The rising costs of legal services, continuing growth of Big Data, and budget pressures have popularized legal process outsourcing over the last two decades. This can take the form of outsourcing back office functions such as finance and accounting, legal research, M&A support, and other activities to third-party providers, either in the U.S. or offshore. Legal process outsourcing also can help organizations get a better handle on three evolving trends: expanding regulatory schemes, both in the U.S. and abroad; the continuing development of new types of data; and cybersecurity concerns.
First, on the regulatory front, the DOJ and SEC are stepping up their enforcement of the Foreign Corrupt Practices Act. In addition to running their own investigations, these agencies are encouraging organizations to undertake proactive internal investigations and self-disclose any violations. Abroad, both the EU and the UK recently focused on antitrust issues likely to generate the need for e-discovery services: the EU adopted a Directive on Antitrust Damages Actions that provides for the disclosure of relevant evidence, and the UK created a new agency, the Competition and Markets Authority, to investigate mergers and other anti-competitive behavior. With the rise in regulatory activity, global organizations must have local discovery resources that can handle complex e-discovery demands and that recognize—and can defensibly address–the difficult data privacy issues present in some of these countries.
The evolution of more complex forms of data, including social media, mobile data, and structured data, has also encouraged law firms and organizations to look for outside assistance. Many organizations no longer have the time or tools to sort through their stockpiles of data. Instead, they increasingly need tools that expedite the process, such as advanced analytics including technology-assisted review, and the guidance of e-discovery professionals. Rather than invest in bringing these tools in-house, it makes sense for some organizations to retain a managed services vendor with the technology and knowhow to collect that data, process it and winnow the document pool for first-level review.
Finally, with data breaches and cybersecurity concerns becoming more prevalent, many organizations are concerned about the number of providers who touch their data. Thus, instead of increasing risk by shipping data to various vendors for each stage of the discovery process, they are consolidating the work under the umbrella of a select number of vendors that can provide comprehensive discovery services.
Approaches to Outsourcing E-Discovery Technology
As it relates specifically to e-discovery technology as part of a legal department’s broader litigation support strategy, organizations can take any number of outsourcing approaches:
- Comprehensive managed services are ideal for organizations that want end-to-end discovery support for their entire litigation portfolio. In this model, the technology and many (if not most) e-discovery processes are outsourced to the provider to manage in its datacenter, with the option to provide e-discovery staff on site to augment the client’s own team. Working in collaboration with the client, the provider in essence serves as the “hub” for decision-making, workflow standardization across matters, and project consistency.
- Custom managed services tailors e-discovery services to budgets and offers organizations greater control over their data and environment. Like the fully outsourced managed services approaches, the technology is hosted by the provider, but organizations can manage e-discovery tasks in-house (e.g., ECA, processing, etc.) or outsource tasks to the degree of their choosing.
- A backpack service model, which brings the hardware, software, and processes required to the data site, is ideal for short projects with imminent deadlines, small projects with a limited number of custodians and a small data set, internal investigations that must be discreet and fast, and global matters in which data processing and hosting must be performed on-site due to restrictive data privacy rules.
Although these technology models all address current market trends, they offer other benefits as well. Organizations that choose an outsourced approach to e-discovery can simplify their e-discovery workflows, improve their budget forecasting, and reduce risk.
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