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December 31, 2012

Recent Court Decisions Impacting Technology Assisted Review

Sometimes, remarkable things happen in unlikely places.  On October 15th, in the Delaware Chancery Court, Vice Chancellor J. Travis Laster, delivering a ruling from the bench on a motion for summary judgment in a commercial indemnity dispute, sua sponte ordered the parties to use predictive coding technology.

As courts and parties are still coming to understand the use of technology assisted review and the methodologies used to implement these e-discovery tools, it is remarkable that the court would order the use of predictive coding.  More remarkable, however, was the requirement that both parties use the same e-discovery vendor.  The parties were free to show cause why predictive coding would not be appropriate in this matter.

In the words of Vice Chancellor Laster:

"This seems to me to be an ideal non-expedited case in which the parties would benefit from using predictive coding. I would like you all, if you do not want to use predictive coding, to show cause why this is not a case where predictive coding is the way to go.  I would like you all to talk about a single discovery provider that could be used to warehouse both sides' documents to be your single vendor. Pick one of these wonderful discovery super powers that is able to maintain the integrity of both side's documents and insure that no one can access the other side's information. If you cannot agree on a suitable discovery vendor, you can submit names to me and I will pick one for you."  (EOHB, Inc. et al. v. HOL Holdings, LLC, CA No. 7409-VCL (Del. Ch. Oct. 15, 2012) Transcript:  Page 66, Line 10 to Page 67, Line 2)

Commentary abounds on what is intended by the few short lines.  Many have commented on the ethical obligations of the parties sharing a single e-discovery provider, whether identical methodologies must be applied by both parties when utilizing the selected technology (ex. key words or key documents fed into the system, "seed sets"), or whether the parties must use more than just the same technology, but the same review company.  Law firms question whether this approach effectively puts them out of the e-discovery business if judges can mandate the use of the same e-discovery provider (which would need to be a third party processing and hosting vendor under the court's present mandate).  Other commentators have questioned the appropriateness of allowing the judge to select the vendor where the parties could not agree to a single vendor.  Moreover, the judge referred to "wonderful discovery super powers" - so others still question what this may mean for start-ups or smaller regional e-discovery players.  It is unclear how the various questions and possibilities will be addressed by the parties and courts, as the timeline for filing the show cause has not yet come to pass.

While predictive coding technologies can be applied across smaller document sets, they are functionally more cost effective for those cases with larger document collections.  Ultimately, the relevant documents must be reviewed by the lawyers preparing the litigation strategy or preparing for trial, but many vendors purport that the technology can effectively review and designate the entire production set, with the exception of manual review of potentially privileged documents that must be withheld. 

In addition to Delaware, the Southern District of New York (Da Silva Moore, et al. v. Publicis Groupe, et. al., 11 Civ. 1279 (ALC)(AJP), Feb. 24, 2012 Opinion and Order), as well as one other state court, Loudon County, Virginia (Global Aerospace Inc. v. Landow Aviation, L.P., Case No. CL 61040 (Vir. Cir. Ct.), have supported the use of technology assisted review.  A decision remains pending over the use of the technology in the Northern District of Illinois (Kleen Products LLC v. Packaging Corp. of America, Case No. 1:10-cv-05711 (N.D. Ill.), where the discovery issues have been hotly contested.

While many still grapple with the technology and the variations of the technology, and others still view technology assisted review as a "black box" that may not have consistent outputs depending on seed sets and which data sources are loaded first, the courts may continue to take a supportive approach for the technology, and we should see more substantive decisions related to the use of these technologies during 2013.

December 19, 2012

Eight things you wanted to know about Managed Review Legal Project Management (but were always afraid to ask)

Eight simple answers to eight key questions about Managed Review Legal Project Management

1. What is legal project management (LPM)?
Legal project management (LPM)1 comprises a set of functions that are well documented to create a legally "repeatable and defensible" process. 

2. Why should you ask your legal process outsourcing provider about LPM?
Because LPM uses well established and documented processes, supports repeatable and defensible requirements, and allows for tracking metrics, it can be used for establishing benchmarks. These benchmarks result in better project planning, scoping, and estimating discovery costs.

