Need To Review Non-English Language Documents? Using Latent Semantic Indexing (LSI) and Machine Language Translation (MT) May Be Your Answer

Posted by: Joe Thorpe on December 9, 2009

The litigation document review process is demanding enough when the files being reviewed involve electronically stored information (ESI). When international parties are involved, foreign language documents may be added to the mix. For many litigation case teams, the first impulse is to begin their document review either by hiring translators or by using machine language translation software.

Just finding bilingual people to work on the review team can be problematical. It also tends to be very expensive. Sending boxes of paper to a translation service is even more expensive. Costs can range anywhere from 20-40 cents per word! $200-$300 per page is not uncommon.

When that volume of foreign language documents (or data) amps up as it tends to do with ESI, many firms have resorted to machine (language) translation (MT). The problem with most MT programs is that they use a dictionary based translation schema which tends to translate words within sentences non-contextually. The resulting narrative is usually lacking in coherence often missing the point of the document being translated. Even if the proper mix of “trainable” MT tools are used to provide a decipherable text, the output frequently contains words evocative of but not the exact key search terms “anticipated” by native English speaking writers of the discovery order. Rather than risk missing responsive or relevant documents by “searching” for just those terms, review teams will turn to performing a page-by-page review of all the machine translated text. Plainly stated, typical searching and culling methods cannot be trusted so instead each page of the machine translated text will be reviewed.

My company’s projects regularly involve international parties and with  many of these requiring the review of foreign language documents (from paper and ESI collections); we soon realized that we needed a better way to identify responsive documents other than eyeballs on each page.

For the last couple of years, our team has successfully employed a "Programmatic Issue Coding" approach using concept categorization and searching tools. Within Concept Categorization technologies, there are several underlying and vastly different technologies competing for that space. Most of these are linguistics based systems which attempt to create a language based taxonomy. These systems do not index every word in the document collection, but rather attempt to use indexed keywords to create a categorization based upon a fixed hierarchy. One may think of a Thesaurus as a taxonomy in that it is a multi-level arrangement of the English language words. Linguistics based systems will “crawl” a document collection searching for keywords (and their frequency of use within a document) and then classify that document putting it into the group of like documents recognized as belonging to that category.

This approach works pretty well where documents have a distinct, recurring and unifying idea, as do articles, compositions, etc. Email, business correspondence and much of what is found in organizational files aren’t as thematic. Oftentimes the subject listed in an email is not even close to the actual subject of the discussion as it has morphed over multiple threads of that same email.

Most importantly though, this approach is a non-starter where foreign language documents are concerned since linguistics based Concept Categorization programs used in US litigation based projects are formed on English taxonomies.

Fortunately, the concept tools that work better for us with English language based litigation documents also work well with documents of other languages. We decided to use tools built on Latent Semantic Indexing (LSI). The software tool looks at each word or phrase in text across the document universe noting co-occurrences statistically. By recognizing these, the tool can categorize (or search across) documents conceptually. As an example, it would note that the word “riot” frequently occurs in documents with the phrase “public unrest” as well as “tear gas” and “rubber bullets”. Using this tool, if a search were performed for “riot”, any of the phrases in my example would return a hit even absent the word riot. Documents found and identified by the case team as being responsive, can then be used as exemplars to train the system to find all “similar” documents and create a resulting category.

The LSI algorithm is mathematical – it understands nothing about what the word by itself means – it creates the index by the pattern it sees. It therefore is functional across English language based text or any other language. So if a riot is described conceptually in any language, it will be captured!

In our practice, we use the LSI tool as a methodology for finding and categorizing hot documents across multiple languages. In preparation for this process, the case team and the project management team use a query methodology against the unstructured text database (all collected files and ESI) using the LSI tool for concept search. Once a sampling of particularly relevant documents is found for each interest category, we use these documents to help train each issue or hot document category. We run these against the entire document corpus to code the documents to each category.

For foreign language documents, we often lead with the LSI based concept categorization process. Not only do we create categories for documents we believe need to be reviewed, we also are categorizing for documents not responsive. This process typically reduces the collection of documents by 50% or more.

The system will also create language identification tags which will identify each non-English language document found and these will be flagged accordingly.

