor of the decision {emphasis added}:

“(1)          Experience in other jurisdictions, whilst so far limited, has been that predictive coding software can be useful in appropriate cases.

(2)           There is no evidence to show that the use of predictive coding software leads to less accurate disclosure being given than, say, manual review alone or keyword searches and manual review combined, and indeed there is some evidence (referred to in the US and Irish cases to which I referred above) to the contrary,

(3)           Moreover, there will be greater consistency in using the computer to apply the approach of a senior lawyer towards the initial sample (as refined) to the whole document set, than in using dozens, perhaps hundreds, of lower-grade fee-earners, each seeking independently to apply the relevant criteria in relation to individual documents.

(4)           There is nothing in the CPR or Practice Directions to prohibit the use of such software.

(5)           The number of electronic documents which must be considered for relevance and possible disclosure in the present case is huge, over 3 million.

(6)           The cost of manually searching these documents would be enormous, amounting to several million pounds at least, hr my judgment, therefore, a full manual review of each document would be “unreasonable” within paragraph 25 of Practice Direction B to Part 31, at least where a suitable automated alternative exists at lower cost.

(7)           The costs of using predictive coding software would depend on various factors, including importantly whether the number of documents is reduced by keyword searches, but the estimates given in this case vary between £181,988 plus monthly hosting costs of £15,717, to £469,049 plus monthly hosting costs of £20,820. This is obviously far less expensive than the full manual alternative, though of course there may be additional costs if manual reviews still need to be carried out when the software has done its best.

(8)           The ‘value’ of the claims made in this litigation is in the tens of millions of pounds. In my judgment the estimated costs of using the software are proportionate.

(9)           The trial in the present case is not until June 2017, so there would be plenty of time to consider other disclosure methods if for any reason the predictive software route turned out to be unsatisfactory.

(10)         The parties have agreed on the use of the software, and also how to use it, subject only to the approval of the Court.”

In approving the use of predictive coding in this case, Master Matthews also stated that “There were no factors of any weight pointing in the opposite direction.”  And, saving us the trouble of checking to see if there were any previous English cases that approved predictive coding, he noted that “a search of the BAILII online database for ‘predictive coding software’ returned no hits at all, and for ‘predictive coding’ and ‘computer-assisted review’ only the Irish case referred to above.”

In his blog, eDisclosure Information Project, Chris Dale (whose thought leader interview on this blog was published last Friday), posted his reaction to the decision and referenced several other blogs and publications with their coverage of the decision as well.

So, what do you think?  Will this case become the “DaSilva Moore” for English courts?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Pete Feinberg of Consilio: eDiscovery Trends

This is the seventh of the 2016 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscovery Daily interviewed several thought leaders at LTNY this year to get their observations regarding trends at the show and generally within the eDiscovery industry.  Unlike previous years, some of the questions posed to each thought leader were tailored to their position in the industry, so we have dispensed with the standard questions we normally ask all thought leaders.

Today’s thought leader is Pete Feinberg.  Pete is Senior Vice President of Product Strategy at Consilio, responsible for the overall product strategy and product management of Consilio’s products and services line.  Prior to joining Consilio, Pete ran marketing for the largest vertical of Blackboard – a Washington DC-based education technology company. Prior to that, Pete served as vice president in various product, partner marketing and eCommerce roles at a variety of B2B software and B2C eRetail companies in the Washington DC area. Pete’s specialties are in guiding product strategy, bringing new products and services to market, representing the voice of the client as an executive “client advocate”, and guiding the service delivery organization to engage with clients not as a vendor, but instead as a trusted advisor.

What are your general observations about LTNY this year?

For me, LTNY has always been about connecting with clients and prospective clients.  As we do so, we hearing about the challenges that people are having, and what they’re doing to tackle those challenges, and what we ought to be doing as a services provider to help them overcome those challenges.  In that regard, I think it has been a great LegalTech.

From my vantage point, it makes an awful lot of sense for those in the legal community to come in every two years to stay connected, understand the state of the technology in our industry, talk with people that you haven’t seen in a while and be a part of the innovation and evolution of our space.  From that perspective, it has been a very fulfilling LegalTech and I’ve had a lot of fun doing so.

At the end of the day, LegalTech or anything else we do is about connecting with our clients.  It’s about making sure that we have the opportunity to have that discussion.  If that discussion can happen in a large format, splashy booth – so be it.  If it can happen in other venues that are less expensive, that’s even better.  What’s important to us – and guides all that we do here at LTNY – is making sure that we have that discussion with our clients one way or another.  We’ll continue to recalibrate and figure out our best approach to LTNY as we go.

It seems like acquisition and investment in the eDiscovery market is accelerating, with Consilio being forefront in that acquisition and investment in the market.  Do you feel that we are beginning to see true consolidation in the market?

Our industry is reaching a plateau of maturity.  My history in the eDiscovery and legal space goes back three years, so I’ll echo what I’ve heard from those who’ve been in the space before I got here.  Those long-timers tell the story that there was a time when LegalTech was not always all about eDiscovery.  But right now, when you look around, it’s almost an eDiscovery event and other technology is more of a footnote.  That may be overstating it a bit, but let’s just say that eDiscovery providers are taking a dominant position in all of the major signage around the show and, if you look at all of the major booths on the exhibit floor, they all seem to be eDiscovery-oriented.

In the past couple of years, the common theme people were echoing was a sentiment of disappointment or feeling of loss that there was no new “next big thing”.  That’s a bit of a head scratcher personally, because technology will proceed at technology’s pace and it seems that statement is somewhat grounded in expectation that technology is always going to come up with some discontinuous innovation in a 12 month cycle that’s going to turn the entire market on its head and that’s just not a reasonable expectation as markets mature over time.

I also believe the activity that we’re seeing on the consolidation and M&A front is very indicative of the market maturing.  Niches have largely been filled.  And US-centric service providers have increased their depth, either organically or through inorganic acquisition.  But there is still a bit of a “wild west” openness outside of the US.  In Europe, there are fewer true providers and in Asia, there are fewer true providers still.  So, there is still opportunity for investment, innovation and growth, and I expect that’s going to continue to create attractive M&A targets.

But, I think the consolidation wave that preceded this Legaltech is evidence of market maturation.  There will always be innovation, even today, even in this LegalTech, you still see folks that are coming up with interesting ways to spin technologies with existing underlying engines.  Now it may not be “discontinuous, next big thing innovation”, but there is a constant, steady stream of innovation all around us exemplified by providers at this very show.  For example, analytics engines have been around for a while, half-a-dozen years even, but now you see them presented and integrated into meaningful workflows that are pragmatically useful to attorneys – better than in the past.    So, I think you’ll continue to see refinement of technology and refinement of workflows and a focus on meaningful, useful exposure of those technologies to attorneys.   So the market should expect that providers will continue to do interesting things, but those things may not be considered big and splashy and “next big” level of innovation.

Going back to your question in terms of consolidation, as markets mature, it’s naturally going to happen.  Investors, at some point in time, will want to realize return and that often happens through a sale.  I also think that there are some macro trends in the market that are fueling this trend.   In fact, there is actually an article in LegalTech News (the printed magazine) called Shark Bait by Zach Warren that is very much about this topic.

We’re continuing see evolution of eDiscovery into a true global industry.  Multinationals have global operations, they have data stores around the world in disparate systems, that originated from within smaller acquired companies.  So there are these pockets of data that the global entity really is unfamiliar with.  Then when matter sparks, the legal team – who is the least aware of these data stores – have to get their data from data stores in Serbia or Singapore.  If those legal teams have a mid-market eDiscovery services provider that is US-centric, well, that poses challenges.  We are seeing more cross-border matters, and more data collected from data stores outside the US – and as that trend continues, that will fuel the need for service providers that can support that global reach.

