In follow-up to the success of its live certification program in D.C. and NYC, Catalyst is rolling out  its Catalyst CR Certified Reviewers program (CRCR) to LA next week. 

CRCR is the certification program for Catalyst CR (for information on the software click here) which is gaining significant market share and being requested by many corporations and law firms due to its many options and easy programmability, and its multi-language capabilities.

THERE IS NO FEE FOR THIS TRAINING.  THESE ARE IN-PERSON TRAINING SESSIONS AND SEATS ARE  LIMITED SO REGISTER AS SOON AS POSSIBLE.  THESE SESSIONS FILLED QUICKLY IN D.C. AND NYC.

The training will take place at the offices of Compliance Staffing, 915 Wilshire Blvd, Suite 2150, Los Angeles, CA 90017.   There will be the following sessions:

May 25th        Session 1:  1:00 p.m. to 4:30 p.m.

May 25th        Session 2:  5:30 p.m. to 8:30 p.m.

May 26th        Session 1:  1:00 p.m. to 4:30 p.m.

May 26th       Session 2:  5:30 p.m. to 8:30 p.m.

May 27th       Evening session only:  5:30 p.m. to 8:30 p.m.

There will be a 15-minute break during your session, and snacks will be provided.  

TO SIGN UP CLICK HERE:  http://www.catalystsecure.com/posse-list-registration.html 

As we have indicated in numerous posts, if we are to believe the prognosis of many economists, the current recession is on the verge of ending.  The rebounding economy will most likely re-invigorate corporations to push their markets globally. This, in turn, will further push litigation and regulatory inquiries globally.   But as our Posse List Europe membership knows we have already seen a surge of e-discovery work in Europe, much if it already due to governmental investigations and inquiries.   So we turned to our colleague, Nigel Murray, to discuss the e-discovery market in Europe.

Nigel Murray is the founder and Managing Director of TRILANTIC and he has long been at the forefront of providing electronic document management services since the early 1990s.  He began his career in legal technology as litigation support manager at a major London law firm.  He then started the first British litigation support company in 1993 — Bowhawk. There, he worked on the massive cases of the 90’s – Tobacco, BCCI etc. From there, Nigel brought the electronic side of litigation support into an existing document management company by way of a merger.  Having worked on the first UK eDisclosure matter in 2001, Nigel has been at the forefront of the development of the industry within the law firms in the UK. Nigel launched TRILANTIC in May of 2005.  He is a long-time member of The Sedona Conference.

TRILANTIC has been cited as a top e-discovery provider by the influential Socha-Gelbmann Annual Electronic Discovery Survey from Socha Consulting and Gelbmann & Associates. TRILANTIC is the only non-US provider to get such a ranking, reflecting both the increase in cases which have a European or UK dimension as well as TRILANTIC’s increasing involvement on both sides of the Atlantic.  In fact the survey called him  “a founder of the litigation support industry in Europe”.

We caught up with Nigel at the ACC Annual Meeting in Boston last year, and then again at his offices in London.

TPL:   To quote Chris Dale “in the e-discovery world, most Americans have seen Europe as a cross between a modest museum and a commercial colony full of obstructive civil servants obsessed with data privacy”.  Granted, that is changing.  Your take on this? 

NM:    [laughing] I’ll avoid addressing Chris’ comment directly.  Let me say that In the US, the need for corporations to create and implement a solid litigation readiness plan is ever increasing due to both the sheer volume of litigation that corporations are facing and the costs associated with e-discovery.  Outside the US though, this need may not necessarily be so acute.  For example within the EU (outside of the UK) most litigation with which a corporation is involved will be heard by the local courts and involves no discovery.  So, if there is no obligation to find and hand over documents.  Why spend the cost of preparing for such an eventuality?  Well, the two big exceptions to this being when corporations are facing regulatory inquiries from their own or other European regulators or if they face Litigation of regulatory enquiries from the United States whether these enquiries be under the Foreign Corrupt Practices Act, competition inquiries or other agencies. 

