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Electronic Discovery

Must Losing Plaintiff Pay Defendant $2.8 Million for Predictive Coding of One Million Documents? Court Says Yes – eDiscovery Case Law

In Gabriel Technologies Corp. v. Qualcomm Inc., (Dist. Court, SD Cal., February, 1 2013), District Judge Anthony J. Battaglia awarded the defendant over $12.4 million in attorneys’ fees to be paid by the losing plaintiff in the case.  The amount included over $2.8 million for “computer-assisted, algorithm-driven document review” and nearly $392,000 for contract attorneys to review documents identified by the algorithm as responsive.

Defendants filed motions for summary judgment in this four year patent and breach of contract case in September 2011 and August 2012 and ultimately successfully obtained judgment in their favor for all of the plaintiff’s claims (pending appeal).  Then, on October 12, 2012, the defendants filed a motion for recovery of attorneys’ fees in the case – to the tune of $13.4 million.

One key component of the request for fees in the October 2012 motion was the request to recover fees of $2,829,349.10 “for document review performed by complex computer algorithm generated by San Francisco-based H5”.  As noted in the motion:

“Over the course of this litigation, Defendants collected almost 12,000,000 records—most in the form of Electronically Stored Information (ESI)…Rather than review this entire volume, the parties negotiated and agreed to a set of search terms early in this litigation to cull irrelevant documents from the review population. Defendants applied those terms across all the ESI Defendants collected for this case. Rather than manually reviewing the huge volume of resultant records, Defendants paid H5 to employ its proprietary technology to sort these records into responsive and non-responsive documents…The H5 algorithm made initial responsiveness determinations for more than one million documents.”

Based on the above citation, it seems evident that the H5 algorithm was used only after keyword search terms reduced the set to more than one million documents, not on the original 12 million documents.  And, the fees for applying the algorithm to those one million documents were over $2.8 million, or roughly in the range of $2.80 per document.  Interesting…

The motion also requested recovery of $391,928.91 in fees assessed by Black Letter for human review of the resulting identified responsive documents, noted as follows: “Black Letter Discovery’s attorneys reviewed those documents already deemed responsive by the H5 algorithm and checked them for confidentiality, privilege, and relevance.”

In his ruling, Judge Battaglia noted with regard to the fees for the algorithm and for human review:

“For this reason, the review performed by H5 and Black Letter accomplished different objectives with the H5 electronic process minimizing the overall work for Black Letter. Again, the Court finds Cooley’s decision to undertake a more efficient and less time-consuming method of document review to be reasonable under the circumstances. In this case, the nature of Plaintiffs’ claims resulted in significant discovery and document production, and Cooley seemingly reduced the overall fees and attorney hours required by performing electronic document review at the outset. Thus, the Court finds the requested amount of $2,829,349.10 to be reasonable.”

As a result, Judge Battaglia awarded the fees for both the algorithm and for human review as part of an overall award of $12,401,014.51 (about $1 million less than the total requested).  Plaintiff’s local counsel was also ordered to pay $64,316.50 to the defendants as part of the judgment.

So, what do you think?  Does that appear to be a reasonable cost for predictive coding of one million documents?  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 Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

George Socha of Socha Consulting LLC – eDiscovery Trends

This is the seventh of the 2013 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscoveryDaily interviewed several thought leaders at LTNY this year and generally asked each of them the following questions:

  1. What are your general observations about LTNY this year and how it fits into emerging trends?
  2. If last year’s “next big thing” was the emergence of predictive coding, what do you feel is this year’s “next big thing”?
  3. What are you working on that you’d like our readers to know about?

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 how it fits into emerging trends?

First of all, this year’s show has a livelier feel to it after a few years where it was feeling a bit flat, no doubt probably due to the economy.  The show has more “spark” to it, which is good not just for this conference but also for the industry and where it’s at and where it’s going.

As for the curriculum, if last year was the year of TAR/CAR/Predictive Coding, so was this year.  It’s also the year of “big data” – whatever “big data” means – and it may or may not be the year of information governance – whatever that means. I think a lot of what we see continues to focus on the same underlining set of issues, that providers are being ever more creative with the packages of the services, software and the capabilities they are offering.  They are trying to figure out how to get those offerings in front of the consuming audience with a compelling story addressing the question of why should you go the extra step and use what they have to offer instead of doing things as you always have done them.  Predictive coding is still more discussion than action, but it is interesting to hear the different opinions.  I moderated a panel with two trial lawyers who are head of their eDiscovery practice groups, who talked about the processes they now go through with clients where discussing predictive coding, to determine whether it’s appropriate for a given case.  The two attorneys were discussing the benefits of CAR, the drawbacks, how much extra it is likely to cost, how much it is likely to save and whether it is likely to even save anything.  This is a discussion that didn’t happen much a year ago and hardly at all two years ago.  To place this in context, however, I have worked with one corporation that has been doing what we now call Computer Assisted Review since 2003 to my direct knowledge and, I am told, since 2000.  CAR is not new in terms of techniques, rather it is new in terms of its packaging and presentation and “productization”.