At Consilio, we made that leap to being a truly global eDiscovery services provider earlier than most folks did.  We were doing this back in 2006 and 2007.  We made our own missteps as you would expect of all companies doing so, but we persevered and became a truly global (in fact, by some measures more global than domestic) eDiscovery provider.  That made us very attractive for investment.  It’s one of the reasons that Shamrock Capital invested in Consilio and it’s a similar situation to what is fueling some of these eDiscovery acquisitions happening today.  Multinationals need global reach and they also need depth of bench – they need both.  Those providers that have both will be successful.

One trend that I’ve observed is an increased focus on automation and considerable growth of, and investment in, eDiscovery automation providers.  What are your thoughts about that trend?

We have to think about the eDiscovery technology market in subsectors or subcomponents.  Consider that eDiscovery is a very different game for a 175 custodian, six year collection out of systems that originate in Japan or Belgium than it is for a mid-sized law firm that generally focuses on employment law with one or two local custodians over a six month period.  These are very different things.

Those who aren’t serial litigants, and are focusing on more small-scale matters don’t always necessarily want to put those matters into Relativity.  They don’t want to have to go through an elongated processing step.  They just have a PST from somebody in the organization and they just want to look at those documents and apply a couple of tags.  So, on the one hand, you’re seeing automation from folks like Everlaw or CloudNine that allow for the “automation” of just dragging a PST folder into a web app and the files unpack automatically and the metadata is created, with simple point-click-go tagging.  That need exists and I think there’s a model now (and I’ve heard it a couple of times this week alone) where attorneys have said “I like self-service”.  Up to a point.  In cases where that’s a preferred flow leveraging automation, the attorney may have a need to graduate to Relativity or some other more mature platform with project managers who will provide value and guidance and best practices – but there is a cost to that.

I believe that there is a long-term trend in the market toward self-service.  That means that providers must and will continue to refine their user experiences and software in a way they were not three to five years ago.  I think it’s a responsibility of technology creators and innovators to meet the market where it is and to bring it forward and I think automation is a big, big part of that.

Let me also add that even at the large-scale end of the market, typically with companies that are used to a routine frequency of matters, there is a need for automation.  Along these lines, one of our strategic clients stopped me during our discussion about technology and said “tell me about automation in your platform”.  This is a client that has total eDiscovery spend well north of $100 million per year.  And, even in that scenario, she was interested in automation.  The reason is that these large scale investigations get very complex.  One of our most complex matters, we actually have over 3,200 discrete assignment batches within a single security group in a project that, itself, has five different security groups.  When you have 3,200 assignments, how do you keep track of all that?  Well that needs to be visualized, and the workflow needs to be automated – especially when you have project managers that are billing north of $100 US per hour who would otherwise be performing these tasks.  These clients need self-service for the large-scale matters just like clients do for the smaller-scale matters.  So there’s a drive toward automation at all levels of the spectrum.

What are you working on that you’d like our readers to know about?

Our story is pretty simple at LegalTech this year.  We’ve brought together not just two companies, but three companies, with the inclusion of Proven Legal Technologies – a well respected eDisclosure services and litigation support company in the UK.  We’ve brought together these fantastically experienced pieces, but we’ve done so in a way that’s so complementary.  I’m not sure that I’ve ever seen its equal in my years, not only in this industry, but in other industries where I’ve worked.

If you asked Huron Legal before the acquisition who their target client is, they would say it’s the Fortune 2000 multinational corporation with global operations with some sort of investment already made in their own in-house eDiscovery capabilities.  From Consilio, you would have heard pretty much the same answer.  You would also have heard the same answer on the law firm side – that we tend to partner with AmLaw 200 law firms that have some level of global operations and tend to get involved in global investigations and large-scale litigation.  On the surface, you would probably say that these two organizations probably have a tremendous amount of overlap.  But, now that we’ve put the pieces on the table side-by-side, it’s phenomenal how tremendously complementary they are and how they don’t overlap.  When you look on a client basis, there are a very small handful of our clients that are actually shared and even those that are shared tend to be law firms with a different practice area, so even those aren’t completely shared.  Less than five percent of our total client base actually overlapped, which is phenomenal.

When you look at capabilities where Huron Legal was incredibly strong – Relativity hosting, Nuix processing, Brainspace analytics and an incredible depth of bench here in the US, but not outside of the US – it married perfectly with Consilio’s tremendous global capability that dates back to 2006 where we made investments in APAC and Europe.  So, there was also a tremendous complementary nature to our businesses that way.  Consilio also has a deep history of doing its own innovation.  And the things that we’ve done around audio review and chat transcript review (which seems to be a huge trend in the market right now).  There are communication types that need to be evaluated and not necessarily in the same manner as email.  This type of innovation engine is complementary to the whole as well.  As you go down the list, you see that this is pretty much a marriage of strengths.

What has been really interesting to us (and I think is indicative of our market feedback), when we look at what is entering our pipeline, it is exactly the type of matters in which we want to get involved – large-scale litigation, complex matters, cross-border or non-US investigations.  It is the outsourced approach where our clients want us to handle processing through production for them, and help them leverage analytics when they’re not comfortable doing it themselves.  These are the types of matters where we are being called to service and it’s hugely gratifying to know that the thesis of the case was right – to bring these companies and technologies and depth of bench together.  It’s what we want to be known for.

Thanks, Pete, for participating in the interview!

And to the readers, as always, please share any comments you might have or if you’d like to know more about a particular topic!

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Chris Dale of The eDisclosure Information Project: eDiscovery Trends

This is the sixth of the 2016 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscovery Daily interviewed several thought leaders at LTNY this year to get their observations regarding trends at the show and generally within the eDiscovery industry.  Unlike previous years, some of the questions posed to each thought leader were tailored to their position in the industry, so we have dispensed with the standard questions we normally ask all thought leaders.

Today’s thought leader is Chris Dale.  Chris is director of the UK-based eDisclosure Information Project.  Chris qualified as an English solicitor in 1980 after reading History at Oxford. He was a litigation partner in London and then a litigation software developer and litigation support consultant before turning to commentary on electronic disclosure / discovery. The e-Disclosure Information Project disseminates information about the court rules, the problems, and the technology to lawyers and their clients, to judges, and to suppliers. He was a member of Senior Master Whitaker’s Working Party which drafted Practice Direction 31B and the Electronic Documents Questionnaire. Chris is also a well-known speaker and commentator in the UK, the US and other common law jurisdictions.

What are your general observations about LTNY this year and about emerging eDisclosure (eDiscovery) trends overall?

{Interviewed the first morning of LTNY, so the focus of the question to Chris was more about his expectations for the show and also about general industry trends}.

I used to check off all of the sessions that I planned to go to, then so many meetings and other things came along that I’ve long given up even looking at the schedule.  I do my interviews and other meetings and if I have time for anything else, it’s a luxury.  I do a lot of video interviews, and two panels in addition to the one I did yesterday, and that’s enough.

In technology terms, the stress on visualization is important because it will induce lawyers in to take a look at the demos.  The idea that they can see broad pictures and go down to the details is becoming more interesting and I’ve been impressed with some of the products that I’ve seen.  Trying to get the lawyers in and trying to get them to see the time saved and reduced time scales that might actually give them a strategic advantage is key to getting them to adopt the technology and visualization is a key part of that.  One of the troubles here in the US is that everybody thinks defensively still.  The mindset is still very much post-Zubulake and “we’ll be in trouble if we don’t do this”.