It is after we recognize clusters of documents that are potentially responsive that we then apply MT to only those documents necessary for review. After MT provides an English rendering, we review. From these documents, the handful of documents believed to be highly relevant can then be human translated so they can be used as evidence.

Litigation Hold Missteps: Pre-waiver of Privileges

By Diane E. Barry, Esq.

In Major Tours v. Colorel, the federal district court for the District of New Jersey held that the client (defendant Colorel) had waived attorney client privilege regarding ediscovery response process well before counsel began their actual discovery work. In other words, the privilege was gone before the attorneys even got there. For a closer look at this distressing case, see 2009 U.S. Dist. LEXIS 68128 (DNJ 2009). I found this case interesting because although the articulated reasons for the court’s result were unusual (pre-waiver of privileges) the fact pattern is not unusual and neither were the legal theories applied by the court. This result could spread to other jurisdictions without difficulty.

Major Tours is a discrimination action filed against the New Jersey Department of Transportation and named individuals. The essential: Plaintiffs (all owners of bus companies) claim that there have been discriminatory safety inspections of African American owned buses en route to Atlantic City.

A few important dates:

· In a letter dated May 14, 2002, Sen. Arlen Spector asked the Commissioner of the New Jersey Department of Transportation to look into constituent complaints regarding discriminatory conduct. The Commissioner wrote back that the complaints were unfounded.

· On Sept 11, 2004, Robert Sugarman, Esquire sent a letter to New Jersey Attorney and to the Commissioner of the New Jersey Department of Transportation alleging racial profiling of African American owned bus charter companies who charter trips to casinos in Atlantic City. Sugarman’s letter required a response within 2 weeks “to avoid recourse to litigation.”

· On June 15, 2005, the plaintiffs filed their Complaint.

· November 4, 2005, about 5 months later, the Deputy Attorney General sent the various defendants a letter letting them know that that he might need their assistance for, among other tasks, identification of documents.

· March 22, 2007, about 17 months later he sent out a formal letter requiring preservation of records. 2009 U.S. Dist. LEXIS 68128 (DNJ 2009) *4.

For the first year and a half, the case proceeded without unusual upset. However, when the subject of ediscovery arose, the defendants drew a line in the sand. They offered up a native production of their active data emails, but refused to produce any archived items. They eventually moved for a protective order as to the archived items due to burden and cost.

This is where the case started sliding south for the defendants. As part of the oral argument on the motion for a protective order, the court enquired about the adequacy of the defendants’ litigation hold efforts. The court wanted to know if the defendants had deleted any emails they were under a duty to preserve. The response to this question would affect the court’s decision on whether or not the defendants should be required to retrieve the archived items. 2009 U.S. Dist. LEXIS 68128 (DNJ 2009) *5.

Plaintiffs moved for production of the two litigation hold letters from the Deputy Attorney General to the defendants. The Defendants argued that the letters were privileged, and that without a preliminary showing of spoliation, which had not been made, the letters could not be ordered produced.

The court disagreed.

The court started out with the defendants. Generally, litigation hold documents are both attorney-client and attorney work product privileged. 2009 U.S. Dist. LEXIS 68128 (DNJ 2009) *6-*7. However, the court switched sides over the litigation hold.

The court noted that the “prevailing view” among courts considering the matter was that litigation hold letters are discoverable when spoliation has occurred. The court analyzed the opening litigation threat letters, and decided that the Sept 11, 2004 letter from Attorney Sugarman was sufficiently specific regarding the immediate threat of litigation to trigger the litigation hold duty. 2009 U.S. Dist. LEXIS 68128 (DNJ 2009) *11-*13. Since the earliest attempts at litigation hold did not occur until more almost two years later, the court thought it probable that that relevant documents had been deleted. (The court also had its doubts as to whether the first letter from the Deputy Attorney General actually qualified as a litigation hold letter, but left those aside for the moment.) This was sufficient to show probably spoliation, and to require production of the requested discovery letters.

Fast forward to the present.

The facts set out in Major Tours are not unusual. They illustrate every attorney’s worst litigation hold nightmares: the client had been put on notice but did not understand that it had been put on notice; important steps were not taken; relevant documents were destroyed; important privileges were waived. By the time the Complaint was filed it was already too late. The privileges had been waived years before counsel even began their litigation work.

