New England Biz Law Update
In-house counsel at the country’s largest companies are not satisfied with the e-discovery work performed by their outside law firms, according to a legal consulting group’s recently released survey.
But because there is no simple, cost-efficient way to collect and produce electronic data, civil litigators say there is little they can do in response to the study’s disappointing results.
“So much of the frustration in-house lawyers are experiencing is inherent in the process,” said Stephen D. Riden of Beck, Reed, Riden inBoston. “Even the best positioned law firm is still going to find itself on the receiving end of complaints about the hassles associated with e-discovery. I don’t see that changing any time soon.”
As part of its far-ranging “Litigation Outlook 2013” survey, The BTI Consulting Group asked 350 general counsel and other “legal decision makers” to rate on a scale of 1 to 10 how effective they believe their outside attorneys are at handling and managing e-discovery.
A total of 59.5 percent gave grades of 6 or lower. Just 16 percent of the surveyed lawyers — who work at companies with average revenues of $15.7 billion — said their firms excel at e-discovery.
Riden said he is not surprised by the results, given the time and money that goes into producing electronic data and the lack of experience many practitioners have dealing with e-discovery.
“There is always going to be tension between what the client wants, which is minimal cost and hassle, and what the courts require, which can often be expensive and onerous,” he said. “That tension isn’t going to go away any time soon. But this survey should be a wake-up call for law firms in Massachusetts and across the country that there is an area of client services that’s badly in need of improvement.”
Jamison J. Barr, general counsel at Jenzabar in Cambridge, said law firms could generate new business opportunities if they could only position themselves more effectively as e-discovery experts.
“I thought e-discovery would be an area firms would be all over, but I’ve found that hardly any choose to focus on it,” he said. “I know it’s not something they think they can make money off of, but if firms could promote the idea to us that their services would cut down on the costs of a lawsuit, there’d certainly be room for growth.”
Results are in
BTI Principal Marcie L. Borgal Shunk said law firms should look at the in-house counsel who responded to the survey — who have gone on record expressing their dissatisfaction with their current representation — as potential clients.
An assistant general counsel at a large medical device maker states in the survey that law firms need to come up with cheaper ways to review the mountains of evidence often involved in e-discovery disputes. Another GC says firms should outsource more work to third-party vendors because many are unqualified to offer advice on technology matters.
“Most law firms are extremely inept [on e-discovery],” says one senior attorney at a Fortune 500 media company. “Most lawyers don’t want to spend the time needed that the topic requires.”
Other criticism includes poor planning, lack of experience, insufficient oversight of third-party vendors, and ineffective legal strategies to limit the scope of e-discovery requests.
Shunk said BTI interviewed the in-house lawyers between March and August.
“These are comments given directly to us by lawyers who regularly turn to outside law firms for legal help,” Shunk said. “Their comments show that there is a real opportunity for lawyers to improve the services they provide to clients and to better align themselves with their in-house counsels’ goals and objectives.”
While Shunk would not identify any of the companies or law firms involved, she confirmed that a number of them have a “significant” presence in Massachusetts.
More than 70 of the largest law firms in the country use BTI’s research and consulting services. The cost of the survey is $2,400.
Finding the fix
Riden, a commercial litigator who helps manages electronic discovery issues for clients, said he, like many lawyers, has struggled with how to best market his services.
“Clients are looking for generalized expertise, not someone who can save them a few dollars down the road on an e-discovery issue,” he said. “You’re trying to essentially make a bad experience less worse. Telling someone that you can make a $50,000 e-discovery problem a $40,000 problem isn’t generally something you can put on the front page of your website.”
Boston lawyer Matthew C. Baltay of Foley Hoag said in-house counsels’ frustration over e-discovery stems in large part from the fact that federal and state rules are set up to promote the disclosure of materials.
The difficulty is that those rules were created prior to the explosion of email and other newer forms of communication, he said.
“What we’ve seen in the past few years is a broad expansion of discovery,” Baltay said. “The problem is that the system has not yet come to terms with the fact that we generate today, in 24 hours, more communications than you might have historically done in a year. Until they figure out a way to take the huge costs of litigation away from the client, there are always going to be problems.”
James J. Berriman, CEO of Evidox Corp. in Boston, teaches an e-discovery course at Boston University School of Law.
He said a handful of large firms, such as Goodwin Procter and Ropes & Gray, have responded by setting up electronically stored information — or ESI — counsel who specialize in the law and methodology of e-discovery.
“That’s your go-to person in the firm when the case comes in that allows the firm to say to the client, ‘Don’t worry. If you come to us, we have in-house expertise on the protocols for how to do this right and how to control the costs,’” he said. “ESI counsel is a trend that is gathering steam because firms realize that having someone like that on staff is what lets them manage those cases and keep the clients. I’m sure we’ll see a lot more of it in the next few years.”
Sidebar:
In-house attorneys reveal their go-to law firms
The results of a survey recently conducted by The BTI Consulting Group in Wellesley, Mass., provide a rare glimpse into the minds of in-house counsel working at some of the largest companies in the country.
For instance, the survey reveals that spending on intellectual property litigation was the fastest growing practice area in 2012, with legal spending increasing by over 65 percent since 2006. The companies spent $400 million more on outside IP litigation counsel this year than they did in 2010.
The survey shows that spending on products liability litigation fell 17 percent over the same two-year period. In-house counsel surveyed by BTI predict an 8.5 percent drop in 2013.
Just one in four in-house lawyers report that they use the same law firm for complex and routine litigation matters, with 20.9 percent of their spending on outside counsel done under an alternative billing arrangement.
The survey also posed questions to in-house counsel on which law firms they believe are best suited to represent them in litigation. The following firms with offices in Massachusetts are among those identified either as “powerhouses” or “standouts”:
Firms best suited to help them in a class action lawsuit
Skadden, Arps, Slate, Meagher & Flom
DLA Piper
Goodwin Procter
Jones Day
Seyfarth Shaw
Firms best suited to help them in IP litigation
Jones Day
DLA Piper
Mintz, Levin, Cohn, Ferris, Glovsky & Popeo
Firms best suited to help them in securities and finance litigation
Jones Day
Skadden, Arps, Slate, Meagher & Flom
DLA Piper
K&L Gates
WilmerHale
Firms best suited to help them in “routine” employment litigation
Ogletree, Deakins, Nash, Smoak & Stewart
Jackson Lewis
Seyfarth Shaw
Littler Mendelson
Meanwhile, firms with offices in Massachusetts that they would prefer not to see as lead opposing counsel in a litigation case are:
Jones Day
Skadden, Arps, Slate, Meagher & Flom
Goodwin Procter
Robins, Kaplan, Miller & Ciresi
DLA Piper
Foley & Lardner
Jackson & Lewis
Littler Mendelson
Nixon Peabody
Seyfarth Shaw
