Cost Management in E-Discovery

1. Cost Management in E-Discovery Identifying and Taking Advantage of the Opportunities for Cost Management in the E-Discovery Process James M. Wright, P.E. Wright Consulting LLC - Houston Formerly: Director - Electronic Evidence Consulting - FTI Consulting, Inc. Director of E-Discovery - Halliburton

2. Some Basic Considerations • Three general kinds of costs: • Internal Costs • People, Hardware, Technology • Technology Vendors • Services, technology fees • Legal Review • Law firms, technology fees • Legal review is always the greatest component, and data volume reduction is the key to reducing those costs

3. More Basic Considerations • Cost Management actions may affect Risk • Spoliation • Good Faith with the court • Case Strategy • Risk Transfer from OSC to Client • Opportunities for cost management in the process have narrow time windows. • Decisions tend to be matter-specific • Outside counsel may push back

4. ESI Volume ReductionTwo Main Methods • Reduce ESI in play -26[b][2][c] NRA Claims • Catalog in place, don’t even collect • Necessitates early action • Cost Estimating tricky, subjective • Meet and Confer negotiation critical • Low Hanging Fruit – Tiered approach • Minimize the cost of processing • Filetype, date filters • Consider Clawbacks, Quickpeeks • Initial review cost-saving methods

5. Identify & Collect ESI Analyze ESI : Qty/Type Develop ED Plan Prep for Meet & Confer Early Actions TimelineUnder the new FRCP Meet & Confer Scheduling Conference Filing Duty to preserve ?? days 21 days time

6. The E-Discovery Team • Client • Owns Risk, Pays Costs, so can make risk decisions quickly • Knows ESI best, has IT resources • Ability to move early and quickly • Counsel • Strategic Legal Knowledge • Familiarity with Court • Knowledge of legal issues in E-Discovery • E-Discovery Tech Vendor[s] • Powerful technology options • Ability to apply resources as needed • Experience in processing ESI • Ability to provide expert testimony to E-Discovery matters Discovery Management • Discovery Management • Develops & Manages Discovery Plan • Activities • Resources • Schedule • Identifies Risk & Cost Issues • Coordinates Discovery Team

7. The E-Discovery Process-Overview PHASE 1 COLLECTION & SCOPE Preservation Collection Analysis Meet & Confer Rule 16 Scheduling Conference PHASE 2 PLANNING & NEGOTIATING Discovery Plan PHASE 3 EXECUTION ESI Processing Legal Review Production

8. PHASE 1 Actions & Decisions Preservation Collection Analysis • Generate ESI Collection Inventory Report • Identify File Types of Interest • Identify Files where Native is Necessary • Identify non-standard File Types • Non-Indexable • Non-Commercially usable • Internal Proprietary Identify Key Players Publish Lit Hold Interview Key Players Determine Relevant ESI Locations with Data Map Identify Vulnerable ESI Determine Privacy or Confidentiality Issues Determine Need for Forensics Notify Opposing Counsel? Collect Coordinate with Custodians Maintain Chain of Custody Records

9. Preservation Cost Mgmt Opportunities Identification of Key Players establishes overall scope of ESI collection. Preservation Identify Key Players Publish Lit Hold Interview Key Players Determine Relevant ESI Locations with Data Map Identify Vulnerable ESI Determine Privacy or Confidentiality Issues Determine Need for Forensics Notify Opposing Counsel? Technology tools exist to automate much of this process. Use of questionnaires in advance of personal interviews Develop a detailed Data Map internally which can be edited for each matter If forensic collections are deemed appropriate, consider whether outside collectors are needed. If you intend to exclude any significant ESI from preservation, consider notifying OSC to limit later spoliation risk.

10. Collection Cost Mgmt Opportunities Collection Decide if making collection as a means for preservation is cost-effective. Establish protocol for collections from PC’s which is subject to interruption and can be very time-consuming. Consider whether to do this over the network or locally in user’s office[s]. Collect Coordinate with Custodians Maintain Chain of Custody Records Consider internal collections. Will necessitate software, hardware, and people. Perform collections internally with enterprise applications that track CoC automatically.

