The Real Cost of Bringing Ediscovery In-House: Service Providers

[This is Part 5 of a 5-part blog series. To read the whole series, start with Part 1 here.]

Under tight pressure to reduce legal spend, too many corporate legal departments don’t look before they leap and assume that one of their biggest budget line items – ediscovery outsourcing – is the best place to make cuts. In this series, I’ve detailed out the real costs associated with bringing ediscovery in-house, focusing on the costs of acquiring, implementing, and maintaining an in-house ediscovery platform. My goal has been to educate corporate counsel and IT on these often unexpected costs so that you can present accurate estimates to business stakeholders about the ROI of bringing ediscovery in-house and make an informed decision about whether it’s the right step for your organization.

If, however, you determine that the costs outweigh the benefits, there are still simple ways you can reduce legal outsourcing expenses. In this final post of the series, I’m going to discuss how you can better leverage your relationship with your service provider to meet your business goals. By knowing the right questions to ask and choosing a provider that can act as a strategic business partner, you can reduce ediscovery spending and have greater control of your own ediscovery process.  

In a recent survey of in-house lawyers, 7 out of 10 respondents said there is room for improvement in outside counsel’s performance, and nearly half said they had cut ties with a firm recently because they were “too expensive,” “unresponsive,” “did bad work,” “didn’t understand our business,” or “worked inefficiently.” The relationship between corporate legal departments and outside counsel is changing quickly, as in-house counsel demand more efficiency, transparency, and strategic guidance from their counsel. The same can be said of the relationship between corporate legal and service providers that are managing the review process – in-house counsel want to know how much the review is going to cost them and to trust that their provider is offering them the best solutions to get the job done. “Trust” is an operative word here. The corporate legal department of today has to answer to the larger business stakeholders about their budget and performance, and so they need to know that the money they are spending on litigation and ediscovery is being spent wisely, which requires outside firms and providers to have a clear understanding of their business objectives.

Getting the most out of your service provider is all about who you choose. With the right partner, tedious, day-to-day processes are no longer a burden that rests on the shoulders of corporate legal departments, but is instead handled entirely by a service provider who is equipped with the right staff, expert workflows, and cutting edge technology to complete the tasks quickly, accurately, and with the client’s happiness in mind. I asked Jesse Murray at Uber what he wants most from his service provider, he told me one thing: “The freedom to do what I need to do.” In order to get that level of partnership, Metropolitan Corporate Counsel suggests looking beyond the price of “discrete tasks at a cost” and that it’s “far better to work with a partner who can recognize these inefficiencies and help with constant improvement as the relationship grows.” Once a strong relationship is built, that freedom is available to focus on the high-level, strategical aspects of the case matter, and not worry about whether or not the standard daily processes are running smoothly.

Additionally, a good service provider is also going to be able to keep legal departments up to speed on the technologies that they can benefit from most. General Counsel doesn’t have time to be on top of the legal tech market, so they’re going to look to service providers to be their technology advisors. Choosing a provider who makes a point to stay on top of the technologies that will help you most is critical in building a relationship that not only has your best interest at heart, but is constantly looking for ways to improve efficiency and keep costs down.

So how do you find this perfect service provider? For a lot of legal departments it not easy, and it takes time.  There is ongoing consolidation in the market making many of these offerings feel cookie-cutter.  To add differentiation providers are focusing even more on customer service. A lot of service providers can offer everything from small, one-off tasks to full legal business solutions, but choosing a provider who cares about your end goal and advises your decision makers with suggestions on how to achieve that goal more efficiently is going to be the choice for you. Ben Robbins at LinkedIn said that “establishing an in-house discovery department which handles legal holds, collections, early case assessment, and data reduction techniques will always minimize reliance on service providers. If a corporation has the ability to bring review tools in house and optimize how review is managed with partners it will enable the corporation to take further control of costs.”  Ultimately, you should have a blueprint of your solution before the process begins that defines the scope, expertise, technology, and tools you need for the best possible outcome – with all the pros and cons considered up front. And don’t write off sales representatives you speak to at the beginning. The way a service provider educates and trains their sales reps is a great indicator of how well they communicate both their services and their progress along the way. Legal departments should feel they’re well-informed and comfortable from the first step, and every step after that will continue to build a trusted partnership.

So when you consider the three hidden costs of bringing discovery in-house that I’ve discussed in this series, you may decide that bringing ediscovery in-house is a little more than you anticipated. You can accomplish the same cost-cutting effects by taking the time to shop around for the right provider. A partner who cares about your business needs, keeps you informed along the way, is knowledgeable and up to speed on the latest technologies, and can provide consultation about each unique solution is going to be of equal, or perhaps greater, value to your department needs and your company’s bottom line. Armed with the right knowledge, you’ll save your company a lot of cash by outsourcing smarter, not less.