Dykema
June 1, 2010 - United States of America
A Multidimensional Solution to the Problems of Runaway Discovery
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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 environmentcould 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 13cling 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. Please Click Here to view full article. |
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