TPL:   But historically, many corporations based in Europe have taken the view to “self-insure” — i.e. spending money in preparing for an unlikely eventuality is not viable and if such an eventuality was to hit them, then to accept that the associated costs are part of doing business.  

NM:    This however is slowly starting to change as corporations are increasingly facing regulatory enquiries. European subsidiaries are having to adopt some of the processes and procedures being used in the US and European regulators are becoming more active since the recent credit crisis. The real first step for any organization is to have a document retention policy (for instance, determining what documents should be retained, for how long and where these documents should be stored, etc). Their document retention policy should also include the procedures for systematic destruction of documents. They should also have procedures to monitor and enforce compliance with these policies.

The company then needs to establish a protocol for responding to requests for electronic documents. The protocol should encompass identifying potential sources for relevant information and preservation of this information. It should also address the methods for extracting the data, and identifying and reviewing relevant documents. 

TPL:   Ok, but we suppose that part of this plan means you need to choose whether you have the resources and wherewithal in-house to collect and process elements of the electronic discovery or whether you need a partner who can work with you in a highly collaborative approach to meet your needs? 

NM:    Of course.  That’s why you need to hire TRILANTIC! 

TPL:   Ok, I walked into that one.  So, I now have a locally based partner who understands the local rules and regulations.  Now what? 

NM:    The second step is harvesting and processing the data. 

TPL:   How is this done within the EU?  

NM:    Ah, this is where the fun starts.  The European Union’s Data Protection Directive prevents companies sending personal data outside of the EU except when the destination country has been pre-approved as having adequate data protection. Only a handful of countries – Argentina, Canada, Switzerland, Guernsey, the Isle of Man and Jersey – have qualified as having adequate protection. 

TPL:   Hold on.  Despite these European provisions to protect personal data and restrict the transfer and use of that data, U.S. courts have been largely unsympathetic to defendants facing these obstacles and have even sanctioned companies who have failed to comply with discovery requests that violated local and international data privacy laws. 

NM:    I’ll give you that one.  All countries of the EU have their own data protection acts however over the last year there have been two key realizations:  data is often being collected wholesale and shipped to the US with total disregard to the individual country rules; and there needs to be a mechanism in place to ensure that court requests for documents can be met without compromising the fundamentals of the right to privacy of the individual.  There has been a lot of discussion as to how these conflicting requirements (US courts versus the rights of the individual) are going to be resolved.  There have been two recent announcements in this area.  But I do not want to clog up this interview with a recitation so let me give you this pdf [link]. 

TPL:   So, until there is clarity what can corporations do?  

NM:    In brief, there are 3 options:  (1) The first method is for the corporation to adopt Binding Corporate Rules (BCR).  This involves a company submitting its data protection processes to a data protection watchdog and having them approved for use; (2)  A second method is to allow the transfer of data across borders under the “Safe Harbor” framework.  In order to bridge the different approaches to privacy between the US and the EU and to provide a streamlined means to allow US organizations to operate in Europe, the US Department of Commerce and the EU Commission developed a “safe harbor” framework which was approved by the EU in 2000, although this is not necessarily the answer as once in the US it cannot be passed onto any other organisation unless that too is “safe harbor” certified; and (3) a third method is to obtain a letter of request under the Hague Evidence Convention from a district court. The Hague Evidence Convention is a treaty that allows the transmission of evidence from one state to another under certain guidelines. This latter though can be very time consuming. 

I have only skimmed the surface on this.  The link I gave you above has more information. 

TPL:   Thanks.  So, to summarize: it seems the current approaches to cross-border e-discovery each have their challenges in light of the vague and perilous data privacy landscape. As a result, corporations are having to look at alternative ways of meeting the conflicting requirements of the courts and the EU rules. 

NM:    Correct.  

TPL:   Let’s chat more about the mechanics.  The challenge with conducting e-discovery in-country is that it is perceived to be very costly and time consuming, especially when the expertise has to be flown to Europe from the US.  Which is why you need locally engaged support. 