If last year’s “next big thing” was the emergence of predictive coding, what do you feel is this year’s “next big thing”?

If you look at the eDiscovery industry, what the software providers have been developing and the skills and expertise that the service providers and law firms have been building up over the years, they are amassing a powerful set of capabilities that until now has been focused on one pretty narrow set of issues – eDiscovery. I see people starting to take those tools, techniques and experience and beginning to point them in new directions far beyond just eDiscovery, because most of what we deal with in eDiscovery applies in other areas as well.  For example, I see a turn toward broader information governance issues, such as how you get your electronic house in order so that things like eDiscovery become less of a pain point, and how do you do a better job or figuring out what is and what isn’t a record, and how can you get rid of content you been holding onto for years.  These issues extend beyond eDiscovery.  They include what you do to identify compliance challenges, and monitoring whether you are meeting those challenges in an effective fashion.  You could use the same technologies and approaches to improve how you manage your intellectual property assets, essentially pointing the EDRM framework in a new direction.  I think we are on the brink of what could be an enormous of expansion of uses of these capabilities that have been developed in a niche area for some time now.

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

With regard to EDRM, we are approaching our tenth year.  We are looking to that milestone and asking ourselves what EDRM should be today, what it should be tomorrow, and what can we do to improve what we do and how we do it.  We are going to shift to smaller working groups focused on more targeted projects with a shorter delivery cycle.  You can see the beginnings of that in some of our recently published deliverables.

The Computer Assisted Review Reference Model (CARRM) (our blog post about CARRM here) was our first outcome using this process and the second was the EDRM Talent Task Matrix (our blog post about it here) that we published on Monday.  For now, the Talent Task Matrix consists of a diagram that helps explain the concept as well as an accompanying spreadsheet which is available in Excel format (XLSX) or Adobe Acrobat (PDF) format that anyone can download.  We are looking for comments and feedback on the matrix and anticipate that it will fill a need and a gap that are not otherwise being addressed.

With regard to Apersee, providers continue to add information about themselves and we continue to add features.  In the past year, we replaced the search engine with a faceted search mechanism that is simpler to use.  We added an Event Calendar with links to Apersee providers. We added in a Press Release section which works in much the same way.  We’re looking to develop two additional sections which take specific types of content associated with providers and make that available within the application.  The underlining notion is to better help consumers evaluate providers on many dimensions, with an easily followed structure to the content available through the site.

Finally, we added the ability for consumers to submit Special Requests, so that if in looking for a provider and searching through the website they do not find the result they need, they always can submit a special request to us through the click of a button.  We reformulate the message and send it out to about 2,700 people in the provider community.  Unless you choose otherwise, the request is totally anonymous.  Typically, we get back 20 to 40 relevant responses within the first few hours, which usually is more information than the requestor can handle.  The responses from the request system have been very positive.

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 Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Alon Israely, Esq., CISSP of BIA – eDiscovery Trends

This is the sixth of the 2013 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscoveryDaily interviewed several thought leaders at LTNY this year and generally asked each of them the following questions:

  1. What are your general observations about LTNY this year and how it fits into emerging trends?
  2. If last year’s “next big thing” was the emergence of predictive coding, what do you feel is this year’s “next big thing”?
  3. What are you working on that you’d like our readers to know about?

Today’s thought leader is Alon Israely.  Alon is a Manager of Strategic Partnerships at Business Intelligence Associates (BIA) and currently leads the Strategic Partner Program at BIA.  Alon has over seventeen years of experience in a variety of advanced computing-related technologies and has consulted with law firms and their clients on a variety of technology issues, including expert witness services related to computer forensics, digital evidence management and data security.  Alon is an attorney and Certified Information Security Specialist (CISSP).

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

{Interviewed on the second afternoon}  Looking at the show and walking around the exhibit hall, I feel like the show is less chaotic than in the past.  It seems like there are less vendors, though I don’t know that for a fact.  However, the vendors that are here appear to have accomplished quite a bit over the last twelve months to better clarify their messaging, as well as to better fine tune their offerings and the way they present those offerings.  It’s actually more enjoyable for me to walk through the exhibit hall this year – last year felt so chaotic and it was really difficult to differentiate the offerings.  That has been a problem in the legal technology business – no one really knows what the different vendors really do and they all seem to do the same thing.  Because of better messaging, I think this is the first year I started to truly feel that I can differentiate vendor offerings, probably because some of the vendors that entered the industry in the past few years have reached a maturity level.