11. Analysis Cost Mgmt Opportunities Confirm the availability of applications or resources that can generate these reports quickly. These can be desktop apps, or provided by ED vendors. Analysis • Generate ESI Collection Inventory Report • Identify File Types of Interest • Identify Files where Native is Necessary • Identify non-standard File Types • Non-Indexable • Non-Commercially usable • Internal Proprietary Consider using “inclusive” rather than “exclusive” approach. Identify hi-qty file types that can be excluded [e.g. html] Quantity of these file types can present significant cost challenges Non-indexable file types cannot be electronically searched, so special process [e.g. OCR], or costly human review is necessary Consider the means to produce these in “reasonably usable” forms.

12. PHASE 2 Actions & Decisions Meet & Confer Rule 16 Scheduling Conference Discovery Plan Identify File Types & Search Criteria Develop Plan(s) for Non-Index-able and other File Types to be Searched Develop Plan for Backup and other Media Establish Burden Arguments for Excluded [NRA] File Types Identify 30[B]6 Deponent[s] Who Attends? Present Proposed Discovery Plan Negotiate Terms for Search Criteria [Keyword List Sizes, etc.] Negotiate Privilege Issues Negotiate Form of Production & Timing [Rolling?] Negotiate Authentication Issues Who Attends? Negotiate Differences in Discovery Plan Present/Defend Burden Arguments for NRA ESI Argue Cost-Shifting Negotiate Schedule

13. Discovery Planning Cost Mgmt Opportunities It is essential that a file type listing [both number and size of each file type] is available to do this. Not all ED vendors can generate this information easily. Discovery Plan Parties will usually accept a date range filter [i.e. file creation date]. The range must be negotiated Identify File Types & Search Criteria Develop Plan(s) for Non-Index-able and other File Types to be Searched Develop Plan for Backup and other Media Establish Burden Arguments for Excluded [NRA] File Types Identify 30[B]6 Deponent[s] Decide privilege issues This can be complex, but is extremely important, as non-indexable files [e.g images] cannot be electronically searched, so expensive human review is needed. Quantify these file types and if a significant number exist, either argue to eliminate them from further review if possible or propose an alternate, limited, processing scheme [e.g. sampling, OCR & E-search, narrow date range, etc.]. Also address files that should be produced native. & discuss authentication thereof. After identifying whatever backup media exists that might contain discoverable ESI, determine if it [largely] exists elsewhere and decide whether it can be argued that it is NRA [Not Reasonably Accessible]. Develop argument to include Undue Cost, Business Disruption, and Disproportionality. Be prepared to defend the numbers at the Rule 16 hearing, or arrange for ED vendors to do so. Decide who will be the 30[b]6 wtiness[es] to testify to collection methods and actions, and to defend burden arguments. Does a Clawback Agreement make sense ?

14. Meet & Confer Cost Mgmt Opportunities Meet & Confer In addition to outside counsel, consider having the E-Discovery coordinator[s] present, to consult with counsel on ED issues, and to discuss with opposing party, if so directed. Present a detailed, proposed E-Discovery Plan, as developed in the previous steps. Leave room for negotiation. Who Attends? Present Proposed Discovery Plan Negotiate Terms for Search Criteria [Keyword List Sizes, etc.] Negotiate Privilege Issues Negotiate Form of Production & Timing [Rolling?] Negotiate Authentication Issues Discuss date ranges and file types first, as these are not normally rigorously contested. For Keywords, agree to a procedure, but not specific keywords at this time. Negotiate a “Clawback” if deemed appropriate. Subject to the court’s likely interest in expediency, negotiate enough time to deal with the keyword process, and subsequent review. Try to agree on a rolling production. Negotiate Authentication methodology for any files to be produced in native format.

