This post is authored by Suzanne H. Clark, an attorney in Jacksonville, Florida and founder of eDiCT, a consulting firm that helps pair organizations with discovery products and services. She can be reached at firstname.lastname@example.org.
Last Thanksgiving over turkey, I struck up a conversation with my brother-in-law, an insurance executive in Detroit, about the development of the electronic discovery market in my hometown of Jacksonville.
With a population nearing a million, Jacksonville is one of the 12 largest cities in the US, and a hub to a number of large companies in the banking, insurance, logistics and healthcare sectors. On the legal services side, we have a good mix of large, medium and small law firms, but — like any city that isn’t New York, D.C., San Francisco or L.A. — have some room to grow when it comes to electronic discovery capabilities.
As I told my brother-in-law, a common eDiscovery problem I encounter is the inability of small law firms to find affordable solutions for one-time projects with a small amount of data, of which they might have a few each year.
These firms will regularly approach a vendor for a solution only to be so put off by the expense or complexity involved that they end up agreeing with their opposition to produce only paper, toll discovery all together, or perhaps even settle the case.
I assume that there must be a better solution — this is, after all, 2016. But most eDiscovery vendors don’t appear to be providing it, at least not to the satisfaction of small firms that primarily handle small matters. Perhaps this is because the service providers, most of which make their money on data, have little to no incentive to take on smaller cases. Most are big game hunters.
My colleague at ACEDS Jacksonville, Chris Dix, a shareholder at Smith Hulsey & Busey, explained the central dilemma of eDiscovery for many small firms: it ebbs and flows, and the amount and complexity of ESI varies by case type, by case load, and over time. One month a firm may be knee-deep in ESI, and then not see any at all for several months. Because of this phenomenon, small firms gravitate toward solutions with predictable pricing that scale to the size of the case and are available on demand.
When I explained this to my brother-in-law, the businessman in him came out and asked “have you considered an aggregator?”
In the insurance industry, he said, small insurance agencies generally do not have access to contracts with large insurance carriers if they don’t meet a certain minimum volume of premiums. But larger “aggregator” companies provide this access by signing up multiple small agencies and allowing them to use the aggregator’s contract with the large insurance carrier.
The benefits work both ways. The aggregator model benefits the insurance carrier because it reduces operational costs while maximizing access to customers. The smaller agencies benefit from the leverage they gain by working with a larger company, the aggregator, that brings a higher volume of business to the insurance carrier. In other words, they are able to purchase insurance at a lower rate because they have access to the aggregator’s terms.
I thought we’d really hit on something. This struck me as a plausible solution to address the lack of supply for scalable, predictable, and flexible eDiscovery tools and services.
The question is: how would this aggregator model translate to the eDiscovery market, where law firms are customers and eDiscovery vendors and software companies provide services to them? Is it a viable solution for local law firms?
The status quo is not an option
We live in an age where evidence is electronic, and therefore, collection, analysis, review, production and presentation of that evidence must also be electronic. Best practices and common sense dictate that the form of handling evidence should be consistent with how it was created. Forgoing the exchange of electronic evidence because it is too expensive or complex to obtain is not acceptable, and ultimately obscures access to the truth.
I’ve started sharing the “aggregator” idea with colleagues in the discovery space, both service providers and attorneys. My cohorts at Logikcull termed this idea “Discovery Crowdsourcing,” which speaks to the benefits of cost, quality, flexibility, scalability, and variety. Chris Dix calls this my “eDiscovery co-op idea,” which alludes to the new amendments to the Federal Rules and the Sedona Conference Cooperation Proclamation.
If Discovery Crowdsourcing is to become a feasible solution, firms must be willing to join together to purchase discovery tools and services as a unified group under the umbrella of an aggregator, and providers must be willing to accommodate a group of firms combined into one entity. Third-party brokers — the aggregators — who are willing to assume up-front costs must also step to the fore.
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