The Top Hot Topics in eDiscovery

Episode Notes

Transcript

Digital Detectives

The Top Hot Topics in eDiscovery

11/18/2016

Intro: Welcome to Digital Detectives, reports from the battlefront. We will discuss computer forensics, electronic discovery and information security issues and what’s really happening in the trenches, not theory, but practical information that you can use in your law practice, right here on the Legal Talk Network.

Sharon D. Nelson: Welcome to the 73rd edition of Digital Detectives. We are glad to have you with us. I am Sharon Nelson, President of Sensei Enterprises.

John W. Simek: And I am John Simek, Vice President of Sensei Enterprises. Today on Digital Detectives our topic is The Top Hot Topics in eDiscovery.

Sharon D. Nelson: Before we get started I would like to thank our sponsors. We would like to thank our sponsor SiteLock, the global leader in website security solutions. Learn more at  HYPERLINK “http://www.sitelock.com/legal/digitaldetectives” sitelock.com/legal/digitaldetectives.

We would also like to thank our sponsor PInow.com. If you need a private investigator you can trust, visit  HYPERLINK “http://www.pinow.com” pinow.com to learn more.

John W. Simek: We are delighted to welcome as today’s guest Doug Austin. Doug is the Vice President of Professional Services for CloudNine, managing professional services consulting projects for CloudNine clients. Overall, he has over 25 years experience providing legal technology consulting, technical project management, and software development services to numerous commercial and government clients.

Doug is also the editor of the CloudNine sponsored eDiscovery Daily Blog, which has become a trusted resource for eDiscovery news and analysis, and is the only publication that is an EDRM Education partner. Thanks for joining us today Doug.

Doug Austin: Thanks for having me. I am a big fan of your work and your podcast and delighted to be a part of it.

Sharon D. Nelson: Well, it’s funny you should say that, because I was about to say what a big fan I am of your blog, but then you already know that, because I have mentioned it before.

Doug Austin: And likewise of yours.

Sharon D. Nelson: Thank you Doug. You have written several times in your blog recently about automation as an emerging trend in eDiscovery, even going so far as to declare that automation is revolutionizing eDiscovery. Why do you think that automation is such a strong emerging trend?

Doug Austin: Well, when you think about it, automation eventually impacts most industries in some way or another. If you take, let’s say, the movie rental industry, 12-15 years ago to rent a movie you typically had to drive to a movie store, like Blockbuster. You had to hope that the movie you wanted to rent was there, and you had to stand in line to rent your movie.

But today, in the form of automation the ability to stream movies directly to your desktop or TV, be it providers like Netflix or Amazon, has matured to the point that it has not only displaced the market leaders like Blockbuster, it has actually made those movie rental stores obsolete.

If you take online shopping, and you think of Black Friday, the biggest in-store shopping day of the year, which is coming up in a couple of weeks, you may not realize that on last year’s Black Friday online sales actually still outpaced in-store sales for the biggest shopping day of the year.

If you look at the eDiscovery industry, to take a look at the trend toward automation, I think it’s first important to look at the drivers behind the trend. Here’s one indicator. In the most recent eDiscovery Business Confidence Survey conducted by Complex Discovery this summer, 168 survey participants responded to the question, what is the issue that you feel will most impact the business of eDiscovery over the next six months? The top three responses were increasing volumes of data, budgetary constraints, and lack of personnel.

So with those concerns at the forefront, it’s understandable that practitioners out there would consider automation to help address those concerns, as long as that automation is efficient and cost-effective.

So with that in mind, automation has already been making an impact for some time in eDiscovery. It’s hard to believe that it’s almost already nearly been five years since Judge Peck’s ruling in the Da Silva Moore case approved the use of Technology Assisted Review. And Technology Assisted Review or TAR had been in use for some time before that.

Now we have got over two dozen cases that have approved its use, and who knows how many other cases where it has been used that haven’t resulted in case law to document that approval.

The same artificial intelligence and machine learning technology that drives TAR, and that same technology that’s also being used by Amazon, Netflix, Pandora and others to predict what we want to buy, view or listen to is now being applied to information governance to address the problem of increasing volumes of data.

(00:04:51)

Data within organizations is doubling about every 1.2 years, but budgets can’t possibly keep pace with that. So today’s solutions need to continue to provide the latest in discovery automation technology to keep costs more manageable and predictable. And the emergence of SaaS automated platforms in the market is also shaking it up.

The end result really for the consumers out there is more options than ever to really apply automation technology to make their job easier.

