Internalizing & Off Shoring Information Management

Lessons Learned from Internalizing and Off Shoring the Management of Information [Internalizing means moving information management responsibilities inside your in-house legal department. Off shoring means using vendors who handle the work outside the US. While this session was primarily focused on eDiscovery and document review, the lessons are useful if you are rethinking how to handle information management more generally for your law firm or law department.]

Panelists:

  • Theresa Beaumont, Global Policy on eDiscovery, Google
  • Cathy Hasenzahl, Assistant GC (Document Review), JPMorgan Chase
  • Stacie Neeter, Huron Consulting Group (Moderator)

[These are my notes from LegalTech NY 2011.  Since I’m publishing them as soon as possible after the end of a session, they may contain the occasional typographical or grammatical error.  Please excuse those. To the extent I’ve made any editorial comments, I’ve shown those in brackets.]

NOTES:

  • Discussion Topics — (1) steps to manage information after the program is in place; (2) how an internalizing or off shoring program affects staff; (3) what works and what doesn’t with respect to reducing costs?
  • Off Shoring — What should you consider first? Be sure to vet the process of the vendor — how do they manage confidential information, who is on the project team, what is their work process, how do they ensure quality? Ask for customized reports from the vendor so that you don’t have to struggle to determine if your cost/risk/benefit balance is appropriate. If possible, go to India to meet the team and inspect the facility. Alternatively, be sure that the vendor’s senior project management team meets you in person here.
  • Internalizing — What should you consider first? Take a close look at some prior cases with a variety of vendors to get a good handle on the process and cost. Understand the extent to which your external law firm has brought efficiencies to the process. To help keep internal staff engaged, collect metrics that show progress (or lack of progress).
  • How to Ensure Quality of Off Shored Work? JPMorgan Chase has senior attorneys who review the work of the vendor. They regular sample and test work product during the course of the project. They also provide a sample set to outside counsel as a means of calibrating the review. In addition, make sure you understand exactly what the vendor does to ensure high quality work product. (Thus far, they have found the quality to be excellent.) Make yourself a key part of the vendor’s team and process. Be available for questions from the team. Don’t just “throw documents over the wall” and then wait for the final work product.
  • Ensuring the Quality of the Internal Review Team — compare the results of the internal group against the results of closed cases. In addition, try to keep external counsel engaged. They can help assess quality and provide guidance.
  • What’s the Business Case for Using Internal Review, External Review or a Hybrid? Theresa Beaumont believes that most companies use a hybrid model where some of the data is reviewed internally and some externally (either by vendors or outside counsel). She did not think there were many (or any) vendors who could do it all. The decision to use internal versus external resources is situation specific — it depends on time, effort and cost constraints.
  • Role of Outside Counsel — Be sure you know the major players among the vendors and what technologies are most effective. Clients look to their counsel for advice. Equally, clients have a greater level of comfort working with law firms that are conversant with the process and how to adapt to the client’s preferred way of working.
  • Establishing Cost Savings — Metrics are key. If you are able, assign an analyst on your team to scrutinize the vendor reports to ensure the cost savings are materializing as promised. To the extent necessary, ask the vendor to customize reports to make this easier for your team.
  • Budgeting for Individual Matters — JPMorgan Chase has developed a spreadsheet that allows them to track the costs of each matter. This helps them balance costs against probable risk and encourages them to respond in a proportional matter. Some companies use a cost dashboard so that in-house counsel have a quick overview of each matter.
  • Have a Plan B — be sure you understand the possible contingencies related to your off shore or internal program and have a Plan B to handle each contingency should it occur. You should assume that you will need Plan B.
  • Optimal Vendor Relationships — the most important factor is TRUST. The vendor should communicate clearly and well. This is particularly true when problems arise. In the event of a mistake, the vendor should communicate promptly both with respect to what happened and how they are going to fix it. In addition, it is important that vendors are clear about their limitations so that the client understands when additional resources will be necessary. Other key factors are TRANSPARENCY with respect to the bills and clear ACCOUNTABILITY for delivering services as promised. Of course, all of these relationship factors apply to outside counsel!
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