Major Tours is unusual on two counts. First, counsel were blindsided when the court brought up these issues, sua sponte, during oral argument on their motion for a protective order. These issues are expected during motions for cost shifting, for spoliation sanctions, for motions in limine. Counsel were caught flat-footed because they didn’t expect them to accompany their motion for a protective order. Next, although litigation hold documents are often produced during litigation, often voluntarily in defense of spoliation claims. Major Tours was distressing due to the legal reasoning used. Pre-waiver of important privileges is a new nightmare for counsel to add to their litigation hold woes.

Lessons to be learned:

· Look at litigation hold issues carefully before undertaking a new litigation matter. What are you walking in to? Is there a colorable argument to be made that privileges have already been waived? If yes, document these items with your client and proceed with the understanding that your litigation response process may well be discoverable.

· Even without pre-existing litigation hold issues, litigation hold and ediscovery process documents should be treated from the outset as if they are not privileged and the opponents and court may well see them. These documents are often necessary as defensive items, to prove good faith or lack of bad motives in the discovery process. Be careful what you say in them, and have draft them with the understanding that the unfriendlies of this world will be looking them over with 20/20 hindsight.

· Litigation hold and spoliation claim issues can arise at any time during the discovery process and not just as part of motions to shift costs or specifically addressing spoliation. Be ready to address and defend at any point.

Discovery Strategy & Management
International Litigation Services, Inc.
dbarry@ilsTEAM.com

Using Interpreters in Litigation

By Mark S. Shipow, Esq.

IN A GLOBAL ECONOMY, in which it is increasingly common to have disputes between individuals and companies from around the world, interpreting from a foreign language into English requires significant attention. It is not enough simply to hire an interpreter on someone's recommendation and then let the interpreter take it from there. On the contrary, there are a number of legal and practical issues that should be considered when using interpreters in the course of litigation.¹

The first issue counsel needs to confront is whether to use an interpreter at all. Often there is no choice; it is clear that the client simply cannot testify in English, or the other side's witness demands an interpreter. Sometimes, however, it is a close call. The witness may not be fluent but can understand and be understood. If there is a genuine dispute between the parties regarding the need for an interpreter, ultimately it is the province of the court to determine.² More commonly, however, the decision is one of strategy. It is important to make a good decision early in the litigation, since it is difficult to change the approach at trial. A witness who testifies through an interpreter at deposition and then without an interpreter at trial, or vice versa, is likely to lose credibility.

Sometimes counsel automatically insists on an interpreter for his or her client's deposition simply to play it safe or make things more cumbersome for the other side. However, that approach does not necessarily benefit the client. Counsel should consider various factors. Cost is one; interpreters add expense. In criminal cases, a court is required to appoint an interpreter when necessary for the defendant to communicate. There is no such requirement in civil cases.³ As a consequence, civil litigants must pay for their own interpreters. But strategic considerations almost always are more important than cost.

A major consideration is the importance of the witness communicating directly with the judge or jury, weighed against the importance of the testimony sounding like what the jury expects. When a witness testifies through an interpreter, the time lag between the testimony and the interpretation often disconnects the emotions, gestures, and speech of the witness from the English interpretation. This can reduce the impact of the testimony. Furthermore, it is very difficult for an interpreter to convey the nuances of what the witness means or what the witness's state of mind is. Truly, much is lost in the translation. On the other hand, a witness who is not reasonably skilled in English probably will not be able to convey nuances or emotions without an interpreter. Moreover, jurors may be jarred by hearing a witness speak with a heavy accent, use unfamiliar idioms, or make errors in vocabulary and grammar, and may be frustrated by having to struggle to understand the witness.

Another factor is whether the witness has been in the United States for a long time or regularly conducts business in English. It is counterproductive for a witness to be thought of as trying to hide behind the interpreter or taking advantage of the extra time that the interpretation takes in order to concoct answers. Similarly, if the witness uses English to speak with his or her attorney (such as in meetings or preparation sessions or at the deposition itself), using an interpreter to speak with opposing counsel in the deposition may make it appear that the witness is playing games. In this regard, counsel deposing a witness who is using an interpreter should ask the witness to testify about his or her use of English. Does the witness use English at home, in business meetings, and in conversations with counsel? This can be a way to undercut the credibility of a witness who uses an interpreter at the deposition.

