Canadian Lawyer InHouse

MAY 2017 18 INHOUSE extremely sophisticated and know what they are doing. I also have clients where we've had the conversation where they say they are doing it themselves and a week lat- er it comes back to us," says Glover. "They want to understand the process. It's pretty hard to challenge a bill from a vendor when you don't understand what they're doing." In one instance, Glover recalls, a client had three different IT systems and they knew they weren't organized. They ended up over-collecting for a fi le she says really didn't warrant it. So why is more e-discovery work going to the outside law fi rms? "I think because there is so much data to deal with and I think they're [in-house] overwhelmed," says Glover. One client sent her a three-terabyte hard drive. "They don't have the tools to defen- sively fi lter that data," she says. Grimaldi says law fi rms have done "a great job" over the years of being a "one-stop shop" and, as they realize how important the e-discovery piece is to the litigation fi le or regulatory investigative fi le, they want to make sure they remain a central piece of that solution. "There are a lot of software solutions out there creating a compelling value proposi- tion for in-house counsel to go directly and deal with it," he says. "I think, frankly, very few law departments are going to be well equipped to manage that exercise even with some of these AI-based tools — it's always going to be important to have the law fi rm play some role in that process," he says. Timothy Morgan, a litigator at Speigel Nichols Fox LLP predicts in the next fi ve years a computer will do "a better job than a young lawyer" at fi nding relevant docu- ments and that will change the role of law- yers in the proces. "Humans can help set up parameters for the computers. There needs to be a matching of computers and e-discov- ery lawyers who know what the computers can do," he says. He is also a believer in following best practices. "Just as a house needs mainte- nance you need a good document retention process — that helps when litigation arises. Not having a handle on electronic data can have huge effects." Proof that the law fi rms are locking in on the need to provide greater services in this area, in January, McCarthy Tétrault LLP acquired e-discovery law fi rm Wortzmans so they could have a more complete offering. Fasken Martineau DuMoulin LLP aligned with PwC and Borden Ladner Gervais LLP announced in December they were offering e-discovery services using technology sup- ported by KPMG. "Law fi rms started to realize they were being cut out of the loop and I don't just mean from the business perspective," says Martin Felsky, national e-discovery counsel at BLG. "The client and vendor were making decsisions on how a project should be managed and lawyers were after thoughts. Outside counsel were saying, 'Hang on, we're not even sure we can do our job properly if everything is getting outsourced and lawyers across the world are reviewing documents we should be reading.'" Firms decided there had to be a way to get back in the game using best practices. Wortzmans founder Susan Wortzman is now an equity partner at McCarthys and Wortzmans is a division of McCarthy Té- trault. Her fi rm also retained the right to operate independently for other clients. McCarthys now has a greater ability to host and store the data, do the processing and conduct the review. Wortzman says there are two approaches in-house counsel will generally take. She has several clients who just say, "This isn't within my expertise, get it out of my door and how much can I hand over to Wortzmans/McCarthys? Others want to do as much as they can in-house. I think a lot is going out the door. "Most clients now want to self-collect be- cause it's with their IT department. They aren't comfortable letting third parties into their infrastructure where they may have confi dential information and it's easy for their IT department," says Wortzman. Other large organizations are bringing some review tools in-house behind their fi rewall or opting for managed review ser- vices from vendors. "They do the collection and processing themselves, they will de- duplicate data, they will run search terms, some subject matter expert review, predictive coding and analysis, then say to the law fi rm at the end of it all, "Here is what you can have for the litigation. "They are two very different approach- es," says Wortzman. "A large factor is what their spend is on e-discovery. Another is the comfort level and expertise of the in- house counsel — if they think their team can manage it." There is also the privilege issue, which is best maintained by having an outside law fi rm continue to play the role of some kind of conduit for the exchange of information, says Grimaldi. "That's the other compet- ing interest against having everything done purely in-house." For Grimaldi, it also depends on the size of the matter. For a small regulatory investigation where a government agency is requiring the disclosure of certain email documents or other correspondence, it may be a lot easier to deal with that internally. But for complex litigation, it's going to be tough for fi rms to not be involved. Grimaldi once dealt with a regulatory investigation relatively small in scope and targeted. "It was straightforward for us to partner with an e-discovery fi rm directly to manage that data-gathering exercise. They had some very sophisticated tools that allowed us to get through the investi- gation quickly," he says. "It was a very dis- crete, one-dimensional investigation where it was clear what they were after. Frankly, I think the fi rms would say they get better-quality work as a result of it because the data they get is vetted, so less time and energy has to be spent culling out data that is irrelevant and useless because that exercise has already been done. The fi rms we have the best relationships with see this as complementary to what they're already doing. MELANIE SCHWEIZER, Bell Canada

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