One of the potential advantages that I’m seeing specifically in visualization is that people might actually begin to see benefits.  There’s evidence in there, not just threat or risk.  It’s less of a “black box” to the lawyer.  There’s a strategic advantage in knowing early on what you’re going to do.  There’s more to that than just visualization, but we’re seeing tools that are aimed at that.  All those years when everybody talked about Early Case Assessment, it became just a phrase.  But now, we’re beginning to see tools that genuinely make that possible.  It’s a tactical advantage of being on top.  Craig Ball is always talking about whether you would rather be the one who can say “we’ve got this, this and this and that and that” and “this is our document retention policy and how we deal with BYOD, how about you?”  The tactical benefits from having this information early on is a huge benefit for lawyers.  The more you can visualize and the less it seems like a “black box”, the better.

One trend that I’ve observed is an increased focus on automation and considerable growth of, and investment in, eDiscovery automation providers.  What are your thoughts about that trend?

Other than for those who are early adopters, these providers will, to some extent, meet the same resistance because it is seen a “black box” that is doing the lawyers’ job for them and the concern will be the double-level of “what happens to my job” and also “how do I know it’s doing it right?”  For these providers, the education side will be just as important to the automation side in allaying those fears and concerns and showing them that it can do the processing just as well and faster.  Clearly, whether you’re talking about processing files or cleaning the house or whatever, anything that can do the job faster and easier has got to bite.

How do procedures and rules in the UK differ from those in the US with regard to handling of electronically stored information?

One difference is that proportionality really does mean something in the UK and is hammered down your throat at every opportunity.  Here, there are some judges who get the point, but there are an awful lot of lawyers who don’t get it.  The idea of balancing risk against cost, which is what proportionality really amounts to, is tipped heavily by the point that I made earlier about risk being the driving factor.  On that particular point, the rules have driven us over there longer than they have here.  Proportionality has actually been in your rules, but no one has actually taken an awful lot of notice of it.  I did a panel with Judge Peck yesterday and one of the first times I had seen the word proportionality over here was in one of his opinions (even though it has been in your rules for a long time).

We’re also more consistent when it comes to judge-led direction.  That is because active management is the job of the judge and they have taken it seriously over there.  We’re seeing an increasing number of judges over here take that role on themselves – still not many, but more than before.  Judge Grimm was the first to say “you’ll do it this way” or “why aren’t you doing it that way?” using whatever means within the rules to nudge people in the direction he thought was the right one.  But, it’s not enshrined in the same way here overall as it is with us.  Now, our judges may not appreciate spending most of their time as managers when they probably envisaged when they set up as barristers that they’d be doing trials and arguing elevated points of law.  Instead, many of them are dealing with the mechanics of pushing cases through the system.  I’m not sure they appreciate that.  But, done properly, when coupled with the idea that proportionality is the guiding principle, then you can see the opportunity for courts to say “don’t do this” or “why are you doing that?” and directing cases through the system effectively.

If you want a specific example of that happening in the US, I’ll refer to Judge Peck again in Da Silva Moore (covered by us here), which is famous for all sorts of other reasons.  In that case, you see him directing the parties to put documents aside that may or may not be needed (while still preserving them) because they were in France and would, Judge Peck knew, raise complications because of privacy and data protection restrictions.  I asked him yesterday if that was a spontaneous decision that he made or was it prompted by one of the parties asking.  And, of course, it was him self-starting because he could see the potential of time and money down the drain pursuing something that he knew (because he’s one of the few judges that actually understands EU data protection) that it could be fruitless.  Many judges would look at the rules and say “the rules say to produce it, so produce it”.  But, Judge Peck realizes that’s not a helpful approach, that time and money goes down the drain for the wrong reasons when you do that.  That’s a specific example of a judge rolling up his sleeves and seeing a clear way of saving time and costs.

Last fall, in the Schrems case, the Court of Justice of the European Union (‘CJEU’) ruled that the Safe Harbor pact enabling transatlantic data transfers between the U.S. and European Union should be struck down.  Do you think there will be a new, more effective agreement for transatlantic data transfers in place soon?

Today’s the day, in theory, that there is supposed to be a new method of doing things.  {Editor’s note: Indeed, as we announced here, a new framework was announced on that very day}  I don’t think, in discovery terms, which is the context we’re discussing here, that it matters anyway.  If anybody has been relying on Safe Harbor to bring discovery data to the US, they’re doing it wrong anyway.  If the only grounds for bringing over data was to say it’s Safe Harbor certified, then you’ve been doing it wrong.  And, a lot of people have been doing it wrong, using Safe Harbor to justify what was potentially an unlawful transaction.  I’ve been talking about Safe Harbor since 2008 or 2009, and people would laugh.  They would laugh at the idea that there were companies that wouldn’t follow the order of an American court.  But, privacy has been important over there for some time and it has even become much more important over here than it was just a few years ago.  The very same things that have raised attention in Europe have now raised attention in the US.  Edward Snowden raised attention here before the Schrems case came along.

What the Schrems decision may do is focus the eyes of corporations on the issue, so that when their lawyers – their good lawyers – say to them that there’s a problem here, they will understand that there is a problem.  There will be a few more lawyers who will realize that this is not a game for amateurs.  There have been plenty of amateur US lawyers when it comes to data protection, though some do understand it.  There is a way to do it and you can do it properly if you can articulate to the court your issues.  It’s a cultural issue.  Perhaps there is a history of facing US incursions that involve almost literally kicking the door down – “I have an order of an American court, give me your data.”  That perception has got to change and is changing.  The idea of being in Europe and understanding the culture of Europe is an important one.

That was one (but not the only) expressed motivation behind the acquisition of Huron Legal and Proven by Consilio – to take advantage of the cultural knowledge that each had in their respective markets.  And, there are plenty of other providers that are also doing it very well, involving the lawyers in each jurisdiction.  But, there are others who haven’t.  So, even before we see any new regulation or how the EU is going to react to Schrems, the culture has to change.  I’m not saying that I’m seeing it yet, but there will come a point where companies will want to be seen doing it properly, nobody will want to be seen as punished for breaking the rules.

What are you working on that you’d like our readers to know about?

As always, since 2007 anyway, I have been running the eDisclosure Information Project.  This is my tenth LegalTech.  It was called “eDisclosure” Information Project because I had no ambition to go beyond the UK when I started.  And, very quickly, I ran into lawyers who said that eDiscovery is something that Americans do and what an expensive mess they make of it.  It seemed to me that was an inadequate approach – just to dismiss somebody else’s approach to a major problem, as if it was simply the rules that were the problem instead of the existence of the data.  It was more involved than that and I wanted to explore that, and so the scope of my blog grew from there.

What the US has that we don’t is quite interesting – it’s a strong knowledge transfer from the body of judges who really understand this stuff.  You’re very lucky here in the US to have those judges and, of course, the technology that has been bred by the perceived fierceness of your rules is something the rest of us can benefit from even if we disdain the overall eDiscovery culture here.

So, to come back to your question: what is the mission?  The mission is firstly to promote the idea that the rules are not a bad thing to read.  RTFR is my motto, where the first “R” is “read” and the last “R” is “rules” and you can guess what the “F” stands for.  And, secondly, get out and see some of this technology.  I’m not necessarily promoting any particular one, but, if you don’t see the technology, how can you sit in your office and moan about “black boxes”?  So, the mission is two-fold: it’s rules and it’s look at the technology.

Thanks, Chris, for participating in the interview!

And to the readers, as always, please share any comments you might have or if you’d like to know more about a particular topic!

