Enterprise Targeted Search - Danger Will Robinson!

I just loved Lost in Space as a kid (it aired 1965 – 1968). The 1998 movie, not so much. There was that robot who always seemed to know when there was danger.  He would roll around waiving his mechanical arms in the air shouting “Danger Will Robinson, danger!” Will Robinson is the young boy. Dr. Smith, pictured with the hammer, the bad guy. This article is me running around waiving my arms in the air warning about the rapidly advancing “behind the firewall” technology around litigation hold, preservation, collection and beyond. Be very careful what you deploy and how you use this technology. Here’s why:

The software providers have finally, I think, figured out what many of us already knew – corporations by and large are not prepared to spend millions of dollars on ESI management software to solve their downstream discovery issues. Rather, why can’t we just leverage the technology we already have, many ask? Most companies have some sort of records management system – Enterprise Vault managing email, SharePoint and other applications are already indexing and managing content. The problem, however, is that those systems are not designed to cull, review, tag and produce. So, what we’ve been doing is pulling information out of those systems, re-indexing and re-organizing downstream in other tools better suited for those functions. Extraction, rendering and indexing content is the most expensive part of the ESI discovery process.

Clearwell Systems, Inc. today announced enhancements to the Clearwell Identification and Collection Module that will bring next generation targeted collection to e-discovery. This technology will leverage existing ESI management technology within the enterprise.

New features in the Clearwell Identification and Collection Module include:

• Keyword Filters: Provides the ability to filter collections by keywords. Administrators have the option to leverage existing source indices to utilize federated search-enabled keyword collections from data sources behind the firewall or in the cloud.

• Extended SharePoint Collections: Allows users to collect the full range of SharePoint document types including blogs, wikis, calendar items, announcements, discussions and surveys, and render them in context.

• Microsoft RMS Environment Support: Automatically interfaces with Microsoft Rights Management Services (RMS) environments to securely decrypt and collect documents on the fly. 

http://www.clearwellsystems.com/ediscovery-news/pr_06_13_11.php

Lawyers have historically not been very good at developing and using key terms.  But, don’t take it from us: 

In William A. Gross Construction Associates Inc. v. American Manufacturers Mutual Ins. Co., No. 07 Civ. 10639 (S.D.N.Y. March 19, 2009), Magistrate Judge Andrew Peck complained:

"This Opinion should serve as a wake-up call to the Bar in this District about the need for careful thought, quality control, testing, and cooperation with opposing counsel in designing search terms or "keywords" to be used to produce emails or other electronically stored information ("ESI"). While this message has appeared in several cases from outside this Circuit, it appears that the message has not reached many members of our Bar.

Electronic discovery requires cooperation between opposing counsel and transparency in all aspects of preservation and production of ESI. Moreover, where counsel are using keyword searches for retrieval of ESI, they at a minimum must carefully craft the appropriate keywords, with input from the ESI's custodians as to the words and abbreviations they use, and the proposed methodology must be quality control tested to assure accuracy in retrieval and elimination of "false positives." It is time that the Bar -- even those lawyers who did not come of age in the computer era -- understand this."

So, now we can simply bounce terms against data inside the enterprise!  A scary thought, I must admit.  What happens when a targeted collection based on key terms is performed and then 6 months down the path new issues arise and new key terms are needed which is going to yield new files?  If preservation and collection was based only on the initial set of terms, data that was present during the first collection MAY NOT be present during the second run.  The market is screaming for a low cost way to manage litigation holds, conduct and manage preservation and collection and cull data inside the enterprise.  The fear I have is that this great technology will not be used properly.  Technology is dangerous without a sound process in how that technology is used and relied upon.  Saving money only to later spend more becuase you did not do it right the first time helps no one.  Danger Will Robinson!

So Easy A Cave Man Can Do IT? Part II - Keeping Up with The Joneses

Introduction

Last week I promised to write more on the topic of the perceived competitive threat from law firms in the electronic discovery space. This article will address the first in a series of challenges law firms face in being competitive with electronic discovery “vendors”. As a reminder, and for anyone keeping score to remind me later, it remains my prediction made many, many years ago, that law firms will not by and large be able to compete with litigation support providers in general, much less the much more sophisticated and competitive electronic discovery market.
Our system of justice is based upon a precedent or authority.  Black's Law Dictionary defines "precedent" as a "rule of law established for the first time by a court for a particular type of case and thereafter referred to in deciding similar cases."  Many of these views are not mine alone, nor where they originated by me.  So, this is not some isolated electronic discovery vendor rant.  If you’re an attorney with a law firm considering jumping into the cut throat electronic discovery business, you may want to pay attention to this series. 

What is the motivation?

So why do some firms appear to be jumping in with both feet?  As I mentioned in the first article, we have been here before where law firms try to capture revenue that they see going out the door.  

"Gartner estimates that the world’s enterprise e-discovery software market came to $889 million in 2009 in terms of total software vendor revenue. We forecast a five-year compound annual growth rate (CAGR) of approximately 14%, which means the total should reach $1.5 billion in 2013." "Magic Quardrant for eDiscovery Software"; Gartner; 13 May 2011; Debra Logan and John Barce.

