IQPC’s 3^rd E-discovery conference for Financial Services felt like a spa day after LegalTech. You get your CLE credit in a room of less than 40 people while being fed gourmet cookies in a comfortable chair with an expensive view of Times Square – unlike LegalTech, where you spend half your time in an elevator of 40 people, and someone has pushed the button for every floor.

There were some noteworthy insights for anyone considering an investment in e-discovery software or services.  We’ve been crunching numbers for our E-discovery User Survey this week, with some interesting results:

• the overwhelming majority of respondents were still performing every part of e-discovery primarily in–house
• but about half were planning to make an e-discovery purchase in the next year
• however a large number of them hadn’t finalized their choice of product or vendor.

So, how to choose?  Well, in the wake of “Zubulake Revisited,” there is now more judicial guidance on the e-discovery process and certainly more at stake.

To get an idea of what the courts are looking for and how companies are adapting, I attended IQPC’s Judicial panel on avoiding sanctions, as well as the panel on building a corporate e-discovery response team, featuring e-discovery senior management from Lehman Brothers Holdings, Barclay’s, MetLife and Bank of New York.

A few takeaways:

• Judges on the sanctions panel were not sympathetic about high data volumes, saying “Lawyers just have to start dealing with it and make requests and responses appropriate.”  They rejected objections to “burdensome” ESI production requests and criticized litigants for lying about production costs to avoid producing data. One recommended native file production to cut costs rather than requesting images or paper (!)

• Judges called for earlier preservation with a written legal hold, particularly in the wake of Scheindlin’s “Zubulake Revisited” opinion, which they called a “shot across the bow.” One claimed that some companies spent ten-digit numbers on preservation alone, especially if they’re caught at a late stage and can’t easily go back. That figure sounds like I must have misheard, but I don’t argue with judges.

• Judges criticized the lack of cross-functional IT and legal expertise at Meet and Confer and in collection of data. They recommended consultant Craig Ball’s 50 questions to prepare for Meet and Confer [pdf], and advised that e-discovery collections be supervised by someone who should anticipate having to testify in court.

• In the corporate E-discovery panel, Lehman Brothers Holdings (the entity responsible for administering all of Lehman’s litigation) reported standardizing on a single review platform for collaborating with all of its law firms, claiming that they initially had “big fights,” but eventually everyone accepted it – probably no mean feat considering the volume of litigation Lehman faces.

• Another panelist noted that more corporations are taking control of review as well as collection and the earlier stages of e-discovery.  She advised that law firms should analyze legal issues but corporations handle the facts, doing as much review as possible in-house or outsourcing it at lower rates to cut costs.

• No one on the corporate panel had any major objection to using SaaS e-discovery or storing legal data in the cloud.

Food for thought.  We are wrapping up our E-discovery User Survey this month and distributing results, which will also be included in our upcoming e-discovery long form report – contact us if you are interested in purchasing.  And many thanks to everyone who has participated in the survey.

I got the chance to attend several sessions at the New York IQPC e-discovery event this week for some interesting perspectives on bringing e-discovery to the enterprise.

Recommind’s Craig Carpenter hosted a panel on Information Governance featuring Scott McVeigh, Director of RM at Aramark and Dawson Horn, Senior Litigation Counsel of Tyco, focusing on the benefits of litigation preparedness and getting organizational support from management and stakeholders. This issue came up more than once during the conference – the challenge of obtaining executive approval and participation from IT, legal, HR, compliance, procurement, RM and other stakeholders in planning, designing and deploying comprehensive information systems. McVeigh encouraged users to be vocal about the need for change, (over the course of several years if necessary), and to invoke C-level names to achieve organizational buy-in.

Autonomy’s Deborah Baron interviewed Karla Wehbe, Senior Information Resources Manager at Bechtel, for a case study of how the company is promoting document re-use by collaborating with outside counsel on a new methodology for ediscovery review. After parting ways with its prior law firm and losing access to previously reviewed documents, Bechtel established an information-centric approach to the process, facilitating re-use of reviewed documents through additional coding from outside counsel. The company claims that 5-75% of reviewed documents are now reusable.

Benefits include better control of document categorization and retention policy, as well as the ability for the company to “tell a story” with its evidence that can be communicated across cases. Wehbe acknowledged an initial “identity crisis” from outside counsel as the corporation established more control, but claims that they are now advocates of the process, and it has built trust and cooperation between them. An interesting example of the changing nature of the attorney-client relationship in corporate law. I am curious as to what their billing arrangement is.

Ian Campbell of iConect was joined by Kurt Michel of Content Analyst, VP of litigation for Phillips North America Timm Miller and Morgan Lewis Associate Denise Backhouse for a discussion of collecting ESI internationally, including EU data privacy regulations, the Hague evidence convention, blocking statutes, and the precedent set by the 1987 Supreme Court case Aerospatiale v. United States for requiring discovery even in defiance of blocking statutes from the jurisdiction of the data.

The difference in global collection philosophy is staggering (at least to this provincial American). Backhouse was asked (facetiously we hope) if it wasn’t enough for both parties just to agree “not to tell” about breaking regulations during discovery, and responded that that would violate the fundamental human right to privacy – literally a foreign concept to those of us accustomed to living under the Patriot Act. Not only could a company not access or even put a litigation hold on employee email in many EU countries, according to Backhouse even board meeting notes would be forbidden since they would identify attendees, potentially revealing where they were employed at the time.

The panel concluded that international e-discovery is not a checklist, but a carefully-negotiated balance between compliance and avoiding sanctions. We continue to follow this with interest, particularly the pending updates from the UK Civil Procedure Rules Committee, as Nick reported from the Thomson Reuters E-disclosure Conference in London.

Unfortunately I missed the judges’ panel, but the sessions I did attend were informative and underscored some of the trends we’ve been seeing in the market. Namely: the rise of Information Governance, the shifting of roles between e-discovery vendors, service providers, general counsel and law firms as technology moves in-house, and the increasingly (complicated) global nature of e-discovery.

We’re now hard at work on our 2010 long-form report on E-discovery and E-disclosure, featuring 25+ vendor profiles and comprehensive coverage of this fast-paced market – publication is slated for late Q1 2010, after Legal Tech. Stay tuned.