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Confidence in eDiscovery Business is Up and Here is the Most Comprehensive LTNY Review: eDiscovery Trends

This is a rare two-topic day, but both of these topics are interesting enough that I decided neither could wait until next Tuesday (which is the next day that we’re not publishing a thought leader interview)…

First, you may recall that, last month, we discussed Rob Robinson’s eDiscovery Business Confidence Survey, which he was conducting through the end of February.  The survey has now concluded and Rob has published the results on his terrific Complex Discovery site.  There were 80 total respondents to the survey, which is a reasonably good number, especially for a two-week survey.  Here are some notable results:

  • Providers Were the Majority Respondents: Of the types of respondents, 55 out of 80 were either Software and/or Services Provider (37.5%) or Consultancy (31.3%) for a total of 68.8% of respondents as some sort of outsourced provider. Law firm respondents were next with 20%.
  • Most Respondents Consider Business to Be Good: Over half (58.8%, to be exact) of respondents rated the current general business conditions for eDiscovery in their segment to be good, with only 10% rating business conditions as bad.
  • Almost Everyone Expects eDiscovery Business to be as Good or Better Six Months From Now: Almost all respondents (93.7%) expect business conditions will be in their segment to be the same or better six months from now, with 60% of respondents expecting higher revenue six months from now and 45% of respondents expecting higher profits six months from now.
  • Budgetary Constraints and Data Security are Expected to be Most Impact eDiscovery Business: Perhaps the most interesting question is the one where Rob asked which issue that you feel will most impact the business of eDiscovery over the next six months. Budgetary Constraints (22.5%) led the way, closely followed by Data Security (21.3%), Increasing Volumes of Data (20%), Lack of Personnel (16.2%), Increasing Types of Data (13.8%) and finally, Inadequate Technology (6.3%).  I was surprised how even the distribution was across most of the categories.  The graph below illustrates the distribution.

Rob has published the results on his site here, which shows responses to additional questions not referenced here.  Check it out.

One of the great things about LegalTech New York (LTNY) is the ability to, not only to catch up with familiar faces, but also to meet new thought leaders in the industry.  One of those that I met this year for the first time was Chris Dale, director of the UK-based eDisclosure Information Project, whose thought leader interview will be published tomorrow.

Another was Andrew Haslam, who has a terrific UK-based (it was my year to meet Brits!) site called Allvision, where he publishes various posts, including an annual Buyer’s Guide to eDisclosure Systems and a report from LTNY every year.  This year’s report –titled LegalTech 2016 – Cloud, Consolidation and Cybersecurity (which is comprehensive and succinct at the same time) checks in at 18 pages and is well worth the read.  Here is the link to the report.

Andrew clearly gets around during the show, attending sessions and also meeting with lots of companies during the show.  In his report, he obtained quotes from and reported meetings with several of them, including Litsavant, Yerra Solutions, Control Risk, TRU Staffing Partners, Consilio, kCura, Ricoh, Zapproved, Venio Systems, FTI, QuisLex, TCDI, QDiscovery, Xact Data Discovery, Opus 2 International, Catalyst, UnitedLex, Guidance, IPro, and (last, but not least) CloudNine.  It was nice to meet Andrew and nice to see our write-up as well as to see quotes from us about the show.  As for plans for expansion to the UK (which I love and spent part of my honeymoon in 2014), my motto is “never say never!”  Of course, I will be happy to volunteer to set that up.  :o)

So, what do you think?  What’s your state of confidence in the business of eDiscovery?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Craig Ball of Craig D. Ball, P.C.: eDiscovery Trends

This is the fifth of the 2016 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscovery Daily interviewed several thought leaders at LTNY this year to get their observations regarding trends at the show and generally within the eDiscovery industry.  Unlike previous years, some of the questions posed to each thought leader were tailored to their position in the industry, so we have dispensed with the standard questions we normally ask all thought leaders.

Today’s thought leader is Craig Ball.  A frequent court appointed special master in electronic evidence, Craig is a prolific contributor to continuing legal and professional education programs in the United States and abroad, having delivered over 1,700 presentations and papers.  Craig’s articles on forensic technology and electronic discovery frequently appear in the national media and he teaches E-Discovery and Digital Evidence at the University of Texas School of Law.  He currently blogs on eDiscovery topics at ballinyourcourt.com.

What are your general observations emerging eDiscovery trends for 2016?

{Interviewed Craig after LTNY, as he did not make it to the show this year}

I skipped LegalTech this year – first time in twenty years – because Mardi Gras was early this year, I chose the circus on the Mississippi over the one on the Hudson.  Still, I got lots of feedback from those who attended LTNY while I was catching beads at 29 parades.  I wanted to see if I’d missed anything of note.  The only trend that emerged was lack of change in the focus of the show.  LTNY is still dominated by electronic discovery as it has been for almost a decade; but, there are continued signs of consolidation within the industry as organizations fold into one another.

Not surprisingly, we don’t see outright failure in this space.  Companies don’t disappear, but instead reach a point where whatever is left is absorbed by a national brand for its equipment or core technology.  So, we’ve seen steady consolidation within the industry, and that trend continues.  As the broader economy goes, so goes litigation and discovery.

Another trend that I’ve observed is an increased focus on eDiscovery automation and considerable growth of, and investment in, eDiscovery automation providers.  What are your thoughts about that trend?

The term “automation” has gotten some play lately.  I’m trying to figure out what each usage means because it’s still in the buzzword phase as marketers deploy the term in the never-ending struggle to differentiate their products. Automated workflows are key to Cloud SaaS offerings.  Hosted systems must be capable of programmatic routines to ingest and process data, effecting ready hand-off of data across processing and review.    An automated SaaS offering should be sufficiently autonomous to facilitate workflow across multiple stages of the EDRM with little manual intervention.

Assuming “automation” means  we can put something into the hopper and it will emerge ready for review or production in forms we were expecting, then automation is a necessary precursor to growth and cost effectiveness in hosted products.  That’s positive for consumers if it means price reductions and commoditization of features of electronic discovery.  It may not be so great for the vendor community unless they can scale up the volume.

In the case Nuvasive v. Madsen Medical, the Court recently vacated an adverse inference instruction sanction previously applied against the plaintiff because of the amendment to Rule 37(e).  Do you see that as a trend for other cases and do you expect that other parties that have been sanctioned will file motions to have their sanctions re-considered?

I don’t think it signals a trend. There are relatively few cases that fall into the transition point.  I don’t expect to see a rash of sanctions being reconsidered by virtue of the latest amendments.

Nuvasive is interesting because it goes to the issue of whether it’s fundamentally fair to impose the new Rules retroactively.  The Rules speak to that issue and make it clear that they can be applied retroactively as long as they operate fairly.  The amendments to the Rules make clear that serious sanctions (such as adverse inference instructions) require proof of an intent to deprive a discovering party of the particular information.  Nuvasive involved serious sanctions, so I can see why the Court might want to weigh amended Rule 37(e).  Still, I’m not sure why the parties and the Court failed to anticipate the Rule changes, as the amendment process was pretty far along in July 2015, when sanctions were imposed.  The tenor of the Court’s opinion in reversing himself was that it was just ‘bad luck’ that the amended rules kicked in when they did.

I think that we will see judicial action once termed “sanctions” couched in less-loaded terms.  After Rule 37(e), Courts will distinguish punitive responses from remedial actions designed to rectify unwarranted failure to preserve relevant information. New Rule 37(e) won’t tie the hands of jurists determined to rectify discovery abuse.  We’re already seeing push back from jurists unwilling to surrender discretionary authority when the facts demand fairness.   As well, we’ve seen at least one case where the Court reversed himself, citing 37(e) as the basis for reconsideration.  As is apparent in Nuvasive and in Judge Francis’ recent order in Cat 3, the Rules are tools, and they can be turned this way and that in determined hands.