So, it’s not that I am not seeing new technologies, methods or ways of doing things in eDiscovery; instead, I am seeing better ways of doing things.  As well as vendors simply getting better at their own pitch and messaging.  And, by that, I mean everything involved in the messaging – the booth, the sales reps in the booth, the product being offered, everything.

If last year’s “next big thing” was the emergence of predictive coding, what do you feel is this year’s “next big thing”?

I think this year’s “next big thing” follows the same theme as last year’s “next big thing”, only you’re going to see more mature Technology Assisted Review (TAR) solutions and more mature predictive coding.  It won’t be just that people provide a predictive coding solution; they will also provide a work flow around the solution and a UI around the solution, as well as a method, a process, testing and even certification.  So, what will happen is that the trend will still be technology assisted review and predictive coding and analytics, just that it won’t be so “bleeding edge”.  The key is presentation of data such that it helps attorneys get through the data in a smarter way – not necessarily just culling, but understanding the data that you have and how to get through it faster and more accurately.  I think that the delivery of those approaches through solution providers, software providers and even service providers seems to be more mature and more focused.  Now, there is an actual tangible “thing” that I can touch that shows it is not just a bullet point – “Hey, we do predictive coding!” – instead, there is actually a method in which it is deployed to you, and to your case or your matter.

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

BIA is really redefining eDiscovery with respect to how the corporate customer looks at it.  How does the corporation look at eDiscovery?  They look at it as part of information security and information management and we find that IT departments are very much more involved in the decision making process.  Having information security roots, BIA is leveraging our preservation technology and bringing in an eDiscovery tool kit and platform that a company can use that will get them where they need to be with respect to compliance, defensibility and efficiency.  We also have the only license model for eDiscovery in the business with respect to the kind of corporate license model, the per seat model that we offer.  We are saying “look, we have been doing this for 10 years and we know exactly what we are doing”.  We use cutting edge technology and while other cloud providers have claimed that they are leveraging utility computing, we are not only saying that, we are actually doing it.  If you don’t believe us, check it out and bring your best technology people and they will see we are telling the truth on that.  We are leveraging our technology for what happens from the corporate perspective.

We are not a review tool and you cannot produce documents out of our software, but that is why clients have software products like OnDemand®; with it, they can do all the different types of review they want and batch it out and use 100 reviewers or 10 reviewers or whatever.  BIA supports the corporations who care about legal hold and preservation and collections and insuring that they are not sending millions of gigs over for costly review.  We support from the corporate perspective, whether you want to call it on the left side of the EDRM model or not, what the GC needs.  GCs want to make sure that they have not deleted some piece of data that will be needed in court.  Notifying clients of that requirement, taking a “snap shot” of that data, locking it down, collecting that data and then insuring that our clients are following the right work flow is basically what we bring to the table.  We have also automated about 80% of the manual tasks with TotalDiscovery, which makes the GC happy and brings that protection to the organization at the right price.  Between TotalDiscovery and a review application like OnDemand, you don’t need anything else.  You don’t need twenty applications for a full solution – two applications are all you need.

Thanks, Alon, 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 Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Laura Zubulake, Author of “Zubulake's e-Discovery” – eDiscovery Trends

This is the fifth of the 2013 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscoveryDaily interviewed several thought leaders at LTNY this year and generally asked each of them the following questions:

  1. What are your general observations about LTNY this year and how it fits into emerging trends?
  2. If last year’s “next big thing” was the emergence of predictive coding, what do you feel is this year’s “next big thing”?
  3. What are you working on that you’d like our readers to know about?

Today’s thought leader is Laura Zubulake.  Laura worked on Wall Street for 20 years in institutional equity departments and, in 1991, authored the book The Complete Guide to Convertible Securities Worldwide. She was the plaintiff in the Zubulake vs. UBS Warburg case, which resulted in several landmark opinions related to eDiscovery and counsel’s obligations for the preservation of electronically stored information. The December 2006 amendments to the Federal Rules of Civil Procedure were influenced, in part, by the Zubulake case. Last year, Laura published a book titled Zubulake’s e-Discovery: The Untold Story of my Quest for Justice, previously discussed on this blog here and she speaks professionally about eDiscovery topics and her experiences related to the case.

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

{Interviewed the second day of the show}  The crowd is similar in size to last year’s conference.  As always, there is that buzz of activity. There is a diversity of speakers and panels.  The Judge’s panels should be informative as usual,  Ted Olsen’s keynote was an interesting and different introduction to the conference.  I’m also looking forward to the Thursday Closing Plenary Address on cyber security by Mary Galligan from the FBI.  As far as trends are concerned, based on the agenda it is clear that information governance is becoming more of an important topic.  Cyber security is also more of a focus.    Next year, I think cyber security, information governance, and big data will continue to be trends.  I think that by next year, predictive coding will be less of a hot topic.

