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Top 10 ways companies waste money on discovery: Part 2

While litigation and discovery may be inevitable, money should not be wasted.

This is a continuation of this series’ first column, which looked at how and why companies waste money on e-discovery.

Here are other common ways in which companies waste money and efforts on e-discovery:

4. Failing to implement paper disposition. Likewise, many companies have a “roach motel” paper-retention strategy—boxes go into storage, but never come out. Creating ongoing and defensible paper disposition can save money now and during discovery.

5. Completely handing over the reins to your outside law firm. A company’s and outside law firm’s interests are not always aligned. Outside counsel is often concerned with quality, billings, defensibility, and did I mention billings? Handing over the entire e-discovery process to an outside firm and telling it to have at it does not necessarily reduce risks, but certainly invites waste. And even if a company depends on its outside counsel to manage the entire discovery process, the courts still hold inside counsel responsible for process. The court does require in-house counsel to understand the latest requirements and case law for e-discovery (not too hard) as well as understand current best e-discovery practices. Companies may still choose to use their outside law firm or a vendor to handle significant portions of discovery, but at least the in-house counsel will be owning and driving the strategy.

6. Failing to have (and follow) a repeatable process. The flow of litigation is not always regular or consistent, nor should its occurrence be treated like a rare and unpredictable 100-year flood. When a mid-sized or larger litigation strikes, some organizations organize an internal team, collect information on systems to place legal holds, etc. The next time litigation strikes, the team collects information on systems to place legal holds, etc. As Yogi Berra said, déjà vu all over again. This wastes money and internal resources, and increases risk. Companies should create a repeatable discovery process for all matters.

7. Hiring an outside vendor (if you have to) too late in the process. Outside e-discovery vendors have two pricing sheets. One set of lower prices are for those companies not in a rush. The second set of higher prices is for companies who are in a rush and need to find a provider immediately. They can smell panic. If you are going to need outside help, make that decision early so your vendor can be part of the early planning process and your organization can get the benefit of competitive pricing. Note: Hiring an outside vendor is not always a given, as many organizations are developing early case assessment capabilities in-house.

8. Overbroad preservation/collection. A company is served with a complaint, and a its first step is to save everything. Too often the instinct is typically to “preserve everything,” which leads to more data going into the top of the funnel, greatly increasing e-discovery costs. Law firms and vendors will argue collecting everything is more defensible. It’s not really true, but for them it is certainly more lucrative.

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Mark Diamond

Mark Diamond, Founder & CEO of Contoural, Inc., is a regular contributor to Inside Counsel on Litigation Readiness and Records Information Management. You can e-mail...

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