Although not determinative, some consideration should be given to the fact that using an interpreter at least doubles the time it takes to provide testimony, whether in deposition or at trial. Questions and answers are stated twice (once in each language), objections often are interpreted,⁴ issues of the accuracy of the interpretation invariably arise and take time, and more frequent breaks are necessary. This can be frustrating and expensive and substantively affect the case if there is a time limit on the witness's testimony. Judges sometimes do not understand how much extra time is needed for interpreted depositions and may not permit extra time if the other party objects to how long a deposition is taking.

Also, an interpreted deposition permits the attorney somewhat less control. If a deposition is given entirely in English, the attorney can interrupt his or her witness if the witness appears to be heading into a problem, such as revealing privileged information. In an interpreted deposition, the answer can be given (at least in the foreign language) before the attorney has a chance to do anything.⁵ Even if the interpretation is not provided, the answer will be understood by anyone in the room who understands the foreign language (such as an opposing party), and if the deposition is being taped there will be a recording for possible future use.

Whether an interpreter will be required typically becomes apparent early in litigation, although sometimes the need for an interpreter arises only after a witness who does not speak English is identified. In either situation, as soon as a decision is made that an interpreter is needed, counsel should take steps to identify a qualified interpreter. Government Code Section 68561 require use of a court-certified interpreter in any "court proceeding" using a language designated by the Judicial Council under Section 68562(a), except for good cause shown.⁶ A court proceeding is defined as any civil, criminal, or juvenile proceeding, including a deposition in a civil case.⁷ One source of interpreter candidates is the court's list of certified interpreters.⁸ However, as in any other profession, certified interpreters have strengths and weaknesses, and some may be better than others in particular situations. In deciding which interpreter to use, an attorney should consider numerous factors.

Court certification is beneficial and helps to overcome objections or reservations from judges or opposing counsel. However, court certification is not a guarantee, and not necessarily even an indicator, of competency. Conversely, an interpreter who is not court certified is not necessarily unqualified.⁹

Ideally, the interpreter should be fluent in English and the foreign language. However, most interpreters are stronger in one language than the other. In that situation, attorneys are well advised to use an interpreter who is stronger in English than in the foreign language. It is critical to have an English interpretation that a judge or juror will readily understand. After all, the main purpose of the interpretation exercise, as with every other aspect of litigation, is to be able to provide information to the fact finder in a clear, cogent, and understandable manner. That purpose is undermined by having an interpreter speak in halting or stilted English.

Another factor to consider is whether the interpreter is experienced in litigation. Interpreting at a deposition or during trial is quite different from interpreting at a business meeting. The interpreter must be familiar with, and not intimidated by, the adversarial process, including interpreting pointed cross-examination questions, handling arguments between counsel, understanding legal terms, and dealing with an interpreter who checks the first interpreter's work. Also, a litigation-savvy interpreter is more likely to understand the need to provide precise interpretations, rather than simply conveying the gist of the question or the testimony. Interpreters who primarily handle business meetings are used to conveying the sense of what the speaker intends, taking liberties to interpret what is meant. And this is much easier and safer to do when people are conversing about business issues. In contrast, litigation typically hinges on rather specific events, statements, words, and phrases. More precise interpretations are required. In this regard, it also is important that the interpreter be experienced in seriatim interpretation (providing the interpretation after the statement rather than simultaneously).

Before retaining an interpreter, counsel should interview the candidate, in person if possible. If counsel has access to someone who is fluent in, or at least knowledgeable about, the foreign language at issue, include that person in the interview. Even with an interview, it may be difficult to gauge the interpreter's skills in the foreign language. At the least, confirm that the interpreter's English is strong, so that the interpretations will be understandable, that the candidate will be able to get along with you and others involved in the case and survive the ups and downs of litigation, and that the candidate will be generally available for assignments so that you do not need multiple interpreters working on the case. Speaking to other attorneys who have used the interpreter will help in considering these factors.

After selecting a primary interpreter, it is good practice to identify a backup interpreter. Having another interpreter preselected will help in the event that the primary interpreter is not available or is unacceptable to opposing counsel, or a checking interpreter is needed, or other circumstances arise that prevent using the first choice.

______________________________________________________

1 The terms "interpreter" and " translator " often are used interchangeab1r. However, an interpreter is one who takes the meaning of oral statements (such as testimony) from one language to another, while a translator is one who takes the meaning of written statements (such as documents) from one language to another. See Evid. Code §751(a) (interpreter required to "make a true interpretation of the witness' answers") and §751(c) (translator required to "make a true translation ...of any writing").