NM:    Obviously I totally agree.  In order for e-discovery in-country to be a viable option, corporations need to work with service providers who have the capability either in-country or with the ability to rapidly set up a facility in-country.  These service providers should be able to react quickly and be able to deploy the right number of skilled people with the appropriate hardware and software with a minimum time delay.  These solutions must provide advanced search and analysis capabilities that enable early case analysis, rapid cull-down, and quick review.  And these systems must be able to work with any language or character set by being Unicode compliant.   Organizations facing these cross-border e-discovery challenges must ensure that their people and processes match the technologies being utilized and are appropriate in their specific legal environment.  

TPL:   And the use of local counsel? 

NM:    The best way to ensure it all gets done right is to solicit local counsel in the country in which e-discovery is being conducted.  Not only can they advise on the local data privacy requirements that exist in addition to those dictated by the EU’s Data Protection Directive, but they can add unique insight when interpreting email and document data that often contains local colloquialisms and contexts. This can prove invaluable when culling irrelevant data, conducting searches, and performing early case assessments.  A plug here, TRILANTIC has built up a network of local counsel in 27 countries of Europe who are able to provide local advice on such matters. 

TPL:    You also have software familiar to US attorneys, yes? 

NM:     We do.  We use a range of industry leading software for early case assessment, email threading, and review which will all be familiar names to those who follow this industry in the States. Such familiarity gives the US clients the comfort that by using a local service provider they will be using software and processes which have been tried and tested in the US. 

TPL:   E-discovery vendors have had much success over the last 2 years moving into the e-discovery space across the whole EDRM model, especially in the area of document review, a success due to the continuing move by corporations to move EDD directly in-house.  Document review is a nice piece of change.  Are you planning any moves to the “right side” of the model? 

NM:    Since I started TRILANTIC we have offered document review.  What we are seeing now though is the need to be able to offer review locally – i.e. placing the servers behind the client’s “firewall” so that not only is the processing taking place at the client’s offices, but the resulting data does not leave their control until the review team have reduced the overall volume to only the most relevant documents. 

TPL:   Do you staff your document review projects directly, use a staffing agency, or is there a mix?  How do you choose these agencies? 

NM:    We do not offer review directly but partner with companies who specialise in such services such as Project Counsel.

TPL:   E-discovery costs are skyrocketing.  Yet much of EDD is now a commodity – and that has changed the structure of the market.  Prices are — shall we say — more predictable and probably more realistic.  E-discovery vendors have capped fees, set flat fees or worked with various forms of pricing estimators.  Have you changed your pricing? 

NM:    We certainly have and for the last 18 months we have offered a fixed priced model for the early stages of a matter, which combined with our competitive pricing structure and forecasting model gives the client the comfort that they can keep control of the costs at all stages of the matter.  

TPL:   Going back to the EU data privacy rules, you have kindly pointed us in the direction of a couple of articles, however where can practitioners in the United States learn more about the practicalities of handling European data?

NM:   From our website resources page which you can access by clicking here.

TPL:   Nigel, we greatly appreciate your time.

NM:    Thank you and I appreciate the opportunity to talk to you as I am always impressed by the practical stance taken by the regular postings from the Posse List.  See you at LegalTech.

Note to readers and attendees of LegalTech in New York:  On 1 February, in New York, as part of the Legal Tech show TRILANTIC has laid on a double session where they have brought together a US panel of experts, including a New York judge and an EU panel consisting of a UK judge who is on the committee for the Hague Convention and other experts.  Subjects covered will include privacy considerations and EU data protection rules, compliance with them, and the proper response by corporations to US litigation and regulatory matters involving data held in the EU.  For the press release click here.   And for a post by Chris Dale, one of the participants, click here.

Merrill Corporation has a wide reach.  It is one of the largest world-wide vendors for outsourced services in business communication and information management.  Merrill’s services include document and data management, litigation support, language translation services, financial transaction and compliance services, virtual deal rooms, branded communication programs, fulfillment, imaging and printing.

Last year Merrill launched its Document Review Service which is geared to helping its customers more efficiently manage document review — and control rising discovery costs.  It was a natural progression for Merrill given their extensive experience and expertise in electronically stored Information (ESI) management, document translation, court reporting, etc.

