Legal departments are getting bigger, in no small part due to growing legal operations staff. But despite the amount these departments spend on increasing staff levels, far more is being saved through cost-effectively bringing more work in-house. And according to research conducted by legal adviser Ari Kaplan, this trend is nowhere more prominent than in e-discovery.
Kaplan recently held conversations with 27 e-discovery decision-makers, composed of corporate counsel, legal operations staff and law firm partners, for his third annual "E-Discovery Unfiltered: A Survey of Current Trends and Candid Perspectives" report. He found that while cost and efficiency drove a significant amount of e-discovery operations in-house, there are more factors and trends at play.
Legaltech News caught up with Kaplan discuss the report findings and what they reveal about the future of e-discovery and legal department operations:
LTN: Most corporate counsel you talked to said they are bringing more e-discovery operations in-house. What are some of the drivers behind this move?
Kaplan: The comments showed two drivers for corporate counsel bringing e-discovery in-house. One was cost, and you can tie together control with that. They wanted to reduce cost and have control of the process. The second one was the idea of using the technology that they are leveraging for e-discovery [for other processes].
So corporate counsel are recognizing that those organizations that view e-discovery more holistically as part of a broader information challenge will gain more value from the investments they're making. And once they realize that it can be used more broadly, they are developing internal skills and the capability to manage it internally, and internal management can yield cost savings.
How are legal departments using e-discovery technology for other processes?
Organizations [can] use their e-discovery technology and processes for enhanced project management, for more efficient information governance, to derive analytics for purposes of gaining intelligence into their data and into their markets. They are recognizing the value of information generally and realizing that they can use their existing infrastructure to increase that value.
That said, there were definitely individuals who said they weren't bringing it in-house because of management issues. You need to have internal familiarity and staffing for proper e-discovery, so there were definitely challenges for folks who don't have a sufficient team and capabilities internally to manage the entire process.
How did those you interviewed plan to invest their technology budgets over 2017?
The interesting thing about this question is that it really listed answers without any real consistency. One in-house lawyer said technology-assisted review (TAR), another lawyer said in-sourcing, and someone else said streamlining their existing tools.
But a number of law firms' partners, in-house legal administrators and corporate counsel also talked about staffing. They had made their investments in technology or infrastructure last year or before, and this year they are building up staffing. So I think that was really interesting. And some people were building up staffing because of the movement in house. If they already have the infrastructure and technology and they're trying to maintain more internally, they are going to invest in people to staff up and manage that a little bit more.
A majority of those interviewed said they preferred to host technology on the cloud. Why do you think this is?
In some instances the organizations they are in are moving to the cloud, so these are institutional decisions that are being made beyond the legal department. But there is a recognition that there is efficiency, a simplification and cost savings in moving to the cloud. One in-house lawyer [I talked to] said the cloud is the future of everything e-discovery related. Every time you put something behind the firewall, you need to pay someone to manage it, and you need to regularly refresh the technology.
Other issues were about maintenance, and maintenance is something that a lot of these organizations don't want to have to address anymore. If the cloud provider can maintain the infrastructure and technology, and of course if its security is proven, then a lot of them perceive it as a better option.