Insourced vs. Outsourced eDiscovery: Offering Value in Either Scenario

Guest post 
By Andrew Bayer, CEDS
Director of Business Development, TERIS San Diego
ABayer@TERIS.com

To insource or to outsource, that is the question. 

Over the past few years, law firms and corporations alike have faced this crucial decision about handling their respective organization’s eDiscovery matters. The debate seems to be gaining even further traction, with several articles published recently by respected experts in the field of eDiscovery which utilize a combination of statistics and opinion to defend and validate both points of view.

As proponents from either side continue to defend their decisions, TERIS has remained a steadfastly neutral organization – a Switzerland of eDiscovery management, if you will. In our eyes, the value propositions remain the same:  to ensure that our wide array of services and solutions are implemented appropriately in a case-specific, consultative, and defensible manner.

In his “Five Reasons to Outsource Litigation Support,” Ralph Losey, National eDiscovery Counsel for Jackson Lewis, presents the steps he and his firm took during a nine-month investigatory process to determine whether their firm should rely on outside support for eDiscovery or bring all matters in-house. Eventually, it was decided that an outsourced approach was the best fit for Jackson Lewis and, most importantly, their clients. Losey’s list of “five reasons your firm should consider outsourcing” include:

1. A belief that the core competencies of a law firm should remain focused on giving legal advice and not providing eDiscovery services;

2. Non-legal eDiscovery services are highly complex to perform correctly;

3. The costs involved with establishing and maintaining a litigation support department can be extensive;

4. Liability and risk issues are a concern should errors occur from services conducted internally; and finally,

5. There are ethical implications with a law firm providing “law-related” services as opposed to legal advice.

Although Losey’s statements were directed toward law firms, the same concepts he presented could indeed apply to corporations as well.

Ultimately, Jackson Lewis decided to select one organization that could provide an all-encompassing eDiscovery managed services program for the firm’s needs. Similar to this arrangement, TERIS has been engaged and has subsequently established itself as the sole or preferred provider for various law firms and corporations throughout the United States. TERIS’s primary focus, when implementing a managed services program, is on project management and transparency. It behooves the clients of TERIS to have an in-depth understanding as to what might be going on behind the scenes while maintaining open lines of communications between all parties – be they in-house legal or outside counsel.

In stark contrast to Ralph Losey’s article, Bryan Bratcher (Senior Manager of Litigation Support) and Tom Baldwin (Chief Knowledge Officer) of the law firm Reed Smith, published an article which questions the utility of a firm or organization outsourcing everything. In their “6 Reasons to Insource Litigation Support,” Bratcher and Baldwin do credit Losey and his firm for certain “valid arguments as to why some firms might outsource these [eDiscovery] services,” but argue that the alternative approach, i.e., insourcing, is a better fit for their firm and potentially for many others.

Noting that eDiscovery-related expenses can constitute upwards of 18% of an organization’s total expenditures, Bratcher and Baldwin point out the following:

• Insourcing can provide cost savings to the firm’s clients through their leveraging of technology to reduce review times (they cite the RAND report which states that approximately 73% of litigation-related expenses revolve around the review process);

• The expertise of the individuals that comprise the litigation support team is generally a hybrid of people with eDiscovery experience both in the law firm and/or service provider setting;

• The institutional knowledge afforded the in-house team as they work side-by-side with the attorneys; 

• The trust that is built by attorneys working next to the same analysts that are supporting them;

• The fact that internal teams take more accountability for their work product; and finally,

• The ability to more thoroughly manage any vendors that may be utilized for specialized or overflow-related projects.

Once again, the theories and opinions expressed by Baldwin and Bratcher can also apply to those corporations that might be considering the idea of insourced eDiscovery services.

When it comes to insourcing, TERIS adds value by acting as a heavily relied upon extension of the internal litigation support teams. As Bratcher and Baldwin mentioned, there will always be a need to rely upon outside service providers under the appropriate circumstances.

TERIS is often called upon to aide in situations that organizations may not be equipped to handle. These situations might be as a result of timing, i.e., the deadline is too tight and they must rely on an operation with more throughput. Further, a need may exist for a specialized service or solution that the organization has not yet internalized. Lastly, and likely the most predominant situation, is when volume exceeds their internal capabilities. Often, firms and corporations will establish internal thresholds and anything that exceeds that will be outsourced.

In the eDiscovery industry, the insourcing vs. outsourcing question will likely continue to be debated for many years to come. What is clear is that there is no definitive answer one way or another; finding a definitive solution truly takes a long-term analysis, firm-by-firm, corporation-by-corporation, with an extensive vetting period. However, regardless of the ultimate decision, TERIS offers in-depth, experience-based managed services approaches which fit both models – a true Switzerland of eDiscovery.