Back in the 1980s, as beginning lawyers on Wall Street, we spent many days and nights in the Merrill proofing rooms at 225 Varick Street in NYC editing 10-Ks, 8-Ks, S-1s, etc. as they came off the Merrill presses.  We revisited that Varick Street location — home to Merrill’s New York headquarters — to meet with Jim Moore, Executive Vice President of Merrill Brink International, and Vanessa Vidunas, Director of Staffing Operations for Merrill Brink International.

TPL:    We’re cringing.  We used to spend hours in this room editing printer proofs.

JM:      [laughing] But we did feed you pretty well and you got your proofs back on time.

TPL:     TPL:    You did.  And it was like a cruise ship.  Food and drink 24/7.  Full breakfasts, lunches and dinners.  You guys still do that printing stuff?

JM:       Absolutely. There have been many regulatory and technology changes since then but the core service remains.  Want to come back?

TPL:    I think we’ll take a pass on that, thanks.  Ok, Merrill’s Document Review Service.  Give us some basics.

JM:        The launch was a natural for us.  We already offer translation services so offering that in tandem with multi-lingual document review provides our customers with a seamless integration with the e-discovery process, which I’d like to say is a rather unique offering in the industry.   We use teams of experienced attorneys (recruited by Vanessa and team) who are specially trained and many are Lextranet® certified (that’s our proprietary software) although our attorneys are versed on a number of software platforms. Once we had our infrastructure in place, we got requests for English review as well and we now offer both.

VV:      And I want to add that we can handle cases of any scope or size, including cross-jurisdictional and multi-national litigation as well as regulatory matters.  Additionally, our review space is state-of-the art, secure, comfortable and well-decorated.

TPL:    Ah, yes.  Multi-lingual and cross-border cases.  That is a huge market these days.  Your folks are in the U.S. but also a major presence in Europe, yes?

VV:    Yes, we have a presence in Europe and are seeing a growing demand for contract attorneys in that market.  The downsizing of the past 18 months has contributed to this need.  In 2009, we had the opportunity to work with both law firms and corporations who are based in Europe.

TPL:     Ok, we can almost predict the next phrase.  Don’t tell me.  You offer “end-to-end litigation support services.” 

JM:         [laughing] Ok, all service providers say that, I’m sure.  But we do.  And it’s a natural for us.  We are already providing case-related information and management services to the Am Law 200 and Fortune 500 corporations.  How do you reduce what seems to be ever-rising litigation costs, especially the discovery process?  Simple.  You leverage with a partner who has a wide spectrum of litigation services that can meet the needs of a case, no matter how large, complex or varied.  Merrill provides some of the most comprehensive case management services around.  If you check our website www.merrillcorp.com/legal you can see we offer initial discovery; audio and video deposition search and synching; document extraction, review and processing; multiple language translation; trial preparation; final production and trial presentation. And all of it is handled by superbly trained project managers who guide the process from inception to completion.

TPL:    So the majority of your clients are corporations, or law firms? 

JM:      It is a healthy mixture of both. We are seeing a trend where the General Counsel’s office tends to be more directly involved in choosing providers for ancillary services like document review. In those cases we work closely with outside counsel but our client is ultimately the corporation. 

TPL:    Vanessa, getting back to the contract attorneys who have to staff projects:  how do you recruit? 

VV:      We have an existing database of qualified contract attorneys that we can draw from. In addition, candidates are sourced through job boards, legal listserves, recommendations, word of mouth as well as my personal knowledge of many of the candidates in the industry.  After a rigorous screening process, candidates are considered for opportunities that arise based upon qualifications. 

TPL:    But you are also battling a contract attorney market (and NYC seems the worse) that has a surfeit of poor working conditions, low pay, mistreatment, lack of respect.  What is your read on all this, the whole overall condition of the contract attorney market, and Merrill’s answer? 

VV:       I read the blogs out there and I know from contract attorneys who I interview what law firms and agencies are raining down on the industry.  But we are far above that.  We are running a business and are certainly concerned with margins and managing costs during these challenging economic times; however, we believe that paying a fair market rate and treating our employees with respect garners loyalty and results in a better work product. Contract attorneys often have a choice as to where they will work and we want the best ones to choose us because of the culture and environment we offer. 

