Category Archives: proportionality

Proportionality in eDiscovery is Ideal, but Difficult to Realize Without an Optimized Process

By John Patzakis

(Originally published October 24, 2022 by JD Supra and EDRM)

Image: Kaylee Walstad, EDRM

Proportionality-based eDiscovery is a goal that all corporate litigants seek to attain. Under Federal Rule of Civil Procedure 26(b)(1), parties may discover any non-privileged material that is relevant to any party’s claim or defense and proportional to the needs of the case. Litigants that take full advantage of the proportionality rule can greatly reduce cost, time and risk associated with otherwise inefficient eDiscovery.

While there is a keen awareness of proportionality in the legal community, realizing the benefits requires the ability to operationalize workflows as far upstream in the eDiscovery process as possible. For instance, when you’re engaging in data over-collection, which in turn incurs extensive labor and processing costs, the ship has largely sailed before you are able to perform early case assessments and data relevancy analysis, as much of the discovery costs have already been incurred at that point. The case law and the Federal Rules provide that the duty to preserve only applies to potentially relevant information, but unless you have the right operational processes in place, you’re losing out on the ability to attain the benefits of proportionality.

However, traditional eDiscovery services typically involve manual collection, followed by manual on-premises hardware-based processing, and finally manual upload to review. These inefficiencies extend projects by often weeks while dramatically increasing cost and risk with purposeful data over-collection and numerous manual data handoffs. The good news is that solutions and processes addressing the first half of the EDRM involving collection and processing are now far more automated than they were even a few years ago.

Recently EDRM hosted a webinar addressing these issues – “Operationalizing your eDiscovery Process to Realize Proportionality Benefits” – and more specifically, as the title reflects, explored how to operationalize your eDiscovery process to achieve lower costs, improve early case strategy, realize faster time to review and reduce overall legal risk.

Here are some key takeaways from the webinar:

  • A detailed legal analysis was provided highlighting the case of Raine Group v. Reign Capital, (S.D.N.Y. Feb. 22, 2022), which applied proportionality at the point of identification and collection, not just production. The court endorsed the use of detailed and iterative keyword searches to identify and preserve potentially relevant ESI.
  • A demonstration was shown on how to enable detailed and proportional search criteria, applied in-place, at the point of collection. Such a capability is key to realizing the blueprint for targeted and proportional ESI collection outlined in Raine Group.
  • The speakers also discussed how organizations should move upstream to focus on information governance to reduce the data funnel as soon as possible. The new generation of eDiscovery technology in the areas of collection, identification, analytics, and early data assessment, enables enterprises to operationalize proportionality principles.

The webinar culminated with the notion that an optimized process that applies proportionality upstream at the collection and identification stage reduces the data volume funnel by as much as 98 percent from over-collection models, yet with increased transparency and compliance. A link to the recording from the webinar can also be accessed here.

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Filed under Best Practices, Case Law, Case Study, ECA, eDiscovery, Enterprise eDiscovery, ESI, Preservation & Collection, proportionality

Proportionality Focus Presents Challenges and Opportunities for eDiscovery Service Providers

By John Patzakis

Proportionality is now the hottest legal issue involving eDiscovery, with the largest number of eDiscovery-related cases in the past year addressing the subject. Relativity eDiscovery attorney David Horrigan recently led an informative webinar “Data Discovery 2022 Mid-Year Update” (access recording here) reporting that 642 published court decisions tackled legal considerations involving proportionality in discovery in the first half of 2022. As only a very small number of cases involve a published decision that we can access online, it is safe to assume that several thousand more cases litigated the proportionality issue during this time period.

Proportionality-based eDiscovery is a goal that all judges and corporate attorneys want to attain. Under Federal Rule of Civil Procedure 26(b)(1), parties may discover any non-privileged material that is relevant to any party’s claim or defense and proportional to the needs of the case. Lawyers that take full advantage of the proportionality rule can greatly reduce cost, time and risk associated with otherwise inefficient eDiscovery.

