Working with E-Discovery Vendors

In the Digital Age, litigators need a working knowledge of how electronically stored information (ESI) is generated and maintained. Fortunately, no prior background in information technology or computer science is required to ably advise a client on e-discovery issues. Indeed, the best practice is to seek help from third-party vendors, consultants, and experts. Nevertheless, lawyers are obligated to make informed recommendations to their clients; to competently select and manage the IT personnel and outside vendors through each phase of litigation, counsel must understand and be proficient in the e-discovery process.

E-discovery vendors can be expensive - budgets can easily exceed tens of thousands of dollars. But there are many opportunities to minimize costs, and a competent and professional outside vendor is often in the best position to spotlight those savings. And even before a vendor is engaged, there are several things attorneys can do up front to economize.

The effort begins by striking an early agreement with opposing counsel to address how ESI will be collected and produced. Such agreements tend to prevent discovery disputes, a major contributor to unnecessary legal fees and client costs. For example, litigation counsel may agree that emails from the parties will be produced in portable document format (PDF), rather than in the more expensive "native" electronic file format, unless subsequently requested by a party. This provides substantial cost savings, but allows a contingency to address the occasional concern with "spoofed" email. This term describes the fraud that occurs when an email sender uses another's name and makes the message appear to originate from a different location, often through the use of another person's computer. If spoofing is suspected, the email may be needed in its native file format so that a qualified forensic consultant can determine the message's authenticity.

Lawyers' Duties
Even when an opponent is cooperative, litigation attorneys often must retain outside vendors and consultants to address ESI issues. In this circumstance, the American Bar Association model rules graft the ethical obligations of lawyers onto the conduct of outside vendors and consultants. Several ABA model rules may apply in the e-discovery context, but the most pertinent is ABA model rule 5.3, which states that a lawyer having "direct supervisory authority over the non-lawyer shall make reasonable efforts to ensure that the person's conduct is compatible with the professional obligations of the lawyer." So how can a lawyer with no IT background - who may rely on others to maintain and troubleshoot his or her own office computer - competently supervise an outside e-discovery vendor?

The Right Questions
E-discovery competency is all about knowing how to ask the right questions. A basic step is to gain a detailed understanding of how the client's ESI is generated, and for what purpose. With that foundation, litigation counsel will be better able to comprehend and appreciate the vendor's explanation of the more technical details of ensuring collection and preservation of the data. Always screen potential vendors carefully prior to retaining them. Among the crucial inquiries are the candidate's experience and the identity of references. Talking to colleagues about whom they have used - and why - is essential to getting the right consultant on board.

Case law teaches these lessons. As courts have held, competent legal representation requires advising a client to preserve evidence when a claim is "reasonably anticipated." (Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 217 (S.D.N.Y. 2003).) It follows that the lawyer must know the scope of the electronically stored information that would constitute the evidence.

If clients are regularly involved in litigation, it may be useful to engage outside e-discovery vendors for the limited purpose of creating a detailed inventory of the client's ESI sources. This may include a topography of the client's computer networks, work stations, backup plans, e-mail, and related systems. With this information as a baseline, an attorney can draft a litigation "hold letter" on short notice. The lawyer should calendar requests for periodic updates to inquire about any changes in the client's ESI system. The key is to stay ahead of - or at the very least, in step with - the client's practices so the right material can be preserved for the case at hand.

A fascinating example of the potential impact of failing to implement a litigation hold is the recent high-stakes patent dispute between Apple and Samsung. (See Apple, Inc. v. Samsung Elecs. Co., Ltd., 2012 WL 3627731 (N.D. Cal.).) Despite the involvement of more than 50 lawyers for Apple and 30-plus for Samsung, the court concluded that both parties had failed to preserve evidence for each other. After the court ruled that an adverse inference jury instruction was warranted against both parties, Apple and Samsung stipulated to call it a draw and not have either instruction read. The point: A lot of money went down the drain because counsel failed to ensure proper preservation of relevant material.

Talk It Through
Costs associated with collecting ESI can result in hefty invoices and unhappy clients. This situation is best managed by engaging a qualified e-discovery vendor early on - often before litigation is filed but after a claim becomes reasonably certain. That way, client representatives can be part of a three-way discussion with the vendor and their lawyer about the scope of evidence and the cost of properly collecting and preserving it to support claims or defenses. Such a conversation should result in a specific and detailed discovery plan approved by the client, which will also lead to more narrowly defined discovery requests for collecting ESI from opponents and third parties.

Don't Be a Bystander
It's not enough to simply retain an ESI vendor once the flames of litigation are licking at the door. A good lawyer will reasonably anticipate a claim and plan ahead for it. For this reason, attorneys need to understand what type of information their clients are generating and where that information is stored. After all, once the case hits the courthouse, it is the lawyers who are charged with preserving the evidence. To fulfill this duty, they must carefully monitor the third-party vendors retained to assist in that process.

A. Louis Dorny is a member of the commercial litigation group and senior counsel at the Los Angeles office of Gordon & Rees.

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