Sanctions aren’t going away, and that’s a good thing.  We are mired in the last century when it comes to discovery.  Lawyers need direction, and sanctions opinions supply guidance.  There is little in the way of a “carrot” for eDiscovery – all we have is the “stick.”  If courts fail to sanction incompetence and abuse, then lawyers won’t pursue competence, and parties will continue to “twiddle their thumbs” until evidence disappears.  Few lawyers maliciously hide damaging evidence; but, they’re expert at rationalizing it away or, in the case of e-discovery, content to let their ignorance serve as their armor.  “What you don’t know, can’t hurt me,” is their credo.

What are you working on that you’d like our readers to know about?

I’m going back to basics.  Last year was about trying to develop a core curriculum and re-engineer my teaching to make it an engaging foundation in information technology for lawyers.  I hope 2016 will bring an increased ability to push out more information and reach more people.  I’m doing a project for the DC Bar where I will be providing evening CLE programs by live semi-weekly webcasts.  Small groups of motivated people are my sweet spot.  As always, I’m looking forward to this year’s Georgetown University Law School eDiscovery Training Academy, during the first full week in June.  Both the faculty and the students are delightful.  I’ve come to recognize that anyone willing to work at it can learn the technology they need to be formidable in e-discovery in just three solid days.  That’s less time than most of us spend at Starbucks each year.

I’m using the California ethics decision (which we covered here when it was still a Proposed Opinion) as a jumping off point for the concept of core competencies for lawyers.  As you know, the State Bar of California issued an advisory opinion last year identifying nine areas in which lawyers must either be competent in order to accept a case involving eDiscovery or must associate competent counsel or decline representation. That courageous opinion serves as an effective touchstone for talking to lawyers– not just in California, but all over– about the skills they must embrace to be competent to accept a case involving eDiscovery.

There are virtually no cases without electronic evidence, only cases where the lawyers choose to ignore it.  And there is so much more coming!  Never in history have advocates had so much powerful evidence at their disposal, and never have they been so content to look away.  Three days per advocate could change all that—a long weekend.  But, finding the time is only half the battle.  The other half is finding the course that doesn’t give short shrift to the “e” in e-discovery.

Candidly, 2016 is also about taking some time for me.  I’ve been doing 50 to 70 presentations a year for twenty years.  I average about four flights a week; so, I’m hoping to cut all that down by half.  I’m saying “no” more and stopping to smell the roses.  That’s why I’ve gotten a second home in New Orleans, and will spend more time reading, thinking and working on fewer projects with greater focus.  Every teacher needs a sabbatical, right?

Thanks, Craig, for participating in the interview!

And to the readers, as always, please share any comments you might have or if you’d like to know more about a particular topic!

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

No Matter Where You Are, You Can Still Attend the UF EDRM E-Discovery Conference: eDiscovery Trends

This year’s University of Florida EDRM E-Discovery Conference is coming up on March 30.  If you plan to attend in person, great!  But, if you can’t attend in person, the good news is that you don’t have to be there, or even in the state of Florida, to attend.

The fourth annual one-day conference provides a pathway for attorneys, paralegals and support professionals to move beyond simple keyword searching to basic data analytics, covering simple tools such as near duplicates analysis, automatic document grouping through technology assisted review, document clustering, and the process of finding “more like this” to manage your data collection during eDiscovery more efficiently.

The conference features a special kick off in the morning with Craig Ball speaking on the nine eDiscovery skills every litigator and trial attorney must have, includes a luncheon address by the Hon. Ralph Artigliere on emerging eDiscovery ethics and includes several sessions with a number of knowledgeable speakers and panelists covering a variety of data analytics topics, concluding with a judicial panel discussion on court expectations of attorney eDiscovery competence, the new federal eDiscovery rules, and “the good, the bad, and the ugly e-discovery hearing and motion practice.”  A link to the Agenda is here.

General and Ethics CLE credits for the conference are currently awaiting approval.  If you plan to attend in person, the event will take place in Holland Hall at the University of Florida, Levin College of Law.  But, if you can’t attend in person, the event will also be streamed online.  So, you don’t have to be present to win!  Or, at least to learn.  :o)

The conference costs $99 to attend in person or $49 to attend online.  It’s free to attend (either in person or online) if you’re a currently enrolled student in an ABA Accredited Law School, Accredited eDiscovery Graduate program, or Accredited Paralegal program or are University and College Faculty or Professional Staff, Judicial Officials, Clerks, or Employees of Government Bodies and Agencies.  To register for the conference, click here.

So, what do you think?  Are you attending the conference?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Tom O’Connor of Advanced Discovery: eDiscovery Trends

This is the fourth of the 2016 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscovery Daily interviewed several thought leaders at LTNY this year to get their observations regarding trends at the show and generally within the eDiscovery industry.  Unlike previous years, some of the questions posed to each thought leader were tailored to their position in the industry, so we have dispensed with the standard questions we normally ask all thought leaders.

Today’s thought leader is Tom O’Connor.  Tom is a nationally known consultant, speaker and writer in the area of computerized litigation support systems.  A frequent lecturer on the subject of legal technology, Tom has been on the faculty of numerous national CLE providers and has taught college level courses on legal technology.  Tom’s involvement with large cases led him to become familiar with dozens of various software applications for litigation support and he has both designed databases and trained legal staffs in their use on many of the cases mentioned above. This work has involved both public and private law firms of all sizes across the nation.  Tom is the Director of the Gulf Coast Legal Technology Center in New Orleans and he is the Senior ESI Consultant with Advanced Discovery.

What are your general observations about LTNY this year and about emerging eDiscovery trends overall?

{Interviewed the first morning of LTNY, so the focus of the question to Tom was more about his expectations for the show and also about general industry trends}.

When I got here to the show, I bounced around a bit and talked to several people here and I think there’s a lot of uncertainty in people’s minds.  I hate to say that we’re at a crossroads, but a couple of different things are going on in technology right now and I think people are worried that they made the right decision.  I’m talking about both vendors making the right technology decision on where to take their company and clients making the right choice.

I was at a presentation given by the CEO of a major company in our space recently and he was asked “what keeps you up at night?”  He responded that what he was most worried about was whether his company was flexible enough to make quick changes and adaptations in the market, because if you can’t do that, you can lose business really quickly.  You can sink in 18 months no matter what your market share is.  So, as a vendor, you have to be thinking “can I see something and react and respond?”  I think that goes across the board in every segment of the EDRM.  Technology changes so fast and we’re a profession that works by looking in the rearview mirror.  We work with precedent; we don’t want to be that first person out there trying something new.  So, there’s a lot of uncertainty.

Related to that, I think that tension between corporate clients and big law firms is becoming intensified.  Once again, it revolves around questions such as “am I getting the best technology?”, “am I getting the best ROI?”, “should I be bringing eDiscovery in house?”.  I’m seeing a lot of corporations going to master services agreements (MSAs).  That’s something that we do a lot of at Advanced Discovery.  It’s almost like an in-between state where corporations are deciding not to bring eDiscovery fully in-house, but not giving it to the law firms either and they’re saying to companies like ours “why don’t you run it for us?”  If there’s a trend right now, I would say that’s it, especially based on discussions that I had with other show attendees last night.

I always seem to ask you about the state of attorneys and their knowledge (or, rather, their lack thereof) about eDiscovery.  Do you think there has been any positive change in the past year with regard to attorneys’ knowledge about eDiscovery?

A couple of months ago, I asked a well-known judge in the field that question and he said that he’s seen minimal change.  I’ve seen some change, but I think the word I would use to describe it is “glacial”.  There has been some movement.  We’re seeing many more law schools embrace technology training of some sort.  Unfortunately, many of those are not full-time faculty, they are either adjunct faculty or CLE, like the Georgetown eDiscovery Training Academy that I’m part of – that’s actually run by their CLE department, it’s not part of their core curriculum.  Judge Facciola teaches two courses at the school full time and Craig Ball is teaching one at the University of Texas Law School.  But, overall, I haven’t seen schools really embrace the idea that this should be part of the curriculum.  Until that happens, I think the change will continue to be slow.