2 Hilbert v. Kundicoff, 204 Cal. 485 (1928).

3 See Jara v. Municipal Court, 21 Cal. 3d 181 (1978).

4 See Standards of Judicial Administration, Standard 2.11(a)(11).

5 Once an answer is given, an interpretation may be required. See People v. Wong Ah Bank, 65 Cal. 305 (1884) (It is the duty of the interpreter to report every statement made by the witness; the court should require strict compliance with this requirement.).

6 At the end of 2007, the languages designated by the Judicial Council were Arabic, Cantonese, Eastern Armenian, Western Armenian, Japanese, Korean, Mandarin, Portuguese, Russian, Spanish, Tagalog, and Vietnamese. See http://www.courtinfo.ca.gov/programs/courtinterpreters.

7 Gov’t Code §68560.5. As a practical matter, many attorneys use noncertified interpreters for depositions. In the absence of an objection by opposing counsel, a court is unlikely to intervene, but a court likely would require a certified interpreter if the issue were presented prior to the deposition, or if opposing counsel preserves the record with a proper objection. The certification issue may trap the unwary in international litigation if opposing counsel preserves the record with a proper objection. For example, if a deposition is taken in a foreign country through the use of a non-court-certified interpreter, and a proper objection is made, the deposition testimony may not be allowed at trial. Since the out-of- state witness would not be subject to the subpoena power of the California courts, the witness's testimony may be unusable. See Code Civ. Proc. §1989.

8 See http://www.courtinfo.ca.gov/program/courtinterpreters for a list of certified interpreters.

9 See People v. Roberts, 162 Cal. App. 3d 350 (1984); People v. Estrada, 176 Cal. App. 3d 410 (1986).

International Litigation Services, Inc.

mshipow@ilsTEAM.com

Is There an Elephant in the Room?

By: Joe Thorpe

Litigation is a constant. Government regulation is on the increase in virtually every corner of American finance. The Federal Reserve, the FDIC and the SEC all have expanded powers and the Obama administration is creating a dizzying array of new agencies and councils. Virtually every major corporation now has a professional team of corporate compliance officers and their plates are already full.

Whatever happens to the economy in the next few years, one thing is crystal clear: your corporate legal department’s costs are on the rise. This will be the case regardless of your corporate line of business notwithstanding that you are a good corporate citizen.

Frederick Nietzsche in his book, Ecce Homo: How One Becomes What One Is penned his famous quote, "whatever doesn't kill you makes you stronger". When I mentioned this to a friend the other day, he quickly pointed out that soon after his book was published, Nietzsche went stark raving mad and lived for 11 more years. I'm not sure if it was drugs, syphilis or nervous breakdown but whatever it was, it didn't kill him and it certainly didn't make him stronger. After thinking about it, I think my friend was right. Merely surviving a calamity isn't what makes you stronger. What makes you stronger is identifying what's wrong and doing something about it.

Identifying the problem as to corporate litigation expense is actually the easy part. Examine your billing statements and you will find that at least 70% of your litigation expenditure on any given matter is related to discovery and the lions-share of that is the document review. Reviewing documents for responsiveness, privilege etc. has always been a fundamental requirement of the discovery process. And, that process has always involved handing over the requirement to outside counsel. Much of the document review in the larger firms is being conducted by first and second year associates and managed by more senior attorneys. What has changed is that we are no longer focusing this document review around 20 or 30 boxes of paper. Now it's 20 or 30 GB of electronically stored information (ESI) and a first-year associates’ billing rate these days is at least $250 per hour. The same is true with document reviews for government investigations and regulatory compliance. The target documents are no longer measured by boxes but by gigabytes or terabytes and the billing rate for large firm first years are….well, you can fill in the blank.

Now to put some perspective on this, consider that we are looking at approximately 12,000 documents per gigabyte. In a straightforward first pass review we might expect a reviewer to get through approximately 600 documents per day. Therefore, 20 days to review 1 GB or 12,000 documents. If the billing rate is $250 per hour we would be looking at approximately $40,000. That probably wouldn't include his or her manager’s time for direction and work review and oh yes, there were 20 GB needing to be reviewed. Just a tad over $800,000!