John W. Simek: Well, Doug, I am glad you mentioned TAR, because recently there’s been a lot of debate over the state of Technology Assisted Review. And I remember jeez, probably back in the early days, TAR and TAR 1 and 2, and now we are hearing all this speak about 3 and 4. Where do you think TAR stands today in terms of the technology, and also what about its acceptance within the legal community, do we still have people pushing back on that?

Doug Austin: We do. I will talk about acceptance first. Even though TAR has been accepted in the courts for a while now, that doesn’t mean it has been widely accepted in the industry just yet.

According to Gartner in their Market Guide for E-Discovery Solutions that was issued back in June, the estimated rate of adoption for predictive coding among enterprises is only about 10-15%, while adoption within the service providers trying to sell them those solutions may reach 50-60%. So the people buying aren’t embracing it as much as the people selling it, at least yet.

A couple of months later Gartner, again, also published the 2016 Edition of its Hype Cycle Chart, where machine learning was one of the technologies that is expected to be “the most disruptive class of technologies over the next 10 years”.

But machine learning is also currently at the peak of inflated expectations in Gartner’s Hype Cycle. So a lot of people appear to be expecting more from machine learning technologies, including TAR than it’s currently delivering.

Why is that? It could be that despite Judge Peck’s statement in Da Silva Moore that TAR is not a Staples-Easy-Button, appropriate for all cases, that attorneys still expect it to be easier than it is.

A lot of people focus on the first and third letters of the TAR acronym, Technology and Review, but it’s the second letter Assisted, which may be the most important one.

TAR technology can be amazingly powerful, but it’s still just a tool, and in the hands of someone who doesn’t know what they are doing not a very effective tool. There’s also still considerable disagreement about the technology among industry experts. All of whom I have great respect for, but many of them don’t necessarily agree with each other.

Some advocate, as you have mentioned, TAR 1, 2, 3, advocate a particular TAR approach in all instances, while others assert that a different TAR approach may be more effective when you don’t plan to review all the documents identified as responsive.

There is also disagreement on how to measure the effectiveness of TAR. A couple of weeks ago at The Masters Conference, on a panel that I spoke on with Bill Dimm of Hot Neuron; he spoke about the ineffectiveness of the F1 Score, and he said, which I thought was pretty funny, that the F1 Score is like herpes, you can’t get rid of it. Yet others still swear by it and it’s still out there. So a lot of people don’t think it’s great, but some people do.

There are also people who believe that keyword searching is ineffective and has no place in the process anymore; while others believe, and I am one of them, that keyword searching when executed properly with testing to validate the results is still an appropriate mechanism for cases, even when it’s used in combination with the TAR approach.

So we really don’t agree on the technology to use, the approach, or how to measure the results, but other than that we pretty much all agree.

I think it’s also probably important to note that I think debate and disagreement is not necessarily a bad thing. I think it leads to better solutions and approaches, as long as it’s constructive.

There’s the saying, I may rub you the wrong way, but at least you are getting rubbed. I think it’s important for each of us to consider viewpoints from others constructively and respond constructively, and I think if we do that, that it helps us all move better and together in the right direction.

John W. Simek: Is the rubbing thing a Texas phrase, Doug?

Doug Austin: Yeah. I am not sure where that came about and I will leave it at that.

Sharon D. Nelson: Good. But we agree with you on the subject of keywords, it’s still valid, it still works, and particularly in cases which don’t justify the use of TAR. So we are with you on that.

I know that you have also mentioned the emergence of SaaS automation solutions as a key automation trend. Why do you see it as an emerging trend and what impact do you think it will have on the legal community?

(00:09:48)

Doug Austin: Well, once again I will point to that Gartner Report, which noted that cloud eDiscovery solutions are gaining momentum in the market with their ease of use and more competitive and straightforward pricing structures. A big component to the ease of use idea is self-service automation to simplify the data loading and processing component, which as you know has historically been a much more manual process.

I think they say if you want to know where a market is heading, it’s good to follow the money. When you follow the money in the eDiscovery market, you see that we have begun to see significant venture capital investment in upstart eDiscovery providers such as Logikcull and Everlaw, and we have also seen emergence of other providers, like ourselves, CloudNine, that embrace SaaS and self-service model.

So then, where does that leave the established big boys, are they taking that line down? No, actually we have seen some of those larger providers like kCura, Ipro and Thomson Reuters recently announced their own SaaS automation initiatives. So really when you see all those investment dollars flowing towards self-service SaaS automation, it’s clear that automation capability is beginning to change the market in a big way.

And I think that impact is extending throughout the market, even to the small and solo law firms. Many attorneys and firms large and small have at some point had data dumped on their desk around 5 o’clock on a Friday, with instructions to get review started over the weekend, and up till now to do so you pretty much had to call your lit support department, if you had one, or play phone and email tag with your eDiscovery processing vendor.