A great case in point: I think Craig and I did one our standup routine videos for the eDiscovery Channel, where we talked about the California Bar’s recent Formal Opinion (No. 2015-193, which we covered here when it was still a Proposed Opinion) and they listed nine things you need to be able to know how to do.  But, are they going to train people on this?  Who is going to be responsible for educating people on this new duty that they’ve imposed?  Now, it’s only early February, so maybe the Bar in California is going to come up with some sort of program.  But, that’s the quandary that I see – “you have this duty, good luck with that!”

Of course, nobody has the resources to provide that for a million lawyers.  There are some excellent resources out there, like the Georgetown Academy, but we cap that at about sixty students.  Do the math – once a year, sixty students.  Mike Arkfeld has a great course at Arizona State that he has been developing – let’s say, maybe, a couple of hundred people show up there and half of them probably already know everything.  It’s a little bit here and a little bit here, but there hasn’t been a sea change.  I don’t mean to point the finger at the law schools, but it’s just that they would be the most obvious to implement change, along with the bar associations.  But, nobody wants to own responsibility.

I think the third thing is that I’m surprised that there hasn’t been a big commercial attempt at this.  That somebody like a Thomson Reuters or a LexisNexis hasn’t said “we’re going to offer a course”.  It’s almost like everyone is afraid – no one wants to say they’re offering certifications because they’re not willing to take the risk that something might “go south”.  It’s the quandary that ACEDS has had from day one – how to you say that someone is certified when, in many states, it’s considered the providence of the bar association to say that you’re a specialist in a field.  There was a Federal court decision in Florida, I think back in September or October, where a firm who had people with 20+ years of experience indicated that they were specialists and the Florida Bar challenged their right to call themselves specialists without taking the Bar exam to designate specialists.  The firm sued and the court agreed that they had every right to call themselves specialists if they had that much experience.  After that, the bar association backed off and decided not to go after anybody else who does that.  Of course, there’s no standard as to who can call themselves an expert or specialist – is it 10 years or 15 years?  Who knows?  But, it seems to me that’s a door opener that benefits organizations like ACEDS that provide training.

So, in that regard, maybe this year things will open up.  But, it’s like pulling teeth.  Actually, it’s worse than that, it’s like pulling teeth without Novocain.  It’s frustrating.  I remember going around with Browning Marean to law schools 14 or 15 years ago and trying to get education programs going back then, so people have been trying for a long time.  It’s just frustrating.  I understand that people don’t go to law school to learn technology and their wish is fulfilled.  Unless they seek out one of these specialty courses, they don’t get it.

Part of the issue is that we’re faced with bureaucracy – we’ve got state bar associations and the ABA.  You’d think that maybe somebody like the ABA would take the lead on it, but that hasn’t happened.  Without naming names, there are a couple of bar associations where just getting a CLE course approved is like joining the Navy – there are ten page forms to fill out and certify.  Thankfully, not all states are like that.  I do a CLE 3 or 4 times a year for the Louisiana Bar on the basics of technology where we don’t even focus so much on eDiscovery as opposed to just helping them understand how a computer works – teaching them things like what a “bit” is, what a “byte” is, what’s a “temp file”, what is “slack space”, how data is actually stored on the computer.  We’re not trying to give them a PhD in Computer Science in this course, we’re just trying to teach them some basic concepts.  If you want to take on a medical malpractice case, you need to know the difference between an aorta and a fibula.  That’s the level we’re trying to teach – basic stuff.

In the meantime, we’re still encountering people who don’t understand things like why metadata is important and still get in fights over productions about that where they propose to give us just TIFF and text files and we say “no, you’re not”.  There was an appellate decision recently in Texas where Craig was the expert and the producing party claimed it was actually more expensive to produce native files.  What is your native file system, stone tablets?  How can you say that with a straight face?  Of course, if they already have the documents in a Relativity database, maybe they think it’s less expensive than producing native files, because they can simply perform an export.  But, the native files must still be there in the database, the client probably provided them to you and they can be produced.

Advanced Discovery just acquired Millnet, a London-based company.  We’ve been having meetings, trying to do the “vulcan mind-meld” and we were talking about this and they were laughing and I didn’t understand why.  They said that over in the UK, everybody produces native files.  I said “what about Bates numbers” and they started laughing again.  They said that nobody cares about Bates numbers over there.  Of course, it’s a different system over there, less adversarial, and loser pays, but it was like “wow, somebody understands the best way to do this”.  They were aghast to hear that it’s commonplace here.

What are you working on that you’d like our readers to know about?

It’s been literally a year now (since last year’s show) since I’ve been with Advanced Discovery.  I’m doing a lot of CLE, a lot of “lunch and learns” and a lot of client consulting – all about these various issues that you and I have been discussing.  The company has grown a great deal, so I’m jumping around like a “cat on a hot tin roof” (to use a New Orleans analogy) as we have offices from DC to all over California, just purchased a small service bureau in Pittsburgh and have a couple more on the horizon.  As one of my colleague said this morning, “Tom is in New York preaching the gospel of ESI”.  I also write a weekly blog for Advanced Discovery and put it up on my personal blog as well.  So, I’ve been doing a lot of education work.

Also, about once a month or so, Craig Ball and I amuse each other on the eDiscovery Channel on Youtube.  Craig has stepped in where Browning was.  We think we’re the funniest guys in eDiscovery.  Occasionally, we’ll get somebody else to sit down with us as well.

I miss Browning, especially when I come to a show like this.  He was just a genuinely nice guy.  He and I were opposites in so many ways.  Though we were both from the Boston area, he was what they call a “Boston Brahmin”, a “yankee”, a protestant and a partner at a huge firm. I’m South Shore, Irish and a blue-collar worker.  He was hard-core Republican and I’m a hard-core Democrat.  Despite all that, we got along famously.  I think much of that related to our sense of humor, but he also reminded me of the lawyers I knew when I was growing up that made me want to be a lawyer, where the profession was much more collegial.  He became Of Counsel for the firm and I asked him “don’t you miss having a clientele?” and he said “I miss going to court, I miss trials”.  But, he added, “the last ten years, the majority of my clients only wanted a ‘hammer’ – they wanted me to beat the crap out of the opposition, they weren’t concerned about getting a solution.”  Despite that, Browning never lost that collegiality.  I’ve never known anyone who had a bad word to say about him – he was universally liked and respected, even when he didn’t agree with you, he could disagree with you in a very respectful way.

Thanks, Tom, for participating in the interview!

And to the readers, as always, please share any comments you might have or if you’d like to know more about a particular topic!

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Jason R. Baron of Drinker Biddle & Reath LLP: eDiscovery Trends

This is the third of the 2016 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscovery Daily interviewed several thought leaders at LTNY this year to get their observations regarding trends at the show and generally within the eDiscovery industry.  Unlike previous years, some of the questions posed to each thought leader were tailored to their position in the industry, so we have dispensed with the standard questions we normally ask all thought leaders.

Today’s thought leader is Jason R. Baron.  An internationally recognized speaker and author on the preservation of electronic documents, Jason is a member of Drinker Biddle’s Information Governance and eDiscovery practice and also a member of the leadership team for the Information Governance Initiative.  Jason previously served as Director of Litigation for the U.S. National Archives and Records Administration (NARA) and as trial lawyer and senior counsel at the Department of Justice.  He was a founding co-coordinator of the National Institute of Standards and Technology TREC Legal Track, a multi-year international information retrieval project devoted to evaluating search issues in a legal context.  He also founded the international DESI (Discovery of Electronically Stored Information) workshop series, bringing together lawyers and academics to discuss cutting-edge issues in eDiscovery.

