The Firm: Be aware of the hidden costs of self-collection

By Lance B. Levy The Daily Record Newswire Many in-house counsel and the law firms they engage to represent their companies continue to self-collect electronic data, even though they recognize the legal issues and potential dangers involved. The risks are wide-ranging. For example, using members of your IT staff, who may lack experience in electronic data recovery for litigation, might not capture the full universe of data. In addition, IT personnel may not realize the importance of using a consistent, repeated process for each custodian, so they may not document, or properly document, the process they choose to employ. Further, they may unintentionally spoliate evidence or inadvertently alter metadata. In the event members of your IT team have to testify about the collection in court, their lack of litigation and e-discovery experience may make them less than ideal witnesses. From the business perspective, asking them to collect data distracts them from their core initiatives and responsibilities of driving the business forward. Despite these risks, companies often self-collect because they want to minimize costs or are not fully aware how easy and cost effective it can be to retain a third party to perform the collection. This reminds me of a friend who recently put on a significant addition to his home, both in terms of size and cost. While every detail of the addition was first rate and impressive, he decided, against his wife's wishes, that to save some money -- which would allow him to buy a larger flat screen -- he would tile the new bathroom himself and attach the fixtures. At first glance it looked great, but upon closer inspection you could see the tiles were not aligned, the grout was visible on many tiles, and some of the tiles came loose after just a few months. Also, the towel bar was crooked and came off its support. Needless to say, they had to have the floor redone and ended up spending more money to hire a professional to fix it. Similarly, in e-discovery it is not expensive for a third party to collect data, and it saves companies money in the long run. Generally, third-party collection costs account for only a small percentage of overall e-discovery costs. The potential risks of sanctions and creating issues (and potentially more billable hours) for your outside counsel may affect their representation of your company. Is this the best place to try do-it-yourself repairs? Along with bottom-line savings and improved efficiency, partnering with an outside party will reduce costs in other ways. An outside party's collection methodology has been tested and is consistently deployed across locations and custodians, rendering it highly defensible. Additionally, using an e-discovery provider to collect data ensures your people stay focused on the task at hand -- advancing your company's business -- and using a disinterested third party avoids the appearance of the fox guarding the hen house. Moreover, engaging an outside company will also avoid the common pitfalls of in-house e-discovery: under-collection and over-collection. Hiring an e-discovery expert also allows you to sample the data as you collect it, ensuring you are capturing all the data you need but not the data you do not. Further, as many companies do business globally, putting your e-discovery in the hands of an expert familiar with the international rules and regulations that apply to data collection ensures compliance with the law. Finally, if your IT team does not have the proper technology or experience, it may not collect the entire universe of responsive data. If your company's data is scattered across multiple sites, and if your IT team does not have an accurate data map showing where ESI is currently stored and where it has been archived, you will face challenges ensuring that your collection is complete. As a general counsel of two companies who has dealt with complex litigation, I have lived through this experience. In one litigation matter, my company's IT team, which had no experience with e-discovery, spent more than two weeks collecting data. During and after the collection, my outside counsel and I worried whether we had gathered the entire universe of relevant documents, whether our process was defensible, and whether our IT representative would need to be deposed or have to testify. Having learned from that experience, I decided not to self-collect again. Therefore, when deciding whether to self-collect, it is important to focus not only on the small percentage of savings, but also on the tone it sets for the case and your outside counsel, as well as your peace of mind; eliminating the risk of sanctions and spoliation; providing your CEO, CFO and board of directors comfort that you have put the company in a more favorable position; and presenting a thorough and sound collection methodology to the court. ---------- Lance B. Levy is in corporate and legal practices at LexisNexis Applied Discovery. He can be contacted at lance.levy@applieddiscovery.com. Published: Wed, Aug 3, 2011