Saturday, July 26, 2008

The "American Rule" proposition...

There has been much discussion surrounding cost shifting and the burden of costs with regards to e-discovery litigation based on the premise that the defendant typically bears an unfair burden of expense during discovery. The underlined rules of civil procedure simply state that one must bear their own expense to prepare a suitable presentation of the facts. Additionally, during discovery should a request for discovery be of such that is not reasonably accessible; one must show fact of the undue burden to present such information while proposing that the demandor should incur all fees associated to seek facts as requested (by order of the court).

In an earlier post the discussion focused on the growth of e-discovery in litigation and the responsibility of litigators to prepare with prudence - "Early Case Assessment". As the standards for managing the litigation lifecycle continue to evolve we must also take into account the need to openly educate without expectation. The latest Socha-Gelbmann survey results were leaked this week highlighting the achievements of companies on various levels for providing services and solutions focused on e-discovery and litigation support. The recognition is solely based on the opinions of few that have taken time to conduct extensive research in evaluating companies to compile a list of those making a difference in the industry. The privilege of making the list for the recipients is that one can now spend marketing dollars promoting their success on a global stage.

Just as litigation support service and solution providers are recognized for their achievements, litigators also work to be recognized in the same capacity. Most often litigators work extremely hard beginning with law school to create such a distinction from the next litigator with the hope of building a practice. In the path of becoming the Partner a litigator is subjected to obtain an annual number of credits for legal education; most often the credits are not fully acquired until the week of the deadline. Why so?...are billable hours so far more important?

Cost shifting...Industry Leadership Awards...Continuing Education

One would think that these concepts would be somewhat relative. Especially when you consider that with the level of talent that is recognized annually, someone would have figured out how to balance the weight of education and litigation expense to create a new paradigm. The one who does is truly deserving of the leadership award.

Oddly though, there are several SaaS providers that have made strides in the ability to effectively perform fact finding during discovery using sophisticated tools that eliminate the human factor once associated with massive paper based discovery or hardcore forensic collections of years past; which ultimately reduce burden and expense for the service provider. It is too often a client or litigator hears "...our rates are competitive with the market and we can be more aggressive if needed later...". Yet another "American Rule".

This industry of litigation support is the fastest growing today without any regards to the economical troubles of the day in which we live. People bring suit against another more often when the economy is in a down turn. It is not uncommon to see, post litigation, where the fees have been so astronomical that corporations and/or individuals have been forced into bankruptcy (or worse) in the course of providing facts to substantiate an argument.

Before propounding litigation or at the notice of litigation one must seriously consider the risks associated. Especially for the choice of representative counsel and litigation support service provider. Choosing the award winner, in haste, will most likely end up costing more without having any value-add (see previous post "Where is the value-add in litigation?; bigger is not neccesarily better...").

Still today, the Gordon Gekko ("Wall Street, 1987") rule continues to take precedence "...greed is good..." along with the notion of "...what they don't know won't hurt'em..." will keep the cost of litigation on a "competitive" plain. As long as we only educate when its convenient; being cautious not to over educate.

In short, cost shifting needs to occur throughout the entire process of litigation readiness. Emergining SaaS solutions are proving to reduce internal expenses for the litigation support providers for collection and preservation; litigators benefit as they are able to review smarter and faster which should reduce billable hours associated with discovery preparation and planning; clients reap the benefits by incurring less expense to produce responsive documents.