What are your general observations about LTNY this year and how it fits into emerging trends?

It’s clear to me that there has been a maturing of the market for the kind of analytics software that some of us have been evangelizing about in the eDiscovery space for some time.  This year, it was noticeable that there weren’t 27 sessions devoted to technology assisted review in e-discovery cases!  However, in place of that narrower focus, there were any number of sessions on analytics and applying analytics to a broader segment of the legal space, which I applaud.

Also, I think there was an acknowledgement that, from the perspective of Information Governance, there is an analytics play to be had.  With bigger and bigger data sets, companies need to face the fact that both employees and customers generate huge amounts of data and they need to make sure that they understand and have visibility into that data.  So, the tools that evolved for purposes of eDiscovery are perfectly suitable – with tweaks – to cover a variety of legal purposes, and we’re seeing that play out at LegalTech.

At LTNY, you were one of the panelists on the Thursday keynote addressing issues such as private servers, bring-your-own-device (BYOD) and other organization challenges for managing data by individual employees.  What do organizations, such as government entities and corporations, need to do manage personal data more effectively?

Well, I’m glad you asked me that.  The session that I had the privilege of speaking on (with Judge Scheindlin and Edward McMahon as fellow panelists and Professor Dan Capra moderating) was all about what I call “shadow IT,” which is a phenomenon that is closely related to but distinct from BYOD.   In the past decade or so, we all have been empowered to simply go to the Internet to use whatever variety of cool apps that are out there, like Google Docs and Dropbox, to facilitate communications and doing work and “parking” documents.  We go out and communicate routinely on Gmail and other forms of commercial services.  All of these activities, to the extent that they involve communications that relate to business or the work of governments, are what I consider to be “shadow IT” in nature because they are not controlled by a traditional IT department in a corporation or agency.

So, maybe a decade ago, if there was a Rule 34 request, you were pretty much assured that all of the relevant material could be gathered by a state-of-the-art IT custodian performing a collection effort against individual accounts on an official system.  That’s no longer absolutely the case.  Today, you need to ask follow-up questions as to where individuals are parking their documents and where are they communicating outside the “official” channel for doing so.

In government, there are very well known, long standing rules for what constitutes a Federal record, including email.  There is an expectation on the part of the public – and there should be an expectation on the part of government officials — that Freedom of Information Act (FOIA) requests for records created about government business will be made available. (Indeed, at least some of those records will be preserved as permanent records in the National Archives of the United States.)  So, it is incumbent to make sure that one follows the rules — and the rules for government are different than what they are for the private sector.  A clear statute in place since 2014 says that anytime that you’re communicating about government business on a private commercial network, you need to either “cc” or forward that message within twenty days to an official record keeping system.  This isn’t the place to get into what regulations were prior to 2014 and how that plays out in terms of the political realm, but our panel did cover the general topic of the responsibility of the officials to make sure that their communications about government business are, in fact, captured in an official system somewhere.

Also, for some time, I have been a very big advocate of email archiving and capture technologies generally, so that we don’t lose history and don’t lose a broad swath of government records that are otherwise not going to be captured if you simply leave it to individuals themselves to take steps to preserve. 

The problem of shadow IT is one that is equally of concern in the private sector because high level corporate officials sometimes, in various verticals, are governed by strict email archiving requirements (e.g.,SEC and FINRA rules).  So senior people need to also be aware that, if they’re communicating about cover topics outside of the usual channels, they need to take additional steps to make sure that those are properly archived.

These issues are only emerging now and it’s probably only going to get “worse”!  In my view, the issues are going to be more complex in the future with more apps, more platforms, more devices and more opportunities for “end runs” around the traditional IT department.

In the case Nuvasive v. Madsen Medical, the Court recently vacated an adverse inference instruction sanction previously applied against the plaintiff because of the amendment to Rule 37(e).  Do you see that as a trend for other cases and do you expect that other parties that have been sanctioned will file motions to have their sanctions re-considered?

There are some subtle provisions as to when courts will or will not apply the new rules to existing cases.  But, beyond that, I have been watching with great interest the number of decisions that have been handed down that are applying the new provisions of Rule 37, and doing so in a way that suggests that courts will continue to be quite active in monitoring what is happening in discovery — imposing severe sanctions where appropriate and, when there isn’t the requisite level of intent, applying some sort of curative measures otherwise.  So, I think there may have been a greater level of judicial activity than was anticipated in the immediate period since December 1 when the rules changed.  It seems clear to most observers in the space that we’re going to have dozens and dozens of decisions in 2016 that apply the new rules, and we will get to see the patterns emerging pretty quickly.

What are you working on that you’d like our readers to know about?

I think the exciting work of the Information Governance Initiative (IGI) continues to push smart conversations in the space about how corporations can get a handle on their data.  We had a very successful IGI summit, known as the Chief Information Governance Officers (CIGO) summit, in Chicago last year.  We’re going to have the second CIGO summit in May of this year again in Chicago and we’re looking forward to that.  We also have any number of activities that we’re planning to do in terms of retreats, dinners and boot camps, etc. I think IG is still an emerging discipline that should be of great interest to many corporate actors who don’t have a good handle on their existing workflows, policies and programs about data – whether it’s data breach or data reduction or data archiving or data analytics.  I feel very privileged to be part of a group of individuals at the IGI that are really doing some serious thinking about these types of topics.

I must say I was surprised by Monica Bay at LegalTech, who pulled me in at the last moment to be a judge at the second “Shark Tank” session held there —  where I felt a little like being on “America’s Got Talent” as one of three judges in the room looking at the individual entrepreneurs who were giving presentations.  But, as the session progressed (and as recorded by David Horrigan, who was tweeting the session in live stream fashion) it seemed very clear to me that maybe it’s time for me to retire!  I say so because of the profusion of disruptive technologies in the space, whether it has to do with smart contracts or dialing up lawyers over the web, it all heavily suggests that all of our current business models are going to be disrupted in due course and maybe very soon!  There are simply a lot of exciting technologies in the space for which the CodeX people are fostering a platform.  In the end I confess to being quite happy that Monica pulled me in, and I would urge your readership to pay attention to what CodeX is doing.  I believe there is a conference coming up (CodeX FutureLaw 2016) on May 20, which is focusing on how technology is changing the landscape of the legal profession and the impact of those changes.

Thanks, Jason, for participating in the interview!

And to the readers, as always, please share any comments you might have or if you’d like to know more about a particular topic!

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Our Nation’s Largest City is Not Immune to eDiscovery Sanctions: eDiscovery Case Law

In Stinson v. City of New York, 10 Civ. 4228 (RWS) (S.D.N.Y. Jan. 2, 2016), New York District Judge Robert W. Sweet granted in part and denied in part the plaintiffs’ motion seeking sanctions for spoliation of evidence against the defendants for failure to issue a litigation hold, opting for a permissive inference rather than a mandatory adverse inference sanction against the defendants.

Case Background

In this civil rights class action against the City of New York, it was determined that the City did not issue any litigation hold until August 8, 2013, more than three years after the filing of the Complaint in this case and the litigation hold was not effectively communicated, and none of the officers who were named in the City’s initial disclosures acknowledged receiving it.

At the time of the litigation hold, the document destruction processes at the NYPD were governed by Operations Order 44, which specified the length of time the Department would be required to retain various categories of documents.  Order 44 authorized the destruction of most bureau chief memos after three years, police officers’ monthly performance reports after four years, and criminal court summonses after four years.  With regard to emails, the City’s 30(b)(6) witness stated that “although the NYPD did not have a specific policy with regards to the destruction of email communications, it did impose a hard size limit on officers’ inboxes, and that when officers hit that limit, ‘they delete.’”  The City also did not dispute that it had not made any effort to preserve or produce text messages between NYPD officers.