Speaking of predictive coding, if last year’s “next big thing” was the emergence of predictive coding, what do you feel is this year’s “next big thing”?

At this point, I think that predictive coding has moved along the learning curve. Personally, I like to use the word algorithms with regard to predictive coding.  For years, algorithms have been used in government, law enforcement, and Wall Street.  It is not a new concept.  I think there will be an increasing acceptance of using them.  A key to acceptance will be to get cases where both parties agree to use algorithms voluntarily (instead of being forced to use them) and both sides are comfortable with the results.

As for the next big thing, as I said earlier,  there will probably be increased attention on information governance.  As the eDiscovery industry matures, information governance will become more of a focus for corporations.  They will realize that, while they have legal obligations (with regard to electronic information), they also need to proactively manage that information. This will not only mitigate costs and risk but also leverage that information for business purposes.  So far, I have found the panel discussions regarding information governance to be most interesting.

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

My goal this past year was to publish my book.  Reviews have been  good and I’m very thankful for that – especially given that I worked on it for several years.  The feedback has been rewarding in two aspects.  First, those in the eDiscovery industry are appreciating the book, because they are getting the background story to the making of the precedents.  Second, and even more rewarding to me personally, are reactions from readers who are not in the in the industry and not familiar with eDiscovery.  They appreciate the human-interest side of the story.  There are two stories in the book.  The broader audience finds the legal story interesting, but finds the human-interest story compelling.  I am also encouraged that readers are recognizing my story is really more about information governance than eDiscovery.  It was my understanding of the value of information and desire to search for it that resulted in the eDiscovery opinions.  As I state in my book, Zubulake I was the most important opinion because it gave me the opportunity to search for information.

Going forward, I will continue to market the book, plan events to market it and work towards getting more reviews in what I would call the broader media, not just in eDiscovery or legal media outlets.  Another one of my goals for this year and next year is to get back into the workforce in the area of information governance.  I think my Wall Street background and eDiscovery experiences are a perfect combination for information governance.  I also hope to use my book as a platform for my job search.

Thanks, Laura, 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 Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

10 Tips for LegalTech Vendors – eDiscovery Best Practices

We’ve mentioned Ralph Losey from Jackson Lewis several times on this blog, including last year’s thought leader interview at LegalTech New York and our interview with him again this year, which will be published on March 1.  We’re discussing another interesting article from Losey, but this time it’s Adam Losey.  His article 10 Tips for LegalTech Vendors, that appeared in Law Technology News has some interesting tips that all vendors (especially those exhibiting at trade shows) should bear in mind.  Here are his tips, along with some of my comments:

  1. Hand over the mouse. As Losey notes, “If you get time in front of potential clients to demonstrate a product, give them the mouse. Let attendees try your tools, with you serving as their guide.”  That sounds great in theory.  It has been my experience, however, that most attendees that stop by and request a demo are reluctant to “drive” right there at the show (believe me, I’ve offered).  Giving them the ability to “test drive” the product for free in their offices after the show tends to get a better response, in my experience.
  2. Add value. Losey advocates more “than just delivering high-quality work product and hyper-responsive client service”.  There are plenty of ways to do this.  For example, helping a client out by directing them to the right vendor that provides a service that you don’t can be just as helpful as the services that you provide for them.
  3. Be humble and keep innovating.  Especially in the ever-changing eDiscovery industry, it’s important to continue to adapt.  That doesn’t just mean offering the latest “buzzword” technology, it also means providing a mechanism for clients to request features and enhancements and addressing those within rollout updates.
  4. Don’t bad-mouth the competition.  Needless to say, you should never do that.  If a client or prospect asks you to compare your solution to another, it’s always best to point out what your solution does well, or what it offers that is unique, not what (you think) the competition does poorly.
  5. Share. In essence, Losey reiterates that here: “Show me why you are the best, not why everyone else is the worst.”  This enables eDiscovery practitioners to draw their own conclusions and share their knowledge with colleagues, which carries more weight than if it came from the vendor, who has a vested interest.
  6. Stop pushing unnecessary services.  Doing so may net a little more business in the short run, but can cost long-term business when the client becomes more educated and realizes that those costs are unnecessary and dumps you.  It’s better to be flexible enough to provide just the services the client needs – they will appreciate it and want to do business with you again.
  7. Leave the legal work to the lawyers.  The vendor’s responsibility is to provide the attorney information regarding the handling of ESI necessary to make an informed decision, not to make that decision for the attorney.
  8. Reach out to new lawyers.  Great point!  As Losey notes, new lawyers are the ones handling eDiscovery at most firms, so reaching out to them as law students is a great way to establish a foothold.
  9. Let me export a privilege log with a click.  I would extend this to production logs, exception logs, etc.  It should be a no-brainer to select the documents you want, the fields you want on the report, click a button and export to Excel.
  10. Let me kick the tires on a case for free.  Clients always understand an application better when working with their own data, as opposed to a demo database.  That’s why (shameless plug warning!) CloudNine offers a 100% No-Risk Trial Offer on OnDemand®, so that our clients can try it with their own data (even as much as 100 GB or more), at no risk.  What better way to get them to try your product?