TPL:    Some of your postings on The Posse List have sought BigLaw associates or BigLaw experience.  Is this client driven? 

VV:       It is.  We can recommend to a client who we think they need to staff a project but many clients — mindful of these difficult financial times and knowing about the massive layoffs and the paradigm shift in the legal industry — often request we search out ex-BigLaw associates.  But clients have been asking not only for former BigLaw attorneys, but for candidates who have specific skill sets.  Many times the projects we get are more complex than straight doc reviews.   We also know the depth of The Posse List membership and we can usually staff what we need between our own database and your list. 

TPL:    And pay rates? 

VV:       Our pay rates are competitive with what the market will bear.  But lately we have worked with law firms — clients have become more and more savvy in the costs associated with document review — that tell us “we have budgeted “X” amount of dollars for the review part.  You need to work within the following pay rates …” Many clients are looking for alternative pricing models.  I would not be surprised if the model moves somewhat away from hourly and more towards a per document pay model as clients search for higher rates of productivity from the reviewers. 

TPL:    We saw a rough patch earlier this year with a huge fall off in work because of the financial meltdown.  How was 2009 for you and what do you see for 2010? 

JM:      We got off to a quick start in 2009 despite the economy and we are bullish about the prospects for 2010. 

TPL:    So you think we are back to form? 

JM:      Most indicators point to a better year ahead. 

TPL:    Your expertise seems to be foreign language projects given Merrill’s depth in that area.  As we have reported, FCPA and IP litigation cases dominate the project/contract attorney market.  We estimate they comprise 80% of our postings.  Is that the highest percentage of your work?  

VV:       Although we began our review business by focusing on bilingual projects, we are equally adept at English only projects. In 2009, we staffed many projects that had no foreign language components; however, in recent months, the hot matters in the market do seem to be in the areas of FCPA and IP litigation cases. In order to be successful, we watch trends and try to stay ahead of them to the extent possible. 

TPL:    There has been a creeping demand for greater use of contract attorneys by corporations, a trend we reported on earlier this year.  Have you also been staffing in-house legal departments?  

JM:      Yes we have. Merrill has a solid base of clients in corporate legal departments and our document review service is a natural complement to the other services they buy from us. 

TPL:    Lextranet, your document management software.  You have had the product since 2007? 

JM:      Correct.  We acquired Lextranet in 2007 because we were becoming a leading provider of Web-based litigation support and case management systems. Lextranet was a Web-based platform with transcript and case management tools. It fitted perfectly with our litigation support products/solutions.  And then we ramped it up. 

TPL:    By doing what? 

JM:      Well, lots of stuff.  For instance we augmented its native search capabilities with conceptual search, in this case by incorporating third-party software from Cognition Technology.   Conceptual search — looking for documents not by matching keywords, but rather by identifying documents containing words related to a concept — was the way the market was moving.  [To read full details on Merrill Lextranet click here]. 

TPL:    Frankly, after awhile, it becomes difficult to distinguish document review products.  Why are you different? 

JM:      E-discovery management takes more than great technology – experienced people can streamline each project and help you manage through inevitable challenges. Merrill offers an extraordinary breadth of export support – from the 1^st level review to preparing for trial, we will deliver creative and fiscal value. 

TPL:    ”The Big Enchilada” is Federal government contract work.  There is a flood of work from the FDIC, SEC, Treasury, etc. — standard financial document review and processing contracts which we reported numerous times in our previous posts.   There must be 10 contracts a week posted to the FBO.  Are you going for this work? 

JM:      Merrill I believe has worked with all or most of the agencies you mentioned as well as several others.   If value is perceived on quality, performance and consultative services, and price is not the only factor, then we are a competitor in the government sector. 

TPL:    One thing that has been in the press has been Merrill Lextranet Transcript Repository. What is that? 

JM:      Well, we are now in Version 2 of that product.  We have some updates, including search and synching for video depositions, a feature unique in the litigation support marketplace.  The program provides a secure, web-based environment that allows multiple users to log in with a secure internet connection from any location with 24-hour access. This connection allows users to search, organize, and manage deposition calendars, transcripts, and other legal documents. Users will also have access to a keyword-searchable video deposition library. 

