Fordham Law


LegalTech Takeaways: Cost-Saving Tips, Government E-Discovery

Silvia Hodges in Law.com, February 02, 2012

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E-discovery cost reduction using data mining software, and e-discovery tips for cases involving the U.S. government, were two of the unique sessions at LegalTech New York on Wednesday.

The former panel focused on Motorola Solution's use of TyMetrix analytics software, while the latter emphasized unique aspects of Department of Justice cases.

"My whole schtick when I got into the law department was, 'You guys don't even know how much you spend or where you spend it'," began Karen Dunning, senior director of legal operations at Motorola Solutions. But, she reflected, "How do you let the general counsel really understand in a single picture, in 4 to 5 minutes, how and where they're spending money?"

Dunning answered that question throughout the morning panel, "Creating an Industry Advantage Through Data Mining and Industry Benchmarks," by explaining the uses of data mining software. Such software, which gather data and analyze it for statistical trends, are already popular in fields such as engineering and healthcare -- and the techniques are just as applicable to corporate legal departments.

"I find it interesting that we create this facade in the legal industry that everything is unique and different, because then it can't follow a learning curve," Dunning observed. Motorola began saving several million dollars per year at the start of this decade by graphing and plotting data from the collected hourly bills of its external law firms, she said.

For example, Dunning said, law firms are inclined to assign lawyers in Chicago, where Motorola is based. But much of the work could easily be done in a mountain city such as Denver, or a southeastern city such as Raleigh, N.C., where hourly rates are less expensive. Firms sometimes have partners do associate-level tasks, or have associates do paralegal work, and then bill at the higher rate instead of the rate actually required for the task. In addition, there are many cases where the budget only allows for a junior associate at a top-tier law firm -- but that same money could be used for a more qualified senior partner at a less noteworthy firm. Motorola used all of these methods, and they were all realized with data mining, she explained.

The company also now refuses to pay outside firm's research service bills, and often pushes for alternative fee arrangements. As some legal services become commodities, it's a fair metaphor that when you buy a box of pens, you don't pay extra for the machines used in their assembly and the worker's hourly rate, noted Silvia Hodges, an independent law firm management consultant on the panel. Traditional hourly rates can be viewed as punishing more experienced attorneys who practice faster, she noted.

Lastly, the application of data mining software to legal bills is not a fad -- "I think it's naïve of us to think this is not a systemic change," Dunning said.

WHEN THE GOVERMENT IS A PARTY

"Civil Litigation: When the Government is a Party" highlighted the show's afternoon panels. Allison Stanton, director of e-discovery at the U.S. Department of Justice's civil division, teamed with Joshua Wood, the division's chief of litigation technology, to explain how their organization performs e-discovery in defense and plaintiff roles.

"The government's always willing to work with you and work out a strategy as we go forward," Wood said. The department has many discovery goals in common with businesses, such as determining the custodians, proportionality, and scope of claims, Stanton said.

Regarding the differences, "One is an obvious sense of scale. We are a very large organization and the analogy to a large corporation with lots of different offices does not necessarily apply. We have lots of different leaders and structure that doesn't always interface the way you think it might," Stanton explained. Also, "The issues that are at stake are usually much larger in general," so the department may put extensive resources into cases with small dollar amounts but substantial legal implications, she noted.

"We're not really trying to mess with you on this stuff. We're just trying to figure out how to get the information. We're not trying to drive up costs," Stanton continued. However, "There are certain things that we can not and will not settle because of the liberties, rights, and protections that we are charged with doing," and their will always been sensitive subjects with no room for negotiation or even explanation, she said.

Of traditional paper production, "We have told our attorneys we will tase them if that is the answer," Stanton joked. Yet there is a very serious side -- attorneys cannot stonewall the government. "If we don't trust you, it can get very ugly, very fast," she emphasized, and attorneys who bring search parameters with creativity, credibility, and transparency have a good chance of seeing their requests met.

Government can be slow to change because of its size, but the Department of Justice is trying to keep up with technology and with legal industry changes, Stanton added. Her position did not exist two years ago, and the department is starting to replace older systems with modern cloud versions, she said.