So, what do you think?  How do your vendors stack up?  Please share any comments you might have or if you’d like to know more about a particular topic.

P.S. — Happy 84th Birthday, Dad!

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Don Philbin of Picture It Settled – eDiscovery Trends

This is the fourth of the 2013 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscoveryDaily interviewed several thought leaders at LTNY this year and generally asked each of them the following questions:

  1. What are your general observations about LTNY this year and how it fits into emerging trends?
  2. If last year’s “next big thing” was the emergence of predictive coding, what do you feel is this year’s “next big thing”?
  3. What are you working on that you’d like our readers to know about?

Today’s thought leader is Don Philbin.  Don is a nationally recognized attorney-mediator and is President and founder of Picture It Settled®, a predictive analytics tool for negotiation.  Holding both a law degree and an MBA, Don mediates individual and class matters, and he teaches courses at Pepperdine Law’s Straus Institute for Dispute Resolution.  He was one of three Texas mediators listed in the 2011 inaugural edition of The International Who’s Who of Commercial Mediation, and he was named the 2011 Outstanding Lawyer in Mediation by the San Antonio Business Journal.   He is an elected fellow of the International Academy of Mediators and the American Academy of Civil Trial Mediators.

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

This is my first LegalTech and I was kind of “bug eyed” about it.  It’s a big show.  Everyone that I’ve talked to tells me this year’s show is bigger than it has been in four years and I rode in the elevator with some of the ALM execs this morning and they were happy to see the increased attendance.  As for some of the highlights of the show so far, I went to yesterday’s keynote and enjoyed hearing Ted Olsen’s speech – he is always interesting.  I also went to a couple of eDiscovery forums that were mainly focused on housing the data and security concerns for the data.  I did walk through the exhibit hall to check out the variety of vendors and clearly most of them appear to be eDiscovery related, though there were some telecom and conferencing vendors.

If last year’s “next big thing” was the emergence of predictive coding, what do you feel is this year’s “next big thing”?

I may not the best one to ask about that since I am not a vendor, but it looks to me like the “next big thing” would be adoption of the predictive coding technology at this point.  It seems as though the court opinions that have come through have validated the technology as acceptable.  A survey on Twitter at one of the sessions found that 48% of respondents have been involved in predictive coding or technology assisted review in the last year and one of the commentators at the session said “this is the bubble”.  So, it seems as though the development for the next year is how far it gets outside “the bubble” in terms of adoption.

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

We’re here to let people know about Picture It Settled, which is a predictive analytics tool in its own right – for the settlement negotiation process.  To support this process, we have collected data for about ten thousand cases – not just the outcomes, but also the incremental moves that people make in negotiation.  Some cases have as few as two or three rounds while others have many more – one case has at least fifty four pain staking rounds of negotiation.  We measure two dimensions of data: the dollar concession for each offer (i.e., the dollar amount each negotiating party moves from one offer to the next) and the elapsed time between the offers.  We know the right number at the wrong time is the wrong number.  People have to get used to the deal and need ample time to ensure that they are getting everything they possibly can from the other side.  Also, negotiations always expand to fit the space available.  Whether it’s deal making in Washington regarding the fiscal cliff, or settlement negotiations for a case, negotiating parties tend to go “right up to the buzzer” to make the deal.

We find that an all-day negotiation will typically take all day, so the question is “how do you pace yourself so that you can get the best deal?”  We have reverse engineered “splines” that separate the settled cases from the cases that ended in impasse. From that, we studied how successful negotiators “let out the string” in a way that kept their opponent engaged and cooperative instead of going competitive and “slamming their briefcase.” So we have developed a planning curve from the successful negotiations that can be applied to the current round.

Also, cases vary in value depending on the venue where they are filed and also by claim type.  For example, people negotiate personal injury cases differently than construction cases.  We collect the demographic data, ask whether there is insurance and the financial size of the negotiating parties.  Each of us have different risk preferences and tolerances. The scenario planning piece enables the lawyers to do a “high/medium/low/zero” assessment of the case, estimating their best case, worst case and in-between scenario. By attaching probabilities to those assessments, scenarios start to develop.  They use that tool to frame a valuation for the case.

