Evaluating the Available Solution Models – Program Management Series, Part 4

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A multi-part series on eDiscovery program management issues facing serial litigants, including readiness, resources, service providers, metrics, and more

In the first Part of this series, we reviewed the concept of program management (as distinguished from project management) and discussed its potential cost and risk reduction benefits.  In the second Part, we discussed the evaluation and improvement of organizational litigation readiness.  In the third Part, we discussed how to evaluate your existing needs and resources.  In this Part, we continue our survey of eDiscovery program management considerations with a look at evaluating the available solution models.

Evaluating Potential Solution Models

Before organizations begin proactive management of their overall eDiscovery programs, they typically make case-by-case decisions about service providers and resources, buying services à-la-carte and treating each matter as a one-off.  This approach offers great flexibility, but little predictability or consistency.  It is a fine approach for the very occasional litigant, but as an organization becomes involved in more matters per year, the drawbacks of this approach start to outweigh the flexibility benefits.

Once organizations begin proactive management efforts, they must wrestle with the question of what functions to insource and which ones to outsource.  Greater predictability and consistency can be achieved through aggregating and standardizing work either way, but the trade-offs between cost, control, and responsibility vary.  Because each organization has unique service needs to fulfill and its own preferences about the appropriate balance between cost, control, and risk, there is no ideal, universal solution model.

Benefits and Trade-offs of Insourcing

Bringing one or more eDiscovery activities entirely in house grants the organization the greatest possible control over that activity and how it is executed.  For example, insourcing collection activities would mean gaining control over what’s collected, how it’s collected, and how targeted that collection is.  That control allows for the imposition of greater consistency to reduce risk and increase defensibility, as well as some added control over downstream costs for each project.

The trade-offs for the increased control that comes with insourcing are increased cost and increased responsibility:

  • The specialized software and hardware required for collection or processing or review hosting is expensive. Needed software licenses can range from thousands to tens of thousands to hundreds of thousands of dollars, and the needed hardware kits or leased computer hardware or cloud resources can be comparable.  Additionally, ongoing training and certification will be needed for the employees administering these tools for the organization.
  • Organizations that are parties to a legal matter are, of course, ultimately responsible for all of their discovery activities regardless of who carries out the tasks, but insourcing those activities makes the organization more directly responsible for figuring out best practices and reliable processes. There is also the chance that the employees responsible will become affiants or witnesses providing testimony about those processes.

Benefits and Trade-offs of (Aggregated) Outsourcing

Outsourcing one or more discovery activities to a particular service provider, on the other hand, provides great cost and responsibility benefits.  Aggregating all of a particular activity for outsourcing to a single provider allows you to use the greater volume and longer-term commitment to negotiate service rates unavailable in an à-la-carte approach.  Having costs fixed in advance for a contract term also increases cost predictability for the organization.  And, since the outsourced activity is being handled by experts specialized in that activity, they will carry the burden of advising on best practices, ensuring technical accuracy, and testifying on process.

The primary trade-offs of outsourcing are loss of control and loss of efficiency.  While you will be directing the activities of your chosen service provider, your organization will not have the same level of control over how those activities are executed that it would have if performing them itself internally.  Efficiency, also, can be compromised by the greater effort required for effective oversight and the additional communication required for effective coordination.  Additionally, some organizations are uncomfortable with the “putting all your eggs in one basket” aspect of aggregated outsourcing and prefer to give up the cost savings and keep a pool of providers.

Selecting the Hybrid Model That’s Right for You

Some organizations undertake full insourcing and completely manage eDiscovery activities themselves.  Some opt for complete process outsourcing to their preferred service provider(s).  Most, however, opt for some hybrid of the two, aggregating and standardizing all activities, some internally and some externally.  The various activities are generally organized into three buckets: collection activities; processing and production activities; and, analysis and review activities.

Organizations most often elect to insource their collection activities.  Collection tools are less expensive than processing or review tools, and with relevant training, they can often be utilized effectively by existing IT personnel.  And, as noted above, insourcing collection provides greater control over what and how much enters the top of the project funnel, which helps control downstream project costs.

Because of their cost and complexity, processing and production activities are insourced less often, and because of the associated staffing costs and peaking capacity needs, analysis and review activities are insourced least often of all.  Those two categories may be outsourced to a single, end-to-end service provider or each may be outsourced to a different, specialized provider.

What mix makes the most sense for your organization will depend on the existing needs and resources you identified and quantified in the organizational evaluation process discussed in the last Part.

Upcoming in this Series

In the next Part of this series, we will continue our review of eDiscovery program management issues with a discussion of evaluating potential service providers.

About the Author

Matthew Verga

Director of Education

Matthew Verga is an electronic discovery expert proficient at leveraging his legal experience as an attorney, his technical knowledge as a practitioner, and his skills as a communicator to make complex eDiscovery topics accessible to diverse audiences. A fourteen-year industry veteran, Matthew has worked across every phase of the EDRM and at every level from the project trenches to enterprise program design. He leverages this background to produce engaging educational content to empower practitioners at all levels with knowledge they can use to improve their projects, their careers, and their organizations.

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