Clients Take Charge

There was a time when law firms drove the discovery bus and made decisions about everything from outsourcing document review to hiring the service providers. But thanks to electronically stored information (ESI), discovery costs have skyrocketed, and corporate clients are increasingly taking the keys back.

Mark Howitson, deputy general counsel for Facebook, says even law firms' age-old practice of marking up the price of document review performed by contract attorneys--often the largest e-discovery expenditure--doesn't fly these days. "Law firms must be able to answer the question of how cost-effectiveness will be achieved," he says.

Nowadays, companies require their law firms to use preapproved vendors, or they incorporate e-discovery strategies into information management systems to bypass law firms altogether. "E-discovery is not really a core competency for most litigation law firms," observes Virginia MacSuibhne, director of ethics and compliance at Roche Molecular Systems.

Though law firms may worry that they will soon be reduced to managing outside service providers--while signing on the dotted line to assume the associated risk and liability--there are ways for them to address this shift in client relations.

The Hybrid Approach
Midsize and large firms can build internal expertise by designating specific teams to tackle e-discovery. Identify attorneys, technologists, and staffers with e-discovery experience who can lead these efforts on significant cases.

Strategies for this approach vary greatly (see examples below), but they tend to combine attorney expertise with supplemental service providers. Law firms can provide tailored discovery services while overseeing the overall case management. Under this rubric, an attorney of record can supervise document review by any combination of lawyers from the firm, on-site contract attorneys, or vendors in lower-cost domestic or offshore areas (costs range from about $20 to $100 per hour).

The All-In Strategy
Firms can also invest in e-discovery as a distinct line of business. Orrick, Herrington & Sutcliffe and Clifford Chance, for example, have created facilities dedicated to litigation support in West Virginia and New Delhi, respectively. In addition to cutting costs for the corporate client, this model may improve integration between the discovery workflow and the subsequent motion practice or depositions.

Meanwhile, some small and midsize boutique firms focus exclusively on e-discovery services such as document review and production. They function just as managed services providers would-but as law firms, they also carry malpractice insurance.

Clearly, the role of law firms in the discovery process is changing, and those without an e-discovery story to tell are poorly positioned to win--or keep--business. As corporate clients insist on new models, law firms must rethink how they do business to control costs, reduce risk, and perhaps earn some revenue in the process.

Dean Vanech, cofounder of Podo Legal in San Francisco, is an e-discovery and managed-document-review consultant. He writes the company's weekly Discovery Spotlight blog.

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