Assuming you are going to negotiate the case and, for example, that the weighted average of the scenarios are $1.6 million, the software will plot the curve and suggest to you what you might consider in terms of offers to get from the best case scenario of perhaps $4 million if you are the plaintiff down to $1.9 million or whatever you assess to be your best alternative to a negotiated deal.  The inputs are lawyer driven, requiring their expertise.  So, this is certainly not removing the lawyers from the negotiation process; instead, it is just giving them a “scope on their gun” to “improve their aim” in negotiations.

The third component of the application is the most powerful. Based on early offers, the Settlement Prophet™ will make forecasts resembling “hurricane” projections, which take the data points on each side and project those out as many as fifth rounds to get a sense of where the opposing party might be headed. The darkest intersect point of the hurricane-type cones is the best estimate of where negotiations are headed. Armed with such data, a user can make mid-course corrections.  It is truly a data driven approach to improving your shot in negotiations.

{Editor’s Note: Don provided a demo for me of the software at the show so the comments above reflect that.  For more information about Picture It Settled and to request your own demo, click here.}

Thanks, Don, 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 Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Tom Gelbmann of Gelbmann & Associates, LLC – eDiscovery Trends

This is the third of the 2013 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscoveryDaily interviewed several thought leaders at LTNY this year and generally asked each of them the following questions:

  1. What are your general observations about LTNY this year and how it fits into emerging trends?
  2. If last year’s “next big thing” was the emergence of predictive coding, what do you feel is this year’s “next big thing”?
  3. What are you working on that you’d like our readers to know about?

Today’s thought leader is Tom Gelbmann. Tom is Principal of Gelbmann & Associates, LLC.  Since 1993, Gelbmann & Associates, LLC has advised law firms and Corporate Law Departments to realize the full benefit of their investments in Information Technology.  Tom has also been co-author of the leading survey on the electronic discovery market, The Socha-Gelbmann Electronic Discovery Survey; in 2011 he and George Socha converted the Survey into Apersee, an online system for selecting eDiscovery providers and their offerings.  In 2005, he and George Socha 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.

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

{Interviewed the first morning of LegalTech}  The most notable trend I have seen to lead up to LegalTech is the rush to jump on the computer assisted review bandwagon.  There are several sessions here at the show related to computer assisted review.  In addition, many in the industry seem to have a tool now some are promoting it as an “easy” button.  There is no “easy” button and, if I can mention a plug for EDRM, that’s one of the things the Search group was concerned with, so the group published the Computer Assisted Review Reference Model (CARRM) (our blog post about CARRM here).

To help people understand what computer assisted review is all about: it’s great technology and, if well used, it can really deliver great results, save time and save money, but it has to be understood it’s a tool.  It’s not a substitute for a process.  The good news is the technology is helping and, as I have been seeing for years, the more technology is intelligently used, the more you can start to bend the cost curve down for electronic discovery.  So, what I think it has started to do and will continue to do is level off those costs on the right hand side of the model.

If last year’s “next big thing” was the emergence of predictive coding, what do you feel is this year’s “next big thing”?

I think one of the “next big things” which has already started is the whole left side of the model which I would characterize as information governance.  Information governance is on the rise and a lot of people in the industry believe that information governance today might be where electronic discovery was in about 2005 or 2006.  We need a lot of understanding, standards and education on effective approaches to information governance because that’s really where the problems are.  There are significant expenditures by organizations trying to work with too much data and not being able to find their data.  Associated with that, will be technology that will help and I also anticipate a significant increase in consulting services to help organizations develop effective policies and procedures.  The consulting organizations that can get it right and communicate it effectively will be able to capitalize on this aspect of the market.  Related to that, from a preservation standpoint, we have been seeing more software tools to help with litigation hold as more organizations get serious about preservation.

Another big trend is education.  EDRM is involved with the programs at Bryan University and the University of Florida (Bill Hamilton deserves a lot of credit for what is happening there).  I think you are going to see that continue to expand as more universities and educational facilities will be providing quality programs in the area of electronic discovery and perhaps information governance along the way.

The last trend I want to mention is a greater focus on marketing.  From a provider’s standpoint, it seems that there has been a flood of announcements about organizations that have hired a new marketing director, either overall for a specific region (west coast, east coast, South America, etc.).  Marketing is really expanding in the community, so it seems that providers are realizing they really have to intelligently go after business.  I don’t believe we saw that level of activity even two or three years ago.