While there is keen awareness of proportionality in the legal community, attaining the benefits requires the ability to operationalize workflows as far upstream in the eDiscovery process as possible. For instance, when you’re engaging in data over-collection, which in turn runs up of a lot of human time and processing costs, the ship has largely sailed before you are able to perform early case assessments and data relevancy analysis, as much of the discovery costs have already been incurred at that point. The case law and the Federal Rules provide that the duty to preserve only applies to potentially relevant information, but unless you have the right operational processes in place, you’re losing out on the ability to attain the benefits of proportionality.

An example of a process that effectively applies proportionality on an operational basis would be an iterative exercise to identify relevant custodians, their data sources, applicable data ranges, file types and agreed upon keywords, following the process outlined in McMaster v. Kohl’s Dep’t Stores, Inc., No. 18-13875 (E.D. Mich. July 24, 2020), and Raine Group v. Reign Capital, (S.D.N.Y. Feb. 22, 2022), and collect only the data that is responsive to such specific criterion. Both McMaster and Raine Group decisions apply proportionality at the point of identification and collection, not just production. The latest enterprise collection tech from Relativity and X1 enable such detailed and proportional criteria to be applied in-place, at the point of collection. This reduces the data volume funnel by as much as 98 percent from over-collection models, yet with increased transparency and compliance. In other words, a collection process that is targeted, automated and proportional, instead of one that is overbroad and manual.

However, traditional eDiscovery services typically involve manual collection, followed by manual on-premise hardware-based processing, and finally manual upload to review. These inefficiencies extend projects by often weeks while dramatically increasing cost and risk with purposeful data over-collection and many manual data handoffs. However, the first half of the EDRM involving collection and processing are now far more automated than they were even a few years ago. The purchasers of eDiscovery services and software have clearly noticed and are demanding adaptation from vendors, especially service providers. This new normal of proportionality focus presents a very significant challenge to many service providers.

So how can services firms adapt to this new paradigm? Here are few strategies:

First, services firms should move upstream to focus on information governance to reduce the data funnel as soon as possible. The new generation of eDiscovery technology in the areas of collection, identification, analytics and early data assessment, enables enterprises to operationalize proportionality principles. However, this ideally involves high-end strategic consulting to bring these processes together and operationalize them. This also enables services firms to develop direct and ongoing relationships with corporate law departments, IT and other key corporate stakeholders.

Second, service providers should pivot to managed services (like most other IT consultants) instead of a reactive project-based mindset. Fire drill eDiscovery projects by definition lack any process and result in data-overcollection and many other inefficiencies that thwart the realization of proportionality principles. Establishing a managed service relationship “bakes in” the service provider into an established eDiscovery workflow, including information governance, pre-collection analytics, targeted collection and integrated processing and hosting to enable far more proportional eDiscovery efforts, across multiple matters per client.

Third, services firms should find ways to develop or otherwise acquire their own differentiating tech or establish meaningful partnerships with tech platform providers. These partnerships should entail more than merely using the software, but the development of proprietary workflows or even technical integrations that enable unique service offerings that operationalize proportionality.

At the end of the day, eDiscovery is a technical process that is subject to technology disruption just like any other technology-based services industry. eDiscovery services firms that not only adapt to but embrace this change as a strategic opportunity will be the ones who prosper the most.

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Filed under Best Practices, collection, ECA, eDiscovery, Enterprise eDiscovery, Preservation & Collection, proportionality, Relativity

Relativity and X1 Publish Updated Joint Legal Whitepaper on ESI Collection Best Practices

By John Patzakis

Relativity and X1 have published an updated joint legal whitepaper addressing full-disk imaging as a disfavored collection practice in civil litigation, with Relativity eDiscovery attorney David Horrigan as the lead author. This paper is a substantive update from the original published a year ago, adding discussion of important and relevant new case law published in the past 12 months. The paper notes that “if the preliminary data from the first five months of 2022 are any indication, we may be seeing that the law of proportionality is becoming more settled — and that courts continue to disfavor full-disk imaging.”

