The tools to move e-discovery in house have been around for years. Only recently, however, has a narrow majority of in-house departments spent the time and money necessary to develop a dedicated e-discovery team, according to a recent survey by Exterro. According to the survey, in 2019 51% of in-house legal departments have either IT staff or legal personnel that performs e-discovery. Most companies use internal e-discovery teams for information retention and processing.
Third-party vendors still perform most e-discovery work. Going fully in-house for e-discovery takes years of ramp-up, if done correctly. Despite the problems that frequently arise when corporations bring e-discovery in-house, however, doing so can lead to cost savings and give in-house counsel a much greater degree of control over the process. But before you bring e-discovery in-house, it requires a thorough look at the costs and benefits associated with insourcing e-discovery.
It is easy for general counsel to underestimate the time and expense needed to bring e-discovery in-house. While technology continues to lower the cost, insourcing e-discovery requires investments in software, hardware, and personnel. A company may need multiple software tools, for example, which is often subscription-based. And this sophisticated software often requires investments in servers and other hardware. Finally, e-discovery requires time and expertise, meaning input from leadership, dedicated legal personnel and investments in IT. E-discovery is not something that can be done easily or without a strong implementation plan.
Despite these costs, a switch can save money. E-discovery, particularly document review, accounts for as much as 80% of litigation costs. Controlling costs associated with e-discovery can significantly affect the cost of litigation overall, as well as add a measure of predictability to the process.
Another main benefit of insourcing e-discovery is control. By keeping as much in-house as possible, companies can handle matters immediately and with greater oversight. It also reduces risk by ensuring the company itself can preserve and collect information, lessening the risk of sanctions. A dedicated e-discovery team can also dispose of outdated and unneeded information when appropriate.
An often underlooked benefit in bringing e-discovery in-house is cybersecurity. With law firms increasingly the target of cyber attacks, having information in-house allows companies to take proactive steps to ensure sensitive and confidential information remains protected. It is not that third-party vendors do not take cybersecurity seriously; it is just that anytime you can lessen the amount of duplicate data it mitigates the risk of a security breach.
While the case for moving in-house is strong, many law firms remain understandably reluctant. It is a significant investment. Further, insourcing some e-discovery, particularly document review in complex litigation, may simply not be feasible for your company.
Fortunately for those still on the fence, many companies and law firms have chosen to take this path before. A peer network can help you begin plotting your insourcing and help you avoid common pitfalls associated with this significant, and potentially lucrative, move.