Law Times

Law Times • December 5, 2016 Page 9 www.lawtimesnews.com In-house tech talent critical To insource or outsource e-discovery BY JIM MIDDLEMISS For Law Times O ne of the biggest chal- lenges litigators face in a world where digi- tal records dominate paper is helping clients keep a rein on runaway costs for docu- ment production and review. Sarah Millar, head of Osler Hoskin & Harcourt LLP's e- discovery management group, hopes her team is part of the so- lution. "We are working to bring down the costs associated with [e-discovery]," she says. Millar confines her practice to discov- ery issues. As part of that, her group has been tasked with building an internal e-discovery and review service that provides litigation support to Osler's lawyers, and the service is offered to clients as part of the firm's Osler Works initiative. It's a nearshoring service that clients can tap, as opposed to using a third-party e-discovery outsource provider. Osler has built its system us- ing Relativity, the popular e- discovery software, as the back- bone. Its team comprises lawyers, e-discovery review experts and computer technologists, whose sole job is to focus on e-discov- ery matters. Millar says her firm decided to bring e-discovery in-house as part of its "menu of services" because "we felt we knew how to use the back end and the tools just as well as any vendor." However, it goes further than that. For Millar, there is an ethical component to e-discovery. "This is a legal process," she says, and lawyers need to be in charge of the process and drive the bus to protect things such as solicitor-client privilege. A second reason, she says, is the immediacy associated with litigation. When a demand letter arrives and a company is put on notice that it is being sued, "you need to be able to hit the ground run- ning," she says. The delay in getting an e- discovery vendor approved as a company supplier eats up valu- able time. "Internal investigations at our clients need to be looked at today," she says. When it comes to providing e-discovery litigation support, most law firms are either opting to work with one of the growing outsource vendors or choosing to build their own offering. Dominic Jaar, a former litiga- tor and national practice leader of forensic technology services at KPMG Canada, says there has been an ebb and f low to how law firms in the United States have re- sponded to the rise of e-discovery, which shifts as the technology de- velops. Originally, Jaar says, the U.S. e-discovery market was driv- en by third-party e-discovery vendors, with which law firms would work on litigation. Then as law firms saw how much of their disbursements were going to vendors, he says, law firms felt "there was money to be made." So many created their own platforms. However, the pendulum has swung back to outsourcing. In the early days, e-discovery was expensive. He recalls when he was a litigator at Bell Canada being charged $2,000 just to collect data from a single computer. That was just to collect the in- formation. "Then the pricing for pro- cessing the data was appalling," he says, adding that companies would charge hundreds of dol- lars per gigabyte just to process the information. A company being sued could quickly face a tab of $40,000 or more just to get started, he says. However, as technology has advanced and more e-discovery competitors have entered the market, the price for processing has plunged to around $40 per gigabyte and dropping. The challenge for a law firm that builds its own platform, however, is keeping up with the investment needed to run an e-discovery operation. KPMG Canada runs an e-discovery managed service that Jaar says many law firms rely on. It pro- vides access to "best-of-breed software technology," such as Relativity, Nuix and EDT. He says his firm's solution can reduce costs associated with processing and hosting data, two of the key charges related to e-discovery. Whether a law firm chooses to use a managed service provid- er or build its own e-discovery platform, there are pros and cons to each approach. Millar feels it's important for law firms to "have some kind of [e-discovery] centre." Osler maintains a software li- cence that allows the firm to use the software on its own servers. "Our clients at this juncture want it hard-hosted," she says. "Some of our clients really care about that." Millar says they want confi- dence that they can identify the servers hosting their informa- tion and know that it's locked up in a proper environment. As well, she thinks that law- yers need to oversee the process, but they "shouldn't be doing the tech piece." The challenge of bringing it in- house, she says, is finding talent. "There's a glut of law clerks that understand the legal piece but do not understand the tech piece," she says. Millar recruits recent com- puter science graduates to com- plement the legal experts. Hav- ing in-house technology talent that can write script and code is critical. She cites one instance where they were able to write some code for about $1,000 worth of time, which allowed a client to avoid having to spend $50,000 on a human review. "When I can do that, I get re- ally excited. I feel like we are liv- ing what we say," Millar says. She adds that an in-house service is also good for highly sensitive matters that might not yet be public. However, Jaar says, law firms are at a disadvantage when try- ing to build their own in-house system, as opposed to using an outsource provider. The first is scalability and the second is tal- ent retention. It becomes a chal- lenge for law firms given their smaller scale to retain talent and train them over time. As well, he notes, it requires continued investment in the technology, which is changing all the time. He says law firm partners are notorious for agreeing to an initial investment in new tech- nology, but when pushed for more money down the road to reinvest in new hardware and upgrade software and training, partners get cold feet because they have already invested hun- dreds of thousands of dollars. Then there are the cybersecu- rity issues that law firms face. "Law firms are under attack," he notes. Larger managed services vendors can focus on the tech- nological investment needed to fend off hackers. Jaar says he internalized the discovery process at Bell Canada when he was there, thinking it was a "brilliant" idea. However, looking back with hindsight, he says, he had "no idea" how complex the e-dis- covery environment would be- come. LT FOCUS Sarah Millar says there is an ethical com- ponent to e-discovery. Law firms are under attack. Dominic Jaar © 2016 Thomson Reuters Canada Limited 00238UV-84920-CE How will you adapt when tech options are no longer optional? MEET COMPETENCY REQUIREMENTS WITH FIRM CENTRAL The rules/codes of professional conduct require lawyers to provide cost-effective service to their clients. Leveraging technology can be one of the most effi cient ways to keep costs low while maintaining a high quality of service. Thomson Reuters market research reveals that the typical lawyer will spend an average of 8 minutes of search time for each individual fact or detail needed within a fi le. If a lawyer needs to locate just 15 facts or fi le details a day (e.g. a date, a name, a factual detail), that would account for two hours of lost time each day — a costly ineffi ciency in any legal practice. User-friendly and cloud-based, Firm Central provides you everything you need to meet your requirements, improve your operations, and get the edge on the competition. Firm Central – now with new time & billing Learn more at westlawnextcanada.com/fi rm-central Untitled-1 1 2016-11-28 3:44 PM

• Cover