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Q&A with Casey Flaherty on Tech Audits and eDiscovery

Casey, welcome to True North. Thanks for taking the time to answer some questions about your tech audit concept and e-discovery.

Your “tech audit” concept has gotten quite a response in the legal community. Even if there’s disagreement about actual audits, it has at least nudged firms to consider how efficiently they do their work—and who’s paying the price.

Did anything surprise you about the nature of the conversation that your audit sparked, and do you think firms are getting the message you intended?

I was taken aback by the urge to turn the perfect into the enemy of the good. The audit targets one discrete issue—lack of competence with common technological tools. Admittedly, this is not the most important topic in the world. Thus, I got a lot of arguments along the following lines:

Major Premise: X is the most important issue facing the legal issue
Minor Premise: the audit does not address X
Conclusion: the audit is a waste of time
Major Premise: X is the most important thing that lawyers do
Minor Premise: the audit does not address X
Conclusion: the audit is a waste of time.

I, for example, test whether lawyers know that common software can Bates stamp an entire population of documents. Bates stamping is certainly not the pinnacle of legal work. But it is something that has to be done all the time. It is this routine, low-value-added work with which the audit is concerned. Yet, lawyers seem offended that I am even asking about something so beneath them:

“There is no need to charge a client $250+/hr for me to put page numbers on a stack of documents. I will do the substantive document review,prepare the written responses to the document requests, etc. My secretary or paralegal can do the photocopying and numbering. If a firm has the resources (and I recognize that not all do), I maintain that this would be the proper way to handle such tasks. If you feel otherwise, you should let your clients know.”

The attorney entirely misses the point: no one should be photocopying and numbering the documents; the software handles it. Who spends a few seconds clicking the button is immaterial. As presented, the attorney’s clients would still be billed directly for the unnecessary copying and paralegal time. Moreover, the unnecessary overhead (i.e., secretary time, printing costs) would ultimately be passed on in some fashion (e.g., higher rates). That the attorney did not recognize this is stunning.

Indeed, I was struck by the apparent pervasiveness of the beliefs that lawyers (a) don’t do grunt work and (b) have no responsibility to learn enough so as to ensure that said grunt work is being done efficiently.  The former does not comport with my own experience as a junior associate, nor with the similar stories I’ve heard from the junior associates that I’ve worked with or had as friends at other firms.  It also does not seem consistent with all the data on associates being the unhappiest job in America or the endless stream of news that law firms are cutting back staff (those who are supposedly doing the labor-intensive, low-value-added work) because “First-year associates need something to do.”

And the math just doesn’t work. How does one secretary handle all the busywork generated by five to eight attorneys? The theory seems to be that, unlike attorneys, staffers possess an innate technical savvy and are already operating at maximum technological efficiency. Again, this does not comport with my own experience with secretaries who had been at the firm for decades and, even more than the lawyers, resisted new ways of doing things. There are technically savvy staffers—just as there are technologically proficient lawyers—but I don’t know what justifies the presumption of efficiency.

Delegation is a hugely important issue. How work is distributed between attorneys and their staff has a profound impact on total spend. But so, too, does the efficiency with which the work is performed. Lawyers are under an ethical obligation to be competent with technology and to properly oversee the work they delegate.

Corporations now create and receive almost all of their information electronically, which has changed the nature of client discovery obligations over the past decade.  Do you think the average lawyer has kept up with the implications?

No. I don’t think the average attorney has kept up. But I don’t think it would be practical for the average attorney to keep up. In the world of Big Data, e-discovery is the province of experts, not dilettantes. As opposed to the minimum technological threshold I check for with my audit, I don’t believe all attorneys can, let alone should, handle electronic discovery. The failure to recognize this is the source of much pain. Attorneys, especially commercial litigators, see themselves (accurately) as sharp, diligent, adaptable, and quick on the uptake. But some substantive areas of law are so complex—e.g., bankruptcy, patent, tax—that generalists should know enough to recognize the need to call in an expert. I don’t think the average attorney is even at that level. I think the average attorney is scared of e-discovery. But, unfortunately, their response is to put their nose to the grindstone and try to muddle through. I understand the urge. I’ve certainly done my share of that. But it is not good for the client, the attorney, or the profession.

Despite the information that is available via studies like TREC Legal Track, blogs, CLE’s and other press outlets, it’s clear—even through comments from the bench – that many companies and law firms still don’t understand the complexities of modern e-discovery. Do you think it is generally understood that there are technology-enhanced methodologies and efficiencies of scale that can both reduce cost and risk?

I don’t think it is generally understood. I think it is recognized in specialist circles. It will probably take a few more years to percolate out into the general legal consciousness.

I think companies are busy putting out fires. So they do what has “worked” in the past.Very few companies have the bandwidth to handle their existing demands while also exploring, experimenting with, and overseeing the transition to new ways of doing things.

There are certainly financial incentives for incumbent vendors to try to maintain the status quo. But the e-discovery industry strikes me as too dynamic and the client/firm/vendor relationship as too fluid for that to be a really convincing explanation. Rather, it seems to me that change is occurring. Or, per Mr. Gibson, the future is already here, it just isn’t evenly distributed. For those of us close to the change, it seems painfully slow and uneven. But from the outside, it probably seems like e-discovery is developing at an unsustainable clip.
Do you think most companies consider it their responsibility to vet the e-discovery competencies of a law firm they might engage to do their litigation?

No. I don’t think most companies consider it necessary to vet the e-discovery competencies of the firms they engage to do their litigation. I consider this a mistake. I don’t think it is wise to presume that just because someone maybe a crackerjack anti-trust attorney that they, their team, or their firm are proficient with ESI.

Indeed, we don’t vet our litigators for their ESI acumen. Instead, we have retained national e-discovery counsel. They are helping us systematize our e-discovery efforts internally, and they associate in on any litigation with an appreciable ESI component.

To the extent lawyers are savvy about e-discovery at all, there is often a misperception that doing e-discovery “better” is more expensive.  We know from studies like TREC that it is important to look not only at the ability to identify relevant information but also eliminate unneeded information.  Doing this well takes expertise. When lawyers spend their time and their client’s money looking at non-relevant information, it is a waste of client resources that can far exceed the cost of a good search.  What do you think are the biggest obstacles that firms need to overcome in order to recognize that expertise is a necessary part of the e-discovery process? 

Hubris. Discovery used to be something that any general litigator could manage. It isn’t anymore. That has to be hard to accept for attorneys who have been litigating for 20 or 30 years. I don’t care where the expertise comes from as long as my cost and risk come down.

Might your tech audit idea have applicability in the context of e-discovery?  

We plan on having several e-discovery modules as part of the automated audit. But those are in the early stages, and I am not really prepared to go into them in detail.

D. Casey Flaherty is corporate counsel at Kia Motors America, Inc. where he oversees dealer-related legal matters and electronic discovery. Casey regularly writes and speaks about the audit, legal technology, electronic discovery and other topics. The opinions he expresses are his own and not those of Kia Motors America, Inc.


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