In the cost calculator below, with 40 GB collected and at a filter rate of 50%, we illustrate the above scenario of 20 GB for attorney review (240,000 documents), together with collateral costs. Note that costs for collection, filtering, processing and document production together represent just over 7% of the total costs. My conclusion: Yes, there is an elephant in the room!

International Litigation Services, Inc.

jthorpe@ilsTEAM.com

Content Analyst: a Latent Semantic Indexing tool for Issue Coding, Concept Categorization and Searching of Litigation documents

By: Joe Thorpe

Content Analyst: performs categorization (for issue coding) and searching by concept. This is a purely mathematical approach which pays close attention to words and "phrase concept" co-occurrence over a large body of documents. If in your documents for example there are a number of references made to my property management group called the Endurance Management Group (EMG) and one of the properties that they manage for me is called the Thorpe Towers, the software will figure that out. A search for Endurance Management Group will return documents with the Thorpe property even if no reference is made to EMG or Endurance. And, if that document involves discussion of a complicated 1031 exchange, you can use that document to train a category for 1031 and it will get each reference where found in other documents -- even when the transaction is discussed in other ways not specifically referencing the term 1031. Here is a link that speaks generically of the LSI approach which does a much better job of describing how (and why) it works.
http://knowledgesearch.org/lsi/lsa_definition.htm

There is a competing technology to the LSI approach stemming from the "Bayesian" set of algorithms -- the objective of categorization software using the Bayesian approach is to create a taxonomy and structure thusly.
This is a linguistics based approach, the idea behind which is to index the entire corpus of data and let the program generate the common topics that it finds and organize the documents against these topics. This approach tends to work better when the documents are all articles each following a well organized theme.
In business communications (i.e. e-mail, etc.) conversations are typically all over the map. Too often the subject line bears no resemblance to the key points in an e-mail thread nor does the writer put much organization into the content. For documents in litigation databases, we found very little value in the Bayesian methodology.

Our preference for the Content Analyst engine using the LSI method culminated a four year search for a categorization tool that really provided value to the mining and organization for an unstructured document database as is the case with a large collection of litigation documents. This product would not be as useful in a Concordance or a Summation environment – it’s not yet integrated so it wouldn’t be interactive through a document review process - but it is supported in any of the following three hosted review platforms: Relativity (by kCura), iConect and Eclipse by IPRO. Each has integration to the Content Analyst system. All are very well respected litigation database platforms (for online document review) and each provides the flexibility of being able to re analyze and index throughout the document review process.

International Litigation Services, Inc.

jthorpe@ils-ipp.com

eDiscovery a.k.a. “The Money Pit”

By Joe Thorpe & Diane Barry Esq.

Are Rising Discovery Costs Inevitable?

Most corporations long ago resigned themselves to the fact that litigation is just another part of the cost of doing business. Fortunately, given the current state of the economy, many corporations are re-examining this “fact.” Across the corporation, departmental budgets are being reconsidered and trimmed of excess. One of the most intransigent items is the litigation budget. Costs are rising sharply, and corporations are often frustrated in their efforts to contain costs which seem largely beyond their control.

Discovery costs are often the highest price items in the litigation equation, and discovery costs associated with ESI lead the pack. The sheer volume of ESI (electronically stored information) which a corporation creates during the ordinary course of its business is an endlessly increasing number. In turn, this number has pushed discovery costs into a dizzying inflationary spiral. Identification, collection, production and review costs can be staggering, raising the price tag of even relatively small litigation matters.

Many corporations turned to their counsel and eDiscovery experts to assist them in taming the wild costs associated with discovery. Their advice: be prepared. Litigation Preparedness programs were designed and implemented to solve the rising costs of untamed ESI discovery. The expert advice: if the corporation only had a better understanding of its information and regulatory and legal requirements, and used “best practices” for collection, preservation and production, costs would be reduced. Improvements were made, but usually, litigation costs did not reverse. Instead, they simply rose at a slower rate. Substantial savings have been made through preparedness but no essential change in the inexorable rise of litigation costs has been achieved.

The Process Is Broken

For corporations which have embraced litigation preparedness, litigation risks have been made more manageable. There have also been substantial reductions in the per item costs to collect, review and produce discovery materials. However, since the number of paper and data files which need to be produced in litigation continue to rise almost exponentially, overall discovery costs likewise continue to rise sharply.