3. How does LPM enable increase in productivity and accuracy?
Carefully executed LPM increases efficiency and reduces cost by decomposing the legal process into predefined tasks and utilizing the tasks for case planning and production scheduling, which allow the project management team to focus on risk and cost controls during each phased task.

4. What are the best practices in documentation and communication you need to adopt during LPM?

  • Review protocol
    Documents used for identifying the substantive review criteria, including background information provided by clients to educate the team on legal issues, clearly defined scope of responsiveness per investigation or litigation demands, and those additional issues for which special attention is required.
  • Review guidance
    The document describes the functionality of the client's review tool, the specifications of fields or tags used for review, and the mandatory requirements for thorough review of each document. It may include instructions for system login, or how to get information for searches or annotations.
  • Details document
    This MS Excel workbook tracks critical client review information, such as the list of privilege entities (in-house counsel, outside law firms, legal domain names), acronyms used within the client's industry or within the company. The custodian list with summary of job responsibilities, and other relevant information should be tracked to keep the review team informed.
  • Decision log
    Tracker for queries escalated to the client that identifies the underlying document identifier, the date of the query escalation, and the written client response and supervisory attorney validation of the response.

5. Does LPM require legal supervision?
The American Bar Association and many US state bar associations2 require adequate US lawyer supervision of non-lawyer work.

6. How important is flexibility in the LPM process?
A key aspect of LPM is documented flexibility. Review projects, by the very nature of being fact-finding exercises, require some element of adaptability within the lifecycle of the project. 

7. How can the project management team be more adaptive?
While certain types of legal review projects have common elements, the project management team must be adaptive based on daily learning and timely educating of reviewers about new developments, and applying new criteria to quality control searches.

8. What are the benefits of a flexible approach?
Documented adaptations will allow the team to react quickly to any changes in the scope of work, to communicate those changes to counsel, and to develop a revised action plan that can account for any deviation from the anticipated delivery deadline or resource requirements. In turn, this information flow helps counsel manage their budgets and management's expectations when working on billable hour basis, or this process facilitates cost mitigation from service providers where projects are taken on a fixed fee basis.

1Steven Levy wrote a book and blogs on LPM:
http://lexician.com/lexblog/
http://www.legalprojectmanagement.info/blog/
2 ABA Committee on Ethics and Professional Responsibility Formal Opinion 08-451 (2008); The Association of the Bar of the City of New York Commission on Professional & Judicial Ethics, Formal Opinion 2006-3 (2006); Los Angeles County Bar Association, Opinion 518 (2006); North Carolina State Bar, Formal Ethics Opinion 12 (2007); San Diego County Bar Association Legal Ethics Opinion 2007-1 (2007); Florida Bar Opinion 07-2 (2008).
http://www.dcbar.org/for_lawyers/ethics/legal_ethics/opinions/opinion362.cfm

December 6, 2012

The SCM Ecosystem - Strategies for Successful SCM BPO Operations (Part 3 of 3)

Organizations planning on SCM BPO need to first recognize the fact that unlike traditional BPO, SCM BPO is more about reducing COGs and improving operational efficiencies and NOT about reducing supply chain headcounts.

Keeping this in focus, a roadmap for successful SCM BPO operations should include the following factors/strategies:

  • Focus more on outcomes and less on operating costs - i.e structure contracts around savings in direct material costs, reduction in inventories, improvement in COGS rather than SGA costs such as FTE costs
  • Choose service providers who can provide end-to-end supply chain services by seamlessly integrating with downstream and upstream supply chain partners
  • Develop specific industry expertise in the supply chain - for e.g the automotive industry would require a specific skillset in managing the supply chain vis-à-vis the CPG or Healthcare industries
  • Conduct assessments or diagnostics to arrive at potential gains from SCM BPO before launching full-fledged services - for e.g an assessment of inventory and potential gains in terms of DSO, working capital etc will help decide whether a fully operational CIOG Managed Service (Centralized Inventory Optimization Group)  is justified
  • Utilize Centers of Excellence (CoEs) to conduct diagnostics,  standardize and transition processes as well as provide quick ramp up capabilities

The starting point for SCM BPO will be in analyzing the SCM landscape, identifying processes which provide the maximum promise from outsourcing and finally prioritizing the processes in a well-defined roadmap.  Integrating this with strong supply chain consulting services and governing it with business outcomes will be the way forward in building a successful SCM BPO operations.

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