15. Rule 16 Conf Cost Mgmt Opportunities Rule 16 Scheduling Conference Consider having E-D specialist[s] attend, or at least be available outside the meeting for consultation or testimony, or at a minimum. by phone. Who Attends? Negotiate Differences in Discovery Plan Present/Defend Burden Arguments for NRA ESI Argue Cost-Shifting Negotiate Schedule Be prepared to present the arguments for areas where agreement could not be reached in the Meet and Confer. Be prepared to defend any burden arguments for the exclusion of ESI, even if agreed to by opposing counsel in the meet and confer. Consider having ED vendors present or on call if deemed appropriate. If arguments to exclude NRA ESI are unsuccessful, be prepared to argue for cost-shifting. Endeavor to get enough time to execute the Discovery Plan, and be mindful of the keyword process and review time. Try to agree on a rolling production.

16. PHASE 3 Actions & Decisions ESI Processing Legal Review Production Selection of E-Discovery Vendor(s) Management of Vendor(s) Analysis of Vendor Reports during Processing Decisions on Filtering Criteria Negotiate Keyword List & Processing Coordination of any Vendor Testimony Develop Review Plan Single or Multi-Phase? Contract Attys? Review Platform[s] Limited Review due to Clawback? Prioritize Review per Rolling Production Agreement Develop Privilege Log[s] Coordinate Productions per “Rolling” Agreement Confirm Authentication Oversee and Log Productions Audit E-Discovery Vendor QA/QC Processes

17. ESI Processing Cost Mgmt Opportunities Based on the Discovery Plan, vendor selection should consider amount and type[s] of ESI, the type[s] of processing planned, the time allowed to process it, and the amount of it that is expected to pass the filters to legal review. To facilitate the process, it is best to have standing Master Agreements with the vendor[s] of choice. ESI Processing Selection of E-Discovery Vendor(s) Management of Vendor(s) Analysis of Vendor Reports during Processing Decisions on Filtering Criteria Negotiate Keyword List & Processing Coordination of any Vendor Testimony The decision of who will manage the ED process is essentially important. Client-management is always best from a cost management perspective. The ability of the vendor to generate reports on the ESI as it is processed [the earlier the better], is essential. Always select vendors who can meet your needs in this regard. Of special importance is keyword “hit reports” that quantify the number and total volume of “hits” for each keyword. Once quantitative reports are generated by the EDVendor, decisions on filtering criteria can be made. Start with highly selective criteria and expand as needed, to assure hi responsive rates early to allow production to begin. This is especially important with keywords, which is why this was negotiated earlier in Phase 2. To the extent that burden or other arguments to limit processing of ESI are relevant, identify the responsible party early so preparation can begin.

18. Legal Review Cost Mgmt Opportunities As soon as it becomes apparent what kind of volume of data will make it to legal review, decide how to proceed: Single review with Trial Counsel, or multi- review with initial review performed by lower cost alternatives. If contract attys are selected, several options exist: 1] Self-contracted, hourly 2] Specialty firm, hourly or unit rate 3] All-inclusive fixed price Legal Review Develop Review Plan Single or Multi-Phase? Contract Attys? Review Platform[s] Limited Review due to Clawback? Prioritize Review per Rolling Production Agreement Develop Privilege Log[s] Selection of review platform is critical. If the file count is high [tens of thousands], conceptual-grouping platforms are proven to reduce cost significantly. Based on the perceived sensitivity of the document collection, consider producing without legal review, subject to a privilege claw-back agreement. Focus initial review on the “low-hanging fruit” so production can begin early, minimizing complaint from the requesting party. This gives more time to cull subsequent productions. Many EDV hosting platforms can auto-produce privilege logs for files so-coded during review.

19. Production Cost Mgmt Opportunities Having negotiated the form of production in the Meet and Confer, the ED vendor can generate the production[s] during normal hours, and not the usual weekend 24/7 panic blitzkrieg, for which premiun charges apply. This also allows time for proper QA to confirm redactions, privileges, etc. Production Coordinate Productions per “Rolling” Agreement Confirm Authentication Oversee and Log Productions Audit E-Discovery Vendor QA/QC Processes Having negotiated a protocol for production of native files, the EDV can generate the production accordingly, along with the cross-reference file with the authentication code [e.g hash values]. Depending on the size and schedule of the productions, stay vigilant as to the schedule to avoid last-minute surcharges. Be sure your EDV is maintaining timely QA on the process. This tends to get behind and can create delays and last-minute problems.