This is because despite improvements to the current discovery and production process, the process itself remains the same. Most companies continue the age old practice of coordinating with outside counsel to work the discovery process. It is time to consider not the individual work points on this process, but the inevitability of the process itself. The process does not lend itself to cost reductions because the process itself is broken.

Studies show that where eDiscovery is involved, up to $.70 of the litigation dollar is spent on the identification, collection, processing, review and production of ESI. This statement is misleading, in that it gives the impression that all points on the listed work spectrum have an equal share of the associated costs. (i.e., that collection has the same proportion of the overall cost as production). Any corporation which has examined its legal bills has come to the conclusion that this is not true. The single most expensive point of this process (more than 80% of the discovery costs) is and will continue to be legal review. The costs of identification, preservation and collection pale in comparison. Attempts to reduce the overall costs of discovery by containing the costs associated with these points have failed to produce the desired level of savings.

For discussion, let’s look at the below figures, which illustrate the costs associated with a basic ESI production.

The below chart assume that there are 75,000 page equivalents, or 15,000 documents per gigabyte (roughly 5 pages per document).

Matter #1

Service	Volume (GB)	Doc Count	Cost
Data Collection	20	300,000	$1000
Process and Filter	20	300,000	$12,000
Filter Data	14	210,000
Attorney Review	14	210,000	$420,000
Hosting	14		$6,300
Production		136,500	$68,250
Total			$507,550

The costing assumptions are as follows:

Data Collection	$50 per GB
Process and Filter	$600 per GB
Volumes Remaining (GB) after Filtering	14 GB
Three months hosting charges (14 GB)	$150 per GB per mo.
Attorney Review	$150 per hour
Docs reviewed per day per attorney	600
Production	$.10 per page

As you can see, the collection, processing, filtering, hosting and production charges, taken all together, represent less than 20% of the total cost. The document review costs are what push this project into orbit.

Most corporations are approaching the process through costs containment, and as a result, are achieving only limited success. They have discussed the costs with their outside firms asking them to come up with a different plan for document review. Some have instructed them to explore the use of contract attorneys (which could easily halve the document review costs.) Still others have explored using offshore document reviewers, which has the potential to lower costs even further. All of these options cut costs, but the overall costs of discovery continue to rise.

When the Corporation Controls the Process

The time has come to admit that this process is broken. Reducing the price points of this process will never provide corporations with the cost reductions they seek. Corporations must adopt a different model if discovery costs are ever to be brought under control. Most specifically, corporations must place themselves firmly in the driver’s seat and change institutional practices which abdicate responsibility for basic discovery decisions in favor of outside counsel.

Let us say up front, this article is not intended to bash or otherwise cast full blame on outside counsel. Instead, it is our intention to point out that outside counsel and their corporation clients have different goals and perspectives on the discovery process. Many of outside counsel’s discovery process decisions are rational and necessary from their point of view, but fail to address the considerations, including the cost considerations, dear to corporations.

Problems arose for most corporations years ago when it became standard practice to outsource ESI discovery management to outside law firms. A decade ago, ESI discovery took many corporations by surprise. A timely response required a fair amount of technical expertise and practical know how, and corporate IT resources were otherwise occupied with the day to day business of the business. Rather than build in-house expertise and resources, corporations elected to outsource. As this was a litigation related issue, it was reasonable to outsource it to litigation counsel.

This decision has proved a costly one. First, few outside counsel firms have as much expertise in the technical aspects of ESI discovery as they have with the legal and strategic aspects of a litigation matter. And yet, they are responsible for designing and managing the technical aspects of the corporation’s ESI discovery. Also, many corporations engage multiple outside counsel firms. As a result, a corporation can have as many different processes for producing ESI as it has outside counsel. Finally, an outside law firm lacks the global view of the corporation’s documents and total litigation matters which inside counsel must have. Outsourcing ESI discovery to outside counsel guarantees that each matter’s discovery will be considered in isolation, with work common to more than one litigation being performed (and paid for) again and again (and again.)

The answer is for corporations to drastically redesign their model for management of ESI discovery. Rather than outsourcing discovery decisions to law firms, corporations must take up the management role.

