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Insourcing e-discovery

New hires can drastically cut e-discovery costs.

Legal department consultant Rees Morrison, president of Rees Morrison Associates, says the practice of hiring more in-house lawyers to take away work from outside counsel is still extremely rare. However, he is seeing it happen in the e-discovery area. For many companies, it’s one of their largest expenditures, so focusing on savings there can really pay off.

“Law departments realized it’s costly to hire vendors, and even more costly to hire law firms, to capture data forensically, put it in databases, and sort through your document review, your privilege review,” Morrison says. “If you hire one or two of your own people, it makes an economic difference in the costly e-discovery process.”

Many litigation-heavy companies are asking themselves whether to hire temps or employees to handle such tasks, he says. But there are challenges to insourcing e-discovery, beyond the volume challenges inherent when considering bringing categories of work in-house.

For one thing, Morrison says, it’s a high-turnover position because experienced e-discovery experts are quickly recruited by consultants or vendors that can often pay better than law departments. The difference is especially clear among nonlawyers. Recruitment of e-discovery specialists is getting difficult as well because the expertise is in high demand. Second, while an in-house e-discovery manager will have an excellent knowledge of the company, he may not be as aware of outside trends in e-discovery compared to his consultant or vendor counterparts.

Williams Cos. General Counsel Jim Bender works directly with vendors, managing them in-house rather than doing so through a law firm. The approach began about five years ago, when the company dealt with a large securities class action and started to see opportunities to do things internally. In-house e-discovery experts at Williams manage the vendors and legal hold process and can testify in court about related issues.

“We still have to use vendors and consultants, but we manage this all ourselves,” Bender says. “A lot of companies let law firms handle e-discovery … but more and more are trying to do it internally because it can be so expensive and every law firm has a different approach and works with different vendors. We’re centralizing, so we can produce information where needed.”

Associate Editor

Melissa Maleske

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