A Multidimensional Solution to the Problems of Runaway Discovery 

June, 2010 -

In 2010, the legal services industry—and for

that matter almost every industry—faces a new

landscape that requires not only a different way

of thinking but also a different way of doing

business to ensure short-term survival and longterm

success. The body of survey and industry

data developed in the past six to 12 months suggests

that the traditional legal service delivery

model for litigation needs to be reworked.

Three key overarching considerations in

2010 for corporations are:

1. Maximizing value received from every

legal task performed;

2. Applying a “lean” process-efficient manufacturing

mentality to legal services; and

3. Moving away from the single-firm model

and retaining the most efficient outside counsel

and other vendors to handle separate

portions of processes, particularly litigation

Although corporations are focused on

reducing legal expenses, survey and industry

data all point to the same conclusion: 2010 will

be an increasingly litigious environment. The

most recent data compiled by BTI Consulting

predicts a 2.3 percent increase over 2009.

The economic turmoil of 2008 and 2009

will continue in 2010 to drive demand in both

bankruptcy and labor/employment litigation.

With changes in the regulatory environment

and anticipated GDP growth, we can also

expect an uptick in antitrust, securities, and

intellectual property litigation. Finally, class

action litigation is expected to increase in the

coming year as well.

Discovery Trends

Litigation costs and risks have increased

along with the sheer amount of litigation.

Litigation spend typically comprises twothirds

of the overall outside legal spend for

most corporations, and discovery can comprise

nearly two-thirds of these litigation costs.

As such, discovery costs dominate case

budgets and are often the single largest line

item in a law department’s budget. These

costs figure not only in cases that are tried

but also in the 95 percent of cases that never

see an opening argument at trial.

There are many causes for the pileup of

discovery costs. First, computerized data

is proliferating. Everyone now has at least

one computer. And, computer storage is so

inexpensive that no one thinks about deleting

anything until big litigation hits and every

one of those tens of thousands of items must

be processed, filtered, and reviewed.

Email is another reason for cost increases.

Email is now the primary mode of business

communication. Email is often carelessly

drafted and sent to multiple recipients who

then forward their copies to other parties.

Now, what was once a single letter (and perhaps

a file copy), can balloon into hundreds

of versions and thousands of copies.

Another factor is that new modes of communication

are surfacing every few months.

Discovery in one case in today’s environment

could encompass email, chat rooms, instant

messaging, text messaging, blogs, Facebook,

LinkedIn, and tweets. No one knows what

else will be next. It is all difficult to control,

delete, and review.

The federalization of discovery is yet

another factor. An evolving and confusing

jurisprudence has been developed by distinguished

jurists who themselves aren’t even

comfortable with floppy disks. Many judges

Of Counsel, Vol. 29, No. 6 13

cling to the very flawed assumption that, just

because something is electronic, it can be

produced and searched instantly.

Notwithstanding the attempt by some

courts to control the cost of modern-day

discovery, courts simply cannot be relied

on to control costs. Most discovery matters

are handled by judges and magistrates who

are reluctant to deny all but the most excessive

discovery requests, despite the potential

burden.

Many judges and magistrates also underestimate

the difficulties associated with

electronic data. Moreover, unlike the case

where parties can point to hundreds of boxes

of paper documents, litigants today are often

unable to determine the full burden of electronic

discovery without spending tens of

thousands of dollars just to put electronic

discovery in a reviewable format.

The cost of discovery is beginning to

surpass loss exposure as a strategic consideration

in litigation. Indeed, some parties

are using the prospect of discovery costs to

extort settlements in weak cases. Some commentators

have suggested that these costs

even threaten to bring about the demise of

the right to trial.

Additionally, many litigants are attempting

to create claims of discovery abuse, failure to

implement litigation holds, and spoliation.

They are seeking Rule 37 sanctions, default

judgments, adverse inferences, and punitive

damages. Most corporate legal departments

surveyed agree that actively managing discovery

is the best way to move the focus back

to the merits of the case.

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