Once you eventually got in touch, you had to fill out forms, get the data to the provider, and hopefully get the data loaded in time to at least get started on the review at some point during the weekend. That wasn’t really a lot of fun and you were dependent on others to get your review started.

Now, you can sign up for a free account and answer a few simple questions in a wizard-based interface to upload your data. Then, an automated processing begins to process your data and you go home and you wait for an automated email to tell you that your data is processed and available, and you probably get a good night’s sleep too while waiting.

Once it’s complete, you can then log in. You can begin filtering out duplicates and clearly non-responsive documents, and begin review on the remaining potentially responsive documents, and you never needed assistance from anybody to get to this point.

That’s just one way how Saas automation technology can simplify the discovery process and it could ultimately be the disruptive innovation I think that could really shake up the market.

John W. Simek: Well Doug, you have been talking about a lot of factors here with all this processing and eDiscovery in general, but where do you think attorneys are today in just embracing technology, period?

Doug Austin: Well, I was speaking at a CLE for the State Bar of Texas last Friday and Craig Ball was there, and he likened the pace at which attorneys are adopting technology to melting of the glaciers.

Then he added that actually —

Sharon D. Nelson: The glaciers are melting pretty fast.

Doug Austin: Because of global warming the glaciers are actually melting faster than attorneys are adopting technologies. So I thought that was pretty funny.

Sharon D. Nelson: Craig is always funny.

Doug Austin: Yeah, yeah, Craig has always got a good line or two.

But I do think we are seeing more and more of a push for attorneys to adopt the technology with an emphasis on their ethical duty to do so. ABA Model Rule 1.1, with regard to competence, has had Comment 8 for sometime which states that a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.

Then last year California issued Formal Opinion 193, which stated that attorney competence related to litigation generally requires a basic understanding of issues relating to eDiscovery, including the discovery of ESI, and indicated that an attorney lacking the required competence has three options: learn it, associate with technical consultants or competent counsel that know it, or decline the client representation.

Now we are seeing about half the states adopt some sort of similar ethical requirement or guidance regarding technical competence, including Florida, which recently also bumped up the three year CLE requirement from 30 to 33 hours, with three of those hours in an approved technology program.

So I think I am more optimistic than ever that the push will continue from the state bars for attorneys to understand technology, and the technology, thanks to the automation trend, is continuing to become easier to use. Hopefully we are meeting somewhere in the middle and the outlook is bright. That’s my hope anyway.

Sharon D. Nelson: Since we are running a little bit short on time, can you tell us quickly what other trends you see in eDiscovery today?

Doug Austin: Sure. Well, one trend I think is I think we can finally all agree that the provider market is consolidating. If you look at a short list of notable providers that have been acquired just this year it includes people like Orange Legal, Kiersted Systems, Content Analyst, Recommind, Stroz Friedberg and Kroll Ontrack.

If you go back last year you had names like Huron Legal, Merrill and Equivio, a number of these are being acquired by investment groups or by companies which have received considerable investment from those groups. For example, Consilio, which received funding from Shamrock Capital and then proceeded to make a number of acquisitions. So I think it’s another indication of seeing a number of the investment dollars flowing in.

(00:15:14)

I think another potential trend is due to the most recent changes in the federal rules that were adopted last December. Certainly I think with regards to Rule 37(e), we are seeing some indications. One case from a couple of months ago, Shaffer v. Gaither, where the judge refused to sanction the plaintiff because he couldn’t conclude that the plaintiff acted with an intent to deprive the defendant of the ESI.

But an even more impactful case might be Nuvasive v. Madsen Medical, where the plaintiff was given an adverse inference sanction in July of last year for failing to preserve text messages for four key custodians, but the sanction was vacated in January of this year.

So what changed? Well, the new rules went into effect and after they did the plaintiff sought relief under Rule 60(b) based on the amendment to Rule 37(e) and the judge, who previously didn’t find that the plaintiff intentionally failed to preserve the text messages, agreed to vacate the previous ruling.

So I think while you will still see sanctions for clear, intentional spoliation of ESI, the changes to Rule 37(e) and the intent to deprive requirement may reduce the number of spoliation sanctions, we will see.

John W. Simek: But before we move on to our next segment, let’s take a quick commercial break.

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Sharon D. Nelson: Welcome back to Digital Detectives on the Legal Talk Network. Today our topic is The Top Hot Topics in eDiscovery. Our guest is Doug Austin, the Vice President of Professional Services for CloudNine, managing professional services, consulting projects for CloudNine clients.