With regard to the defendants’ production, the Court noted that they produced fewer than 25 emails from key players, with no emails produced from the former Commissioner, the former Chief of the department, and three other key custodians. The defendants explained the lack of email production by contending that the “Police Department on the whole did not operate via email”, but that contention was countered by email communications with the city that the plaintiffs acquired from third parties.

Judge’s Ruling

Citing Chin v. Port Authority of New York and New Jersey, Judge Sweet stated that:

“In order to merit an adverse inference, the party seeking sanctions must establish 1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed, 2) that the records were destroyed with a culpable state of mind, and 3) that the destroyed evidence was relevant to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.”

  • With regard to the defendants’ obligation, Judge Sweet rejected the defendants’ argument that the plaintiffs’ preservation requests were overbroad, stating “Plaintiffs’ putative overbroad demands do not excuse the City’s failure to issue a litigation hold, to properly supervise its implementation, or to suspend document retention policies that would foreseeably lead to the spoliation of evidence.”
  • With regard to the defendants’ culpable state of mind, Judge Sweet stated that “the City’s conduct shows a broad failure to take its preservation obligations seriously rather than any deliberate attempt to lie or mislead”, but noted that the “City’s conduct does, however, support a finding of gross negligence”.
  • With regard to the relevance of the destroyed documents, Judge Sweet determined that the “evidence adduced thus far indicates that at least some of the destroyed documents will be relevant to the Plaintiffs’ claims”, though he did note that the showing of relevance by the plaintiffs was “relatively limited”.

As sanctions for the defendants’ spoliation, the plaintiffs requested a set of sixteen adverse inferences touching on almost every aspect of their case, but Judge Sweet opted for a lesser level of sanctions, stating:

“Given the City’s lack of bad faith in its spoliation of evidence and the relatively limited showing of relevance made by the Plaintiffs, a permissive, rather than a mandatory adverse inference is warranted…A permissive inference will ensure that the City faces consequences for its failure to take its preservation obligations seriously, but will not result in an unwarranted windfall for the Plaintiffs. The jury will be instructed that the absence of documentary evidence does not in this case establish the absence of a summons quota policy.”

So, what do you think?  Was that a sufficient sanction for the defendants’ “gross negligence” in failing to issue a litigation hold?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

George Socha of Socha Consulting LLC: eDiscovery Trends

This is the second of the 2016 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscovery Daily interviewed several thought leaders at LTNY this year to get their observations regarding trends at the show and generally within the eDiscovery industry.  Unlike previous years, some of the questions posed to each thought leader were tailored to their position in the industry, so we have dispensed with the standard questions we normally ask all thought leaders.

Today’s thought leader is George Socha.  A litigator for 16 years, George is President of Socha Consulting LLC, offering services as an electronic discovery expert witness, special master and advisor to corporations, law firms and their clients, and legal vertical market software and service providers in the areas of electronic discovery and automated litigation support. George has also been co-author of the leading survey on the electronic discovery market, The Socha-Gelbmann Electronic Discovery Survey; in 2011, he and Tom Gelbmann converted the Survey into Apersee, an online system for selecting eDiscovery providers and their offerings.  In 2005, he and Tom Gelbmann launched the Electronic Discovery Reference Model project to establish standards within the eDiscovery industry – today, the EDRM model has become a standard in the industry for the eDiscovery life cycle and there are nine active projects with over 300 members from 81 participating organizations.  George has a J.D. for Cornell Law School and a B.A. from the University of Wisconsin – Madison.

What are your general observations about LTNY this year and about emerging eDiscovery trends overall?

{Interviewed the first morning of LTNY, so the focus of the question to George was more about his expectations for the show and also about general industry trends}.

This is the largest legal technology trade show of the year so it’s going to be a “who’s who” of people in the hallways.  It will be an opportunity for service and software providers to roll out their new “fill in the blank”.  It will be great to catch up with folks that I only get to see once a year as well as folks that I get to see a lot more than that.  And, yet again, I don’t expect any dramatic revelations on the exhibit floor or in any of the sessions.

We continue to hear two recurring themes:  the market is consolidating and eDiscovery has become a commodity. I still don’t see either of these actually happening.  Consolidation would be if some providers were acquiring others and no new providers were coming along to fill in the gaps, or if a small number of providers was taking over a huge share of the market.  Instead, as quickly as one provider acquires another, two, three or more new providers pop up and often with new ideas they hope will gain traction.  In terms of dominating the market, there has been some consolidation on the software side but as to services provider the market continues to look more like law firms than like accounting firms.

In terms of commoditization, I think we still have a market where people want to pay “K-mart, off the rack” prices for “Bespoke” suits.  That reflects continued intense downward pressure on prices.  It does not suggest, however, that the e-discovery market has begun to approximate, for example, the markets for corn, oil or generic goods.  E-discovery services and software are not yet fungible – with little meaningful difference between them other than price.  I have heard no discussion of “e-discovery futures.”  And providers and consumers alike still seem to think that brand, levels of project management, and variations in depth and breadth of offerings matter considerably.

Given that analytics happens at various places throughout the eDiscovery life cycle, is it time to consider tweaking the EDRM model to reflect a broader scope of analysis?

The question always is, “what should the tweak look like?”  The questions I ask in return are “What’s there that should not be there?”, “What should be there that is not?” and “What should be re-arranged?”  One common category of suggested tweaks are the ones meant to change the EDRM model to look more like one particular person’s or organization’s workflow.  This keeps coming up even though the model was never meant to be a workflow – it is a conceptual framework to help break one unitary item into a set of more discrete components that you can examine in comparison to each other and also in isolation.

A second set of tweaks focuses on adding more boxes to the diagram.  Why, we get asked, don’t we have a box called Early Case Assessment, and another called Legal Hold, and another called Predictive Coding, and so on. With activities like analytics, you can take the entire EDRM diagram and drop it inside any one of those boxes or in that circle.  Those concepts already are present in the current diagram.  If, for example, you took the entire EDRM diagram and dropped it inside the Identification box, you could call that Early Case Assessment or Early Data Assessment.  There was discussion early on about whether there should be a box for “Search”, but Search is really an Analysis function – there’s a home for it there.

A third set of suggested tweaks centers on eliminating elements from the diagram.  Some have proposed that we combine the processing and review boxes into a single box – but the rationale they offer is that because they offer both those capabilities there no longer is a need to show separate boxes for the separate functions.

What are you working on that you’d like our readers to know about?

First, we would like to invite current and prospective members to join us on April 18 for our Spring meeting which will be at the ACEDS conference this year.  The conference is from April 18 through April 20, with the educational portion of the conference slated for the 19th and 20th.

For several years at the conference, ACEDS has given out awards honoring eDiscovery professionals.  To congratulate this year’s winners we will be giving them one-year individual EDRM memberships.

On the project side, one of the undertakings we are working on is “SEAT-1,” a follow up to our eMSAT-1 (eDiscovery Maturity Self-Assessment Test).  SEAT-1 will be a self-assessment test specifically for litigation groups and law firms.  The test is intended to enable them to better assess where they are at, how they are doing and where they want to be.  We are also working on different ways to deliver our budget calculators.  It’s too early to provide details on that, but we’re hoping to be able to provide more information soon.

Finally, in the past year we have begun to develop and deliver member-only resources. We published a data set for members only and we put a new section of EDRM site with information about the changes to the Federal rules, including a comprehensive collection of information about the changes to the rules.  This year, we will be working on additional resources to be available to just our members.

Thanks, George, for participating in the interview!

And to the readers, as always, please share any comments you might have or if you’d like to know more about a particular topic!

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.