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

With regard to EDRM, we had a very productive mid-year meeting where we asked our participants to help us plan for the future of EDRM.  As a result, we came up with several changes we are immediately implementing. One change is that projects are going to be much smaller and shorter duration with as few as one to five people working on a particular item to get it done and get it out to the community more quickly for feedback.  One example of that which we discussed above is CARRM.  We just announced another project yesterday which was the Talent Task Matrix (our blog post about it here).  We already have 91 downloads of the diagram and 87 downloads of the spreadsheet in less than a day. The matrix was very good work done by a very small group of EDRM folks.  We also dropped the prices for EDRM participation and there are also going to be additional changes in terms of sponsorships and advertising, so we are changing as we are gearing up for our 10th year.

Also, we’re very excited about the additions we have made to Apersee in the last six months.  One addition is the calendar which we believe is the most comprehensive calendar around for eDiscovery events.  If it is happening in the eDiscovery world globally, it’s probably on the Apersee calendar.  For conferences and webinars, the participating organizations will be listed, with a link back to their profile within Apersee.  We are also tracking press releases related to eDiscovery, enabling users to view press releases chronologically and also see the press releases associated within organization to see what they have said about themselves through their press releases.  These are examples of what Apersee is doing to build the comprehensive view of eDiscovery organizations to show what is happening, what they are doing and what services and products they offer.

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 Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Ray Zwiefelhofer of World Software (Worldox) – eDiscovery Trends

This is the second of the 2013 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscoveryDaily interviewed several thought leaders at LTNY this year and generally asked each of them the following questions:

  1. What are your general observations about LTNY this year and how it fits into emerging trends?
  2. If last year’s “next big thing” was the emergence of predictive coding, what do you feel is this year’s “next big thing”?
  3. What are you working on that you’d like our readers to know about?

Today’s thought leader is Ray Zwiefelhofer of World Software (Worldox).  Ray has over twenty years of experience within the technology and legal services market, offering professional, consulting, technology management and product solutions with an emphasis on working with AMLAW 250 & Fortune 500 organizations.  He has founded and served in President/CEO/CIO positions at software startups and as a CTO at a Fortune 500 company.  Prior to joining World Software, Ray was the Founder/CEO of nQueue a global cost recovery company where he patented and spearheaded the change from a hardware-based to software-based cost recovery model. Ray has also worked previously at include the Thomas Kinkade Network, Bowne, Imagineer, Equitrac and Diebold.

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

We felt the show has been terrific.  The traffic has appeared to be of higher quality than normal with many clients wanting a private demo and follow-up. Very typically, a post-review from prior shows included comments of the masses that just swung by to grab a pen or giveaway.  This year’s LegalTech attendees appear to be a more serious decision making audience.  The trends we saw continually popping up during the show included information governance, the cloud and big data.

If last year’s “next big thing” was the emergence of predictive coding, what do you feel is this year’s “next big thing”?

I think the first “next big thing” will be the continued race for mobility and platform flexibility such as cloud computing. Even the largest vendors at the show announced their focus on more cloud computing initiatives. I believe over the coming years, if this trend continues at the pace it has been keeping, there will be less talk about the cloud because prospects will just assume a vendor’s company has a cloud product.  It will be standard, like back when software was ‘network capable.’  Having spent 25 years in this market, I never thought we would see this heavy motivation to move to ‘hosted computing’, but hey, it’s here, so we must embrace it or get left behind!

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

At World Software, we continue to fulfill our vision of anywhere anytime document access, on the platform of our clients’ choice.  I believe long-gone is the day when we as vendors can dictate what the client needs to run our products.  At LegalTech NY, we launched our new GX3 cloud product which completes our suite of offerings, delivering the same technology as our client-server based product (Worldox GX3 Professional,) and our ‘on-premise’ cloud solution (GX3 enterprise) which sits behind the firm’s firewall on their servers. GX3 Cloud is hosted in our data center and is offered for a low monthly fee.

Thanks, Ray, 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 Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Stored Communications Act Limits Production of Google Emails – eDiscovery Case Law

In Optiver Australia Pty. Ltd. & Anor. v. Tibra Trading Pty. Ltd. & Ors. (N.D.Cal., January 23, 2013), California Magistrate Judge Paul S. Grewal granted much of the defendant’s motion to quash subpoena of Google for electronic communications sent or received by certain Gmail accounts allegedly used by employees of the defendant because most of the request violated the terms of the Stored Communications Act.

The plaintiff alleged that several of its former employees copied the plaintiff’s proprietary source code, left the plaintiff company, and used the code to found the defendant in 2006.  After receiving a production from the defendant, the plaintiff “suspected that key emails relating to the allegedly stolen code were previously deleted”; as a result, the Federal Court of Australia ordered further discovery.  The defendant filed an ex parte application for judicial assistance pursuant to 28 U.S.C. § 1782 to serve a subpoena upon Google for documents to be used in the foreign proceeding, which was granted.