Doug, you often write about best practices in eDiscovery, do you have any particular gotchas that you have encountered that people should know about?

Doug Austin: Sure. One of my best sources for stories on the blog comes from my work with clients as VP of Professional Services at CloudNine. One issue that I continue to see over and over again is clients, what I would call getting wild with wildcards.

Years ago I assisted a client who had already agreed to search terms with opposing counsel, and one of the terms was relating to mining activities, so the client decided to agree on a search term that included Min* in the search term to get mine, mines, mining and so forth. But the problem is there’s actually 269 words in the English language beginning with min, so we also retrieved hits for words like mind, mint, minimum, and many other words, and that one search retrieved over 200,000 documents with hits, only about 500 of which were truly relevant. So ultimately that client had to go back to opposing counsel and try to renegotiate the term.

So not only do you want to be careful when using wildcards, it’s also a good idea to test terms out before agreeing to them with opposing counsel.

Another issue I have noticed more recently is Bates overlays on PDF files. We have had some document collections provided to us in PDF format, and when you process PDF files they will either be text embedded or image only. Processing software is trained to look for the existence of text, and if it’s not there, well, automatically it will OCR the document to capture text off the image.

(00:19:48)

When you perform a Bates overlay in Adobe, that becomes the text that the processing software sees, so it skips the OCR of the image because it thinks it found text. So we recommend not using Adobe to apply Bates overlay to the images, instead use the processing software to do so. And also make sure that you request the same to the producing party for any productions being received by you so that you can receive images that can be processed correctly.

As a result of this issue we actually changed the CloudNine processing software to go ahead with OCR on pages in PDF files if there’s minimum text on that page, just enough for a Bates number.

John W. Simek: Well, Doug, I know, you write a blog post everyday and that can be quite a commitment, and I know Sharon and I blog as well, but I am looking for some practice tips here from you. How do you decide what to write about and how long do you expect to continue writing your daily blog?

Doug Austin: Well, as you mentioned, you both certainly know what a commitment blog writing can be. When I joined CloudNine about 6.5 years ago my boss presented me with a site already designed and ready to go that needed content, and he said — it’s called  HYPERLINK “http://www.ediscoverydaily.com” ediscoverydaily.com. And I told him that was a terrible name for a blog because you had to publish content daily and I am not sure I wanted to commit to that.

Ultimately though I decided that publishing daily was the best way to become a habit for readers, so we decided to give it a go, and now we have been doing it for over six years and have over 1,500 lifetime posts.

As for me, deciding what to write about requires reading a lot and staying abreast of new stories, technology trends and key case decisions. Reading sites and other blogs like Ride the Lightning and other sites gives me great ideas for stories. So to me, I am very much appreciative of the other writers in our industry. They are a great source of topics for our blog, and I am really very grateful.

Sure I grumble and while I grumble sometimes about writing a post everyday, I would say one thing the blog has done for me is it has forced me to stay abreast of the industry, because one thing I do is when I get really busy with client projects, I tend to get tunnel vision and stop reading articles, but the daily blog commitment has forced me to continue to keep my reading up. So that’s really been a benefit to me.

When we started I wasn’t sure if we would last six weeks or six months, much less six years. When we hit five years last year I said we would push it to at least 10 years and then evaluate at that time. So you can expect at least a few more years of daily blog posts and maybe more, we will see, regardless at some level. I expect to continue to keep writing as long as there are readers who are interested in what I have to write.

Sharon D. Nelson: Well, I think I can guarantee you, Doug, that they will be interested for a very long time. I have been one of your most devoted readers, and I appreciate the fact that you help me keep abreast, when I am lost in cybersecurity, you keep me up on eDiscovery, so I regard that as a very valuable resource indeed, and I am sure our listeners have enjoyed everything you had to say about The Hot Topics in eDiscovery. So we sure want to thank you for taking the time today to be with us.

Doug Austin: Well, thank you Sharon and thank you John. I very much appreciate it.

John W. Simek: Well, that does it for this edition of Digital Detectives. And remember, you can subscribe to all the editions of this podcast at  HYPERLINK “http://www.legaltalknetwork.com” legaltalknetwork.com or on iTunes. If you enjoyed this podcast, please review us on iTunes.

Sharon D. Nelson: And you can find out more about Sensei’s digital forensics, technology, and security services at  HYPERLINK “http://www.senseient.com” senseient.com. We will see you next time on Digital Detectives.

[Music]

Outro: Thanks for listening to Digital Detectives on the Legal Talk Network. Check out some of our other podcasts on  HYPERLINK “http://www.legaltalknetwork.com” legaltalknetwork.com and in iTunes.

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