When it comes to discovery, mature organizations are increasingly taking matters into their own hands—bringing more work in house, taking control of processes that were once outsourced, and aggressively pursuing cost and risk reduction strategies. Taken collectively, we refer to this process as “in-housing,” after which Logikcull’s inaugural Corporate In-Housing Survey takes its name.
Months before the coronavirus moved everyone “in house,” as corporate legal teams and law firms alike began sheltering in place and working from home, Logikcull and the Association for Certified eDiscovery Specialists launched the 2020 Corporate In-Housing Survey.
Between November 2019 and February of this year, we gathered data from more than 40 corporate legal professionals and organizations, whose businesses represent a combined 2 million employees and one trillion dollars in annual revenue, looking to understand how they were managing litigation, discovery, and outside counsel. Their candid responses give us unprecedented insight into corporate legal departments’ approaches to discovery.
How the health crisis, and the economic effects it’s having, will impact the legal industry is still an open question. But it’s likely to accelerate the trends identified here—trends we see changing approaches on both the macro and the micro level.
As participants’ detailed responses show, corporate in-housing is increasingly changing the way that discovery and litigation are handled today. Corporate legal departments have already taken much of the discovery process in house, as the survey demonstrates, and expect to take control of even more discovery and investigations work in the future. They are aggressively pursuing cost control strategies, with a focus on reducing costs directly under their control. But, despite success, in-house teams are also struggling to expand their capabilities to match their growing responsibilities, citing lack of bandwidth and personnel as their primary limiting factor.
“How the health crisis, and the economic effects it’s having, will impact the legal industry is still an open question. But it’s likely to accelerate the trends identified here.”
This shift towards in-housing is a transition that, for many, is very much incomplete and, often, in its early stages. Still, it’s clear that the stature of in-house legal is increasing both relative to other departments and, more so, to outside law firms. The traditional approach is very much in flux, as evidenced by these results—and likely to face even more disruption and innovation in the months ahead, as clients and law firms alike look to bring greater efficiency and far more cost control to legal work.
5 Takeaways From the 2020 Corporate In-Housing Survey
1. Discovery has moved in house—and that trend is only accelerating.
Nearly two-thirds of discovery work is done internally today, according to our survey respondents, and that trend is expected to accelerate in the coming years. Surveyed companies handle 63% of their discovery process in house on average, and just under 50% of respondents expect that number to grow significantly in the next five years.
“Nearly two-thirds of discovery work is done internally today.”
2. The greatest cost reduction strategies are accomplished internally.
When asked to rank their most effective cost control strategies, respondents resoundingly focused on internal approaches, such as in-house data collection, culling, and review. Externally focused strategies, such as billing limits on outside counsel and the use of alternative legal service providers, were seen as far less effective.
“Respondents resoundingly focused on internal approaches, such as in-house data collection, culling, and review.”
3. Data reduction is the most effective form of cost control.
In-house legal teams are relentlessly focused on the cost of document review, ranking it as the number-one factor evaluated when estimating matter costs and the most common source of pushback on outside counsel bills. It’s no wonder, then, that data reduction strategies are both the most commonly employed and the most effective. Reduce data at the outset of a matter and the review savings follow.
"Reduce data at the outset of a matter and the review savings follow.”
4. Some of the most effective cost-control strategies are not being employed to their full potential.
Despite high marks, some of the most effective cost-control strategies lag on adoption. For example, while data culling through deduplication was ranked as the third most effective cost-savings measure, it was employed by only 63% of the surveyed companies. Law firm discounts and preferred vendor agreements also rank high for effectiveness, but were utilized by a relatively meager 34% of respondents.
“Despite high marks, some of the most effective cost-control strategies lag on adoption.”
5. Risk and expertise are no barriers to in-housing—but bandwidth is.
In-housing is improving the performance and cost-effectiveness of corporate legal teams. And those teams are expecting to take even more control over discovery and investigations in the future.
Yet, lack of bandwidth and personnel ranks as the largest obstacle to doing so. Far eclipsing all other limiting factors, including perceived risk and lack of budget and in-house expertise, lack of personnel was cited as a barrier to in-housing by more than 60% of respondents.
For the full results, including a look at the typical in-house team's litigation docket, an analysis of the most effective cost-control methods, and detailed data on how corporate clients are working with outside counsel, download Logikcull’s 2020 Corporate In-Housing Report here.