The paper delves into all the legal reasons, including detailed analysis of case law, the Federal Rules of Civil Procedure, and the Sedona Principles establishing why forensic collection is not required in civil litigation. The paper primarily focuses on the principles of proportionality in its legal analysis as well as case law issued prior to the 2015 amendment to the Federal Rules of Civil Procedure, which gave greater prominence and clarification of the proportionality rules.

One of the recent updated cases included is Besman v. Stafford, where the appellate court reversed and remanded a trial court’s order of a forensic examination of a law firm computer, holding the trial court erred in failing to take precautions to protect the privileged and confidential information on the device. “Generally, courts are reluctant to compel forensic imaging, largely due to the risk that imaging will improperly expose privileged and confidential material contained on the hard drive,” Judge Anita Laster Mays wrote for the appellate court.

This is an important topic as a key problem in eDiscovery that drives inefficiencies and higher costs is that default collection methods often involve full-disk imaging—a forensic examination of an entire computer—when searching for responsive data. As the whitepaper notes, “it turns out full-disk imaging is not required for most eDiscovery collections. In fact, courts often disfavor the practice.”

A copy of the whitepaper can be found here.

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Filed under Best Practices, Case Law, collection, eDiscovery, eDiscovery & Compliance, Enterprise eDiscovery, ESI, proportionality, Relativity

Industry Experts: Proportionality Principles Apply to ESI Preservation and Collection

By John Patzakis

Under Federal Rule of Civil Procedure 26(b)(1), parties may discover any non-privileged material that is relevant to any party’s claim or defense and proportional to the needs of the case. Lawyers that take full advantage of the proportionality rule can greatly reduce cost, time and risk associated with otherwise overbroad eDiscovery production. In a recent webinar, eDiscovery attorney Martin Tully of Redgrave LLP, addressed how to use processes and best practices to operationally attain this goal, particularly in the context of preservation and collection. In addition to being a partner at the Redgrave firm, Tully is currently the chair of the Steering Committee of the Sedona Conference Working Group on Electronic Document Retention and Production (WG1), providing additional import to his comments on the subject.

During the webinar, Tully noted that the “duty to preserve is directly aligned with what is within the scope of discovery….so if something is not within the scope of discovery – that is its either not relevant or its not proportional to the needs of the case — then there should not be an obligation to preserve it in the first place.” Tully discussed at length the recent case of Raine Grp. v. Reign Capital, (S.D.N.Y. Feb. 22, 2022), which holds that under FRC 26(a), parties “have an affirmative obligation to search for documents which they may use to support their claims or defenses.” In meeting these obligations, the court provided that a producing party may utilize search methodologies, specifically mentioning search terms. Tully explained that the court—in addressing the concept of reasonable, proportional discovery under the Rules – provides that producing parties are obligated to search custodians and locations it identifies on its own as sources for relevant information as part of its obligations under Rule 26, but that such identification and collection efforts should be proportional.

Further to these points, Tully weighed in on overbroad practice of full-disk imaging, noting that it should not be the default practice for eDiscovery collection: “Too often there is a knee jerk approach of ‘let’s just take a forensic image of everything – just because.’” According to Tully, alternative and more targeted search and collection methods were more appropriate for eDiscovery and can better effectuate proportional efforts: “Indexing in-place is key because it doesn’t just preserve in-place and reduce costs, but it can give you insight (into the data) to further justify your decision not to collect it in the first place, or if you need to, you are in much better shape to go back and collect the data in a tailored and focused way.”

Co-presenter Mandi Ross, CEO of Insight Optix also provided keen insight, outlining her typical workflow applying the aforementioned proportionality concepts through custodian and data source ranking and keyword searching performed in an iterative manner to identify key custodians, data sources, and the potentially relevant data itself. To effectuate this, Mandi noted that the enterprise eDiscovery collection and early data assessment process should enable a targeted, remote, and automated search capability, with immediate pre-collection visibility into custodial data.