$1.5 Billion!  That is a lot of dough and not a small pot of money that lawyers are trying to recover.  $1.5 billion in revenue by 2013 is just the software revenue too.  That figure does not count acquistion, preservation, processing, review and production revenue associated with services. Add those up, services currently being pulled away from law firms by their corporate clients, the pot of gold is many billions more than the $1.5 outlined by Gartner in the Majic Quardrant.  Lawyers are also getting hit very hard by the drain on attorney review revenue (the hourly billing) being caused by smarter, better and faster data culling and contract review techniques that have dramatically reduced the need for review attorneys.  Fewer lawyers are needed today in a typical document review than even a year ago and certainly two years ago.  As a result, law firms have and will continue to go after that revenue.  Many, and likely most, won’t be successful and, regrettably, may go the way of Howrey.  I for one don't relish the idea of watching good firms break apart becuase they made poor business decisions.  Lord knows there are enough other business pressures on law firms today justify their bills for legal advice, much less ESI bills.  But I digress and a topic for the next article. 

Keeping up with the Joneses

The Joneses here are the electronic discovery providers. Keeping up with those Joneses is a full time job for those of us out here doing that now. Don’t law firms have their hands full competing with each other? Back in December 2009, George Rudoy, who writes the E-Discovery Law Blog for Georgetown Law School, stated that historically the decision for a law firm to outsource was based upon the following general factors. In this series, we will look at these initial set of factors:

“Law firms are in business to provide legal advice. Therefore despite the ever-present component of electronic discovery, law firms generally do not view their e-discovery services (sans consulting on the matters of compliance, discovery strategies, etc.) as profit centers, but rather as an unavoidable part of today’s litigation.


Given the point described above, it is therefore rare that a law firm would invest large sums of money into necessary infrastructure to support the ever-changing demands of e-discovery services and their perpetual maintenance to realistically compete head-to-head with the external providers.


A consistent mentorship and evaluation of the e-discovery providers coupled with well-organized and logical selection process of the providers assures some degree of comfort and somewhat predictable results that usually meets the requirements of the discovery exercises.” “To Insource or To Outsource”; Georgetown E-Discovery Law Blog; Posted by George Rudoy at 11:06 AM on 1 December, 2009.

The firms that have gotten into this business have discovered, like Howrey, that competing in the electronic discovery services space is expensive IF they want to compete head to head.  The IT infrastructure required alone can be very expensive.  Considerable IT budgets beyond the initial investments are then required each year. These are investments well beyond the annual IT investments of a typical law firm data center, even that of the Law 200.  Keeping pace with the rollout and support of email and word processing software is a far cry from the expertise and infrastructure needed for today's advanced eDiscovery applications.

Lack of Security

Many law firms already have sophisticated data centers you say? Not so fast, let’s first look at security.
One of the major components of delivering electronic discovery services is the ability to host reviews, sometimes with external reviewers, but certainly with lots of sensitive information being stored on the law firm’s network. The amount of information that a law firm must manage to justify a profitable electronic discovery business is mind boggling. Assuming a firm does have the volume (which will be addressed in a subsequent article), the complexity of the security aspects alone may well be more than most law firms can manage. According to one industry expert, Rob Lee, Director with the information security firm Mandiant and the curriculum lead for the digital forensic training at the SANS Institute, the state of law firm security today is “deplorable”.  According to the March 25, 2011 post by Sharon D. Nelson, Esq, President of Sensei Enterprises, Inc, "deplorable" may be an understatement:

“[T}hat may be kind. Certainly we've never done a law firm security assessment without finding significant vulnerabilities and Rob's experience has been the same.” “The Deplorable State of the Law Firm Security”; {ride the lightning] Electronic Discovery Blog; by Sharon D. Nelson.

Rob Lee goes on to say “…hacking into law firms is so easy that the Chinese don’t even waste their “A” teams on it – the junior rookie squads can handle it”.  See “The Deplorable State of the Law Firm Security”.

Most electronic discovery providers undergo regular “vulnerability scans”.  A “vulnerability scanner” is a computer program designed to assess computers, computer systems, networks or applications for weaknesses.  While these scans vary from program to program, the basic principles of security scans remains the same – enumerating the vulnerabilities present in one or more targets.  The company I work for undergoes monthly vulnerability scans, often by separate organizations because we do sensitive work for financial intuitions.  How many law firms do you think undergo regular security scans and how many do you think could meet the security regulations of their clients?

Conclusion

Assuming law firms were willing to make the considerable investment in IT Infrastructure and on-going security measures required for a competitive electronic discovery business, are they willing to continue the annual investment required to maintain a world class, highly secure data center? If so, then that firm makes it past the first of many challenges it will face competing with companies that are years and some cases decades ahead of them. It is difficult enough for those of us who have been in this for almost 3 decades, much less someone just entering the fray.  Next week we will discuss keeping up with quickly changing technology, how difficult it is to keep up and remain competitive. We will also discuss commoditization of processing and production and how law firms are going to find the profit margins on these services are very, very thin and in many cases services with loss leader or breakeven margins. Stay tuned, and please provide your input into this discussion.