Our Biglaw friends at Fulbright & Jaworski have released their 4th annual Litigation Trends Survey (available here) which on its own is something of an interesting read. The more interesting tidbits relate, of course, to the respondents' views on E-Discovery.
According to the report, an incredible 70% of the respondents indicated that "...e-discovery as the subjects of motions, hearings or rulings in the past year remain a rare or nonexistent event...". This apparently was no change from 2006 when the issue was first raised in the survey. Two recent cases, one federal and one in Texas state court, may reveal in part why this is the case. In the former, litigation related to a bankruptcy case, opposing counsel kind of, sort of, sought to obtain ESI as part of its document request. Those who shall remain nameless fumbled around with the electronic part of the definition of a document like a freshman frat boy fumbling with a girdle. Pseudo co-counsel, a far better lawyer than myself, waited until two days before the production deadline to find out what she may, or may not, have to produce, and in what form.
The latter case involved some post-judgment discovery shenanigans in state court. One of the increasingly popular theories in Texas, for a number of reasons, is that of alter ego (it's not just for breakfast anymore). It stands to reason that the discovery related to alter ego would necessarily give opposing counsel pause to at least consider seeking electronically stored information. Especially given that the Texas Rules of Civil Procedure have made provisions for the discovery of "electronic or magnetic data" since at least 1999.
E-Discovery vendors must be rejoicing, and planning on a Merry Christmas indeed, as the survey also reflects that third party vendors are being utilized by 51% of respondents, as opposed to 37% of respondents in 2006. Law firms seem to be content playing second fiddle to the vendors, as only 30% of the firms surveyed reported having special technical expertise, an increase over the 26% so reporting last year. One additional tidbit, is that significantly more companies have retained, or considered retaining, either national or regional counsel to handle specific e-discovery issues.
As for the use of third party vendors, the obvious concerns include the cost of such services and the protection of attorney-client privilege. But there are less obvious concerns, that potential customers and their attorneys, ought to be aware of. At the outset, the only meaningful way to take part in the process is for the end-user to understand what it is they are getting for their buck, and having realistic expectations about the outcome. I recently read an article, perhaps one of Craig Ball's, indicating that current approaches to term search may be only 80% effective. Given that the survey keys in on suits involving $20 million or more, 80% is more akin to the adage about horseshoes and hand grenades.
Even more important than the client understanding what the vendor is doing, is the vendor understanding what the vendor is doing. There is concern that a sub-group of e-discovery experts in the industry are really only experts at picking out software packages with all the pretty lights. There are a growing number of published opinions that make passing reference to "established protocols" among "computer experts". Just because I can light and smoke a cigar does not make me an expert in cigars. If I tried to roll a cigar by hand, all I would have at the end of the day would be a handful of mashed up leaves and a serious nicotine overdose. I have written an article (soon to be published in an ABA newsletter) regarding the application of Daubert to e-discovery experts. There appears to be a growing trend of courts expecting the "computer experts" to know what it is they are rolling, and how it is getting rolled.
The survey results also give an interesting look into the level of risk corporations are willing to take on in order to allow their worker bees to use technology. For instance, 72% responded that they allow employees to access company networks from home. 54% have the luxury that even I don't, the use of instant messaging. Interestingly, only 24% allow employees to attach documents to IM's. 48% allow the use of "outside email accounts" from company computers. 40% retain their voice mails, and an equal number utilize technology allowing voicemail to be emailed to others. For all the blather being published in blawgs and newsletters alike, for all the headlines and the lawsuits by the states' Attornies General, only 40% of the companies responding have a Chief Privacy Officer.
Although it would have been nice to see more data on retention periods, the survey also reflects that the median retention period is 60 days. The industry pack-rats, those tending to keep data more than a year, are real estate and technology/communications.
Respondents also reported some interesting numbers related to the costs of privilege review. 30% indicated that their privilege review costs only consumed 6-10 percent of litigation costs. 16% of the respondents reported, however, that privilege review ate up 30-50 percent of litigation expense. That line-up includes, in descending order, technology/communications, energy, health care, and financial services.
At the end of the day, 27% of the US respondents indicated that the 2006 FRCP Amendments actually made it more difficult to them to address ESI obligations in federal litigation. 60% indicate the amendments had little effect.
Bankruptcy counsel would be well-advised to take a look at the Fulbright & Jaworski survey findings. Even though the subject matter is litigation, the survey also approaches the issues as a function of the business of its clients. Sounds a little like what Chapter 11 lawyers are increasingly called upon to do...