In fact, both Tully and Ross emphasized in their comments that none of the cost-saving, targeted collection efforts permitted under the Federal Rules can be realized without an operational capability to effectuate them. Ideally, the producing party can employ a defensible, targeted, and iterative search and collection process in-place, prior to collection to effectuate the proportional discovery process approved by the court in this decision. However, without such a capability, the alternative is an expensive, over-collection effort, where the data is searched post collection. Enabling the search iteration and targeted collection upstream brings dramatic cost savings, risk reduction, and other process efficiencies.

A recording of the webinar on proportionality can be accessed here.

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Filed under Best Practices, Case Law, Case Study, eDiscovery, eDiscovery & Compliance, Enterprise eDiscovery, ESI, Information Management, Preservation & Collection, proportionality

Post Pandemic, Corporate eDiscovery Undergoes a Permanent Paradigm Shift

By John Patzakis

While the pandemic disrupted the workplace during its height, it is now becoming clear that a more permanent transformation has taken place. Employees and their electronic information assets are far more geographically dispersed. This is requiring corporate legal departments to rethink how they conduct eDiscovery, as the old model based upon data over-collection is no longer tenable. Instead, corporations are favoring a more targeted approach to ESI collection.

Industry analyst Greg Buckles of the eDiscovery Journal recently provided a good analysis on this topic:

“The sheer volume of raw custodial collections has put pressure on discovery professionals to use an iterative selective collection strategy. That puts the corporate legal team closer to scoping and collection activities than most have been. For too long corporate legal has felt uncomfortable pushing back on overly burdensome or broad discovery requests from opposing or retained counsel. The recent development of proportionality frameworks, guidelines and tools has the potential to empower corporate legal to make defensible cost-risk arguments.”

Buckles further observes that “some of my clients have drastically cut their eDiscovery related expenses through these kinds of initiatives.” He terms this as a “grand enterprise reboot” that “brings (corporate legal) to the table with a fresh perspective.”

Most core eDiscovery costs (outside of attorney review) stem from over-collection of ESI. While direct collection costs can seem inexpensive, law firm Nelson Mullins notes that “over preservation tends to have its own costs relating to storage of large amounts of electronically stored information (ESI) and the resources needed to manage it; leads to increased downstream e-discovery costs associated with collection, processing, and review.”

As outlined by Buckles, proportionality-based eDiscovery is an important principle that all corporate attorneys should be leveraging. Under Federal Rule of Civil Procedure 26(b)(1), parties may discover any non-privileged material that is relevant to any party’s claim or defense and proportional to the needs of the case. However, attorneys representing enterprises are essentially flying blind on this analysis when it matters most. Prior to the custodian data being actually collected, processed and analyzed, attorneys do not have any real visibility into the potentially relevant ESI across an organization. This is especially true in regard to unstructured, distributed data, which is invariably the majority of ESI that is ultimately collected in a given matter.

If accurate pre-collection data insight were available to counsel, that game-changing factor would enable counsel to set reasonable discovery limits and ultimately process, host, review and produce much less ESI. Counsel can further use pre-collection proportionality analysis to gather key information, develop a litigation budget, and better manage litigation deadlines. Such insights can also foster cooperation by informing the parties early in the process about where relevant ESI is located, and what keywords and other search parameters can identify and pinpoint relevant ESI.

A solution to these challenges is the utilization of index and search in-place technology. Indexing and search in-place in this context means that a software-based indexing technology is deployed directly onto file servers, laptops or even in the cloud to address cloud-based data sources. This indexing occurs without a bulk data transfer of the data. Once indexed, the searches are performed in a few seconds, with complex Boolean operators, metadata filters and regular expression searches. The searches can be iterated and repeated without limitation, which is critical for large data sets.

But it is important that the technology employed truly enables index-in-place, with the indexes deployed directly onto the laptops, file shares or cloud servers where the data exists. Some providers will market their tools as such, but the indexing and searching actually takes place in their platform at a central location. Data must first be copied and collected off of laptops and file servers and migrated over the network to get the indexing engines. This does not scale for eDiscovery. For information about X1’s index-in-place technology, X1 Enterprise Platform, please visit us here.

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Filed under Best Practices, collection, compliance, eDiscovery, eDiscovery & Compliance, Enterprise eDiscovery, ESI, Preservation & Collection, proportionality