The plaintiff submitted two requests to Google, as follows:

  • “Request One: Documents sufficient to identify the recipient(s), sender, subject, date sent, date received, date read, and date deleted of emails, email attachments, or Google Talk messages that contain either of the terms ‘PGP’ or ‘Optiver’ (case insensitive) sent or received between January 1, 2006 and December 31, 2007” for selected email addresses; and
  • “Request Two: Documents sufficient to show the recipient(s), sender, subject, date sent, date received, date read, and date deleted of emails, email attachments, or Google Talk messages sent or received between November 3, 2005 to December 31, 2009 that were sent to or from” selected email addresses.

The defendant moved to quash the subpoena.

Judge Grewal noted that “it is well-established that civil subpoenas, including those issued pursuant to 28 U.S.C. § 1782, are subject to the prohibitions of the Stored Communications Act (‘SCA)”, which was passed in 1986.  The SCA prohibits service providers from knowingly disclosing the contents of a user’s electronic communications.

Judge Grewal ruled that the plaintiff’s “Request One is invalid because it seeks disclosure of the terms ‘Optiver’ and ‘PGP’” and granted the defendant’s motion to quash that request.  As for Request Two, Judge Grewal ruled that it “violates the SCA insofar as it seeks the subject of the communications, but the remainder is permissible.”  Therefore, he ruled that Google was required to provide only the following: “Documents sufficient to show the recipient(s), sender, date sent, date received, date read, and date deleted of emails, email attachments, or Google Talk messages sent or received between November 3, 2005 to December 31, 2009 that were sent to or from the email addresses listed”.

So, what do you think?  Was the correct information excluded due to the SCA?  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 Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Blind Reliance on Vendor for Discovery Results in Sanctions – eDiscovery Case Law

In Peerless Indus., Inc. v. Crimson AV, LLC, No. 1:11-cv-1768 (N.D. Ill. Jan. 8, 2013), Illinois Magistrate Judge Susan E. Cox sanctioned the defendant for a “hands off approach” to discovery by relying on a vendor for conducting the discovery from a closely related non-party to the suit.  The opinion and order can be downloaded here.

The plaintiff sued the defendant and its managing director, Vladimir Gleyzer, in a patent infringement case and filed two motions: 1) a motion to compel the deposition of Tony Jin, and 2) a renewed motion for sanctions.

Motion to Compel Deposition

Jin, the president of China-based Sycamore, was found in a previous ruling to be “principal of both Crimson and Sycamore and that he exercise[d] a considerable amount of financial and managerial control over both companies”, with much of basis for the decision coming from the testimony of Gleyzer himself.  Based on a five-factor test to determine whether Jin was a managing agent, Judge Cox determined that “Mr. Jin appears to satisfy nearly every factor”, granted the plaintiff’s motion to compel the deposition and ordered it to be conducted in the Northern District of Illinois, not in China.

Motion for Sanctions

As for the plaintiff’s renewed motion for sanctions, it was the 30(b)(6) deposition of Gleyzer that made it “clear that defendant did not conduct a reasonable investigation regarding Sycamore’s document production or Sycamore’s document retention for purposes of this litigation.”  Gleyzer “was apparently unable to answer questions about Sycamore’s computer and backup systems, what searches were performed, which employees had relevant information, whether a document hold had been implemented, or whether employees at Sycamore were even contacted regarding plaintiff’s document request.”

So, why was the defendant’s 30(b)(6) deponent unable to answer such basic questions?  As noted in the order, “What is evident from Mr. Gleyzer’s deposition, however, is that defendants took a back seat approach and instead let the process proceed through a vendor.  Mr. Gleyzer testified that there was a process outlined ‘I guess by the vendor’ so the vendor provided instruction to Mr. Jin on how to collect documents.  Crimson, or at least Mr. Gleyzer himself, then had no part in the process of obtaining the requested discovery or of determining how Sycamore managed their documents and what might be relevant to plaintiff’s requests.”

Judge Cox stated: “Such a hands-off approach is insufficient.  Because of the control or ‘close coordination’ between the two companies, defendants were required to produce the requested information.  Defendants cannot place the burden of compliance on an outside vendor and have no knowledge, or claim no control, over the process.”

Sanctions Granted

As a result, Judge Cox granted the motion for sanctions and instructed the plaintiff to “submit a bill of costs for the preparation for the motion of sanctions” by January 31 – which they did, for $16,408.  The defendant has appealed the ruling.

Using vendors for various stages of discovery is common, but that doesn’t excuse the producing party from being fully knowledgeable about the process that took place.  What’s interesting is how the defendant was sunk by its own 30(b)(6) witness, who is also a named party in the suit.  For some best practices regarding preparing your 30(b)(6) witness, click here.

So, what do you think?  Were the sanctions appropriate?  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 Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.