Consider the following example. Many corporations are serial litigants, and certain documents are in constant demand. The email of the head of sales for a particular year may be of interest in several ongoing and future litigation matters. Under the outsourcing model, that executive’s laptop and emails will be sent to multiple sets of outside counsel for privilege and relevance review. The corporation will therefore pay for privilege review costs as many times as there are litigation matters which request those files. The outside law firms can hardly be blamed. They have no information to let them know which files have been reviewed already, and what decisions were made as to each record. They are not provided with the TIFF image or PDF of the document created in a prior litigation. No one tells them that the document was produced to the SEC last year (privileged or not). Therefore, each outside law firm receives documents for a matter, it starts from scratch: identify, collect, process, review, produce. The costs for multiple treatments of the same documents are paid for by the corporation multiple times each year.

Consider also the costs associated with responding to federal court 26(f) conference preparation requirements. The law firm requests the documents it wants, and requests the formats most convenient for its systems. These choices are not always the most cost effective or convenient for the corporation. (The corporation usually finds out after the agreements have been made.)

Do your corporation personnel like to use MACs? Most litigation systems don’t handle MAC files well. A law firm may have only one client with this need (your corporation). Your matters always need it. A serial user will always get a better price than a single matter license. The same goes for foreign language translation, cross-lingual search tools (search in English and get results in Japanese); and foreign language search tools.

Rewind and consider the same litigation matters and how they would have proceeded if the corporation were in charge of the discovery issues. First, the corporation is in the best position to store and track the complete and uniform treatment of its own litigation discovery materials. The corporation could keep a litigation ready archive, storing litigation ready copies of the documents (metadata intact and images where they are available). Any prior decisions regarding each document can be stored in the same database record. This document was claimed as privileged – in X v. Y litigation, on date Z. When a litigation matter commenced, the store could be searched, and relevant materials exported out. A complete history of the document could go with it, including its prior review treatment. (This item is privileged, and was reviewed in 2007 by law firm X). For most purposes, if the item was reviewed before, it need not be reviewed again – proceed directly to production or to privilege log. Skip attorney review for this item.

The corporation could own the hosting and review platforms – either hosting the data through in-house resources, or by contracting directly with outsource companies. When the corporation owns the keys to the system, it can let in which ever counsel it deems appropriate. If it changes law firms, passwords/keys to the system can be almost instantaneously withdrawn and new keys to the system provided to the new outside counsel. There is no need to negotiate the return of litigation documents and records. The corporation never gave up control and therefore still has them all.

Looking at the process this way, let’s look again at our ESI review model.

In this model, the corporation has assumed responsibility for building an eDiscovery process, and retains control while working with an outside law firm. Multi processing and review costs are avoided; uniform results maintained; individual corporate needs (MAC and foreign language issues) are met; litigation duties are fulfilled.

Matter #2

In this example we assumed a rate of 40% recurrence (10 custodians, four of which were previously collected in matter #1). Therefore, only 60% of the 210,000 documents require a level 1 review (privilege and relevance). That number will go up or down depending upon the type of business and the similarity between matters. Naturally, more savings can be realized through use of contract attorneys managed by outside counsel. Needless to say, there can be another 30% reduction in overall cost in matter #3.

This approach assumes that the corporation controls the process – retains control of access to the hosted document repository from which all documents are reviewed and decisions as to the individual items are maintained there. Document notes, tags and work product together with logins and credentials for outside counsel users are controlled and managed by the corporation.

Service	Volume (GB)	Doc Count	Cost
Data Collection	20	300,000
Process and Filter	20	300,000	$7,200
Filtered Data	14	210,000
Previously Produced	(These documents can be produced without review)	81,900
Attorney Review		128,100	$256,200
Hosting	14		$6,300
Production (previously produced documents at three cents per page)		165,165	$53,917.50
Total			$324,417.50

A Promise Unrealized

ESI is the product of a technology that changed the face of corporate America. Information Technology has transformed the way we work and live. It has also been the catalyst for every process reengineering initiative in business over the last fifteen years. In companies everywhere each department has been rebuilt from the foundation with astounding end results. There’s just one more department to go. A drastic redesign and reassignment of responsibility for ESI discovery can at last provide the cost savings corporations have longed for.

International Litigation Services, Inc. (ILS)
213.687.7400
http://www.ilsTEAM.com/