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The Importance of Corporations Selecting Their eDiscovery Vendor for Matters Requiring ESI

Posted 10/10/16 3:00 PM by Jason Penrose

Corporations ranging in size from start-ups to Fortune 500 companies still oftentimes defer to outside counsel to select their eDiscovery vendor when one is required for active litigation. Why, you may ask? That’s a great question and one that needs to be addressed, since there are drastically different selection criteria between a corporation and a law firm when choosing an ESI vendor.

In my ten years of prospecting eDiscovery vendors, I can attest to the fact that the selection criteria for choosing a vendor is drastically different for corporations and law firms. Let’s first start by taking a look at the various ways law firms select a vendor. There are generally four main workflows in which law firms will choose their ESI provider:
  1. Everything is run through a Litigation Support Manager who most likely has selected his/her two or three preferred vendors. The firm is then required to use one of those vendors.

  2. A Litigation Support team comprised of analysts, paralegals, and assistants will make a group decision and select the vendor.

  3. The individual attorneys autonomously will select the vendor based on their prior relationships.

  4. The law firm will handle the ESI internally through a platform that they have purchased and host themselves. 

With corporations, the standard workflow is usually that an eDiscovery Manager will select the vendor after a somewhat exhaustive RFP/RFI process where vendors are vetted based on a number of criteria (services offered, reputation, domestic and international capabilities, pricing, security protocol, quality of project management, etc.). Oftentimes corporations are understaffed and therefore don’t have the capacity to go through a vetting process via a RFP/RFI. When this occurs, corporations defer to their outside counsel. I equate this to letting “the fox watch the hen house” so to speak. Below I list the reasons why it’s in a corporation’s best interest to take the vendor selection power away from the law firm and make that decision internally:

  1. Law firms get paid to review documents and charge corporations for reviewing those documents on a per hour basis. Therefore, they aren’t necessarily incentivized to use a vendor that is going to use technology and cutting edge workflows to reduce the document set prior to starting the review.

  2. When corporations outsource the vendor selection to the law firm, they are not benefitting from their “buying/purchasing power.” What I mean by that is that vendors will usually offer discounted pricing or “volume based” pricing to clients based on the total overall volume of data that a corporation sends to a particular vendor. It is oftentimes “tiered” pricing so that the more data a company sends to a vendor, the less expensive the services become. By outsourcing one-off cases to various outside counsel, corporations are not taking advantage of this pricing structure and are therefore getting the most expensive pricing for each particular matter.

  3. Security: Law firms are not going to be as rigorous as corporations are when it comes to vetting the security protocols of a particular vendor. While most vendors do an exceptional job with the security of a client’s data, mistakes do happen and when they do the corporation is the one that will suffer the consequences and face possible sanctions and fines by the court. By having the corporation select a preferred vendor it eliminates having their data spread across numerous outside counsel locations. It’s much safer for a corporation to have their data stored with one or two vendors then it is to have it with 10-15 different outside counsel. We see data breaches all the time now happening (i.e. Target, Yahoo, the list goes on). Therefore, it’s extremely important to know where your data is and limit the number of places it resides.

  4. Lastly, corporations should partner with a vendor that is going to focus on the long term relationship with them. Not only is this important with regards to pricing and overall cost savings, but also for a vendor to become comfortable with a corporation’s data. Law firms are very transactional in nature and so they’re not nearly as concerned with the long term component of the relationship and conversely are more concerned with the particular matter at hand. When corporations take the time to select the vendor, they can implement technology and customized workflows enabling them to take control of their data and subsequently reduce their overall ESI spend.

So, as one can see there are drastic differences in the way corporations and law firms select an ESI vendor. If you’re a corporation that is currently deferring to outside counsel for this I strongly recommend you bring that decision in-house and then carefully select the vendor base on the following:

  1. Reputation of the company: There have been some significant changes in the marketplace in the last couple of years with a number of acquisitions and companies closing their doors. Make sure to check financials of the company. It’s also important to ask for 2-3 references and if possible ask for a few references in your particular industry.

  2. Review Platform: Is the vendor a Relativity provider? Relativity is currently the industry standard for review platforms. If they are a Relativity partner, are they orange level certified? This is Kcura’s/Relativity’s highest level for quality of service. How long have they been orange level certified? If it is a platform that is not Relativity, how long has that platform been around? Are the attorneys familiar with that platform? If they are not familiar with it, then what are the costs associated with training the attorneys on the non-Relativity platform?

  3. Clients: What types of clients do they work with? What is the percentage of corporations and law firms that they work with? This will show you what their culture is like. If they work predominantly with corporations, then they will most likely have technology and workflows in place geared around helping corporate legal departments manage the ever growing need for ESI.

  4. Pricing: Pricing can be very tricky as there are numerous pricing models out there. Just note that all vendors need to make a profit for their services in order to keep the doors open so while one vendor may be considerably lower for one service, odds are they are making up for it in another area. You want to select a vendor that has solid pricing, but more important has an exceptional work product (including a strong project management team) and focuses on the reduction of documents prior to review. The ESI component is only a fraction of the total overall spend for a particular matter. The review piece is where the main cost is for a corporation, so you want a vendor that focuses on helping reduce the review spend. That is done by using cutting edge technology and workflows to reduce a data set before attorney eyes are on it.

The eDiscovery vendor landscape is a confusing and oftentimes difficult one to navigate. While it may be easier and more convenient for a corporation to defer to a law firm to select the vendor, as you can see from what I’ve detailed above it’s not the best option and certainly not in the company’s best interest. By taking the power away from the law firms and making vendor selection internally, a corporation will not only see short term benefits, but a myriad of long term benefits. Ultimately, you’ll be saving the corporations thousands of dollars and streamlining their eDiscovery processes and workflows. And that is always a good thing!



Jason Penrose

About The Author

Jason Penrose has a BA from Bowling Green State University, and a JD from Cleveland Marshall College of Law. He's been an eDiscovery Consultant for 8 years. Prior to getting into eDiscovery he was an Intellectual Property Software consultant for 3 years for LexisNexis.


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