TPL:    There is a lot of competition out there amongst agencies.  How does Merrill separate itself from the pack?  

JM:      First of all, we are much more than just a “body shop” for contract attorneys. Our service exists as part of a comprehensive e-discovery solution offered under one roof by Merrill Corporation.  More and more clients are looking for an integrated solution and we are uniquely qualified to offer that. 

Secondly, our roots in the translation business allow us to offer a bi-lingual review service that is unmatched in the industry. We offer language identification services in the processing stage that allow for a more structured and cost-effective review. We also offer professional translation of pertinent documents coming out of the review process. 

We also have a global footprint that allows us to provide reviewers and space in key locations throughout the US and around the world.  

TPL:    You have also partnered with the University of Alabama School of Law to conduct a course on ESI, yes? 

JM:      We have.  As you know, getting ESI knowledge into the law schools is a major movement today.  We have a partnership with the University of Alabama School of Law in conducting a course to prepare law students for the growing number of cases that involve electronically stored information.  The course is entitled “The Paperless Lawsuit: Preparing the Law Student for Trial Practice in the Age of E-Discovery” and it will begin this month.  The course will provide students with the emerging case law on electronic discovery and its application to technology, along with the use of pragmatic practice tools.  It is one of the first courses in the nation to provide hands-on training in reviewing actual electronic documents using the most current document review tools. 

TPL:    What Merrill personnel are involved? 

JM:      The School of Law hired Allison O. Skinner, Esq. of Sirote & Permutt, P.C. to serve as its first Adjunct Professor to teach this course.  Skinner collaborated with Melissa Rogozinski, senior account executive, and Chris Browne, senior sales engineer, both of Merrill Corporation, to construct a portion of the course to provide students with practical hands-on experience handling electronically stored information.  

TPL:    Jim, Vanessa — thanks for the time. 

JM:      Our pleasure.  I think The Posse List is an excellent source for jobs/projects and for learning about the e-discovery market.  Keep up the good work.

Postscript:  LegalTech is one of the premier events in the industry.  It will be February 1, 2 and 3 in NYC  (for details click here) and you can find Merrill Brink in the Exhibit Hall in Booths 2000 to 2004 o Level II.

We spent the last 3 weeks in Chicago, D.C., LA and NYC.   We met with Posse List members, law firms, e-discovery companies and staffing agencies, as well as a few in-house corporate legal departments where we have contacts, plus a few Federal government contacts.

What follows are some brief observations on trends we see in the contract attorney market and e-discovery market based on our meetings.   Some of these trends we have reported in our recent coverage of LegalTech (click here), ABATech (click here), ILSLC (click here) and some previous Trends reports (click here).

Some of general observations below merit greater discussion and we will expand on them as follows:

Part 2— going solo or freelance, and publishing a blog (posted: click here)

Part 3 — how to raise your profile, “brand” yourself, market yourself, and get published (posted: click here)

Part 4 — a look at selected e-discovery and litigation support vendors and opportunities for contract attorneys, including software certification and speciality (we’ll post this after ILTA09)

Part 5 — working in Europe (posted: click here)

Part 6 — the move toward and development of regulatory/compliance/risk management units in law firms and corporations and the opportunities for contract attorneys (this will be extensive and post in September)

Our general observations:

Foreign Language, FCPA and patents

1.  As we have reported, foreign language document reviews continue to dominate the U.S. contract attorney market especially in DC, LA and NYC.  This is due to the continuing increase in FCPA cases from firms such as Baker & McKenzie (they have 2 large cases now, with 2 more to come) and Kirkland & Ellis which have strong FCPA practices, as well as more FCPA work coming from Arnold & Porter which recently added a major FCPA partner.  This does not exclude other FCPA firms such as Sidley Austin, WilmerHale, Willkie Farr, etc. all of which have FCPA reviews going on. 

        Side note:  Kirkland & Ellis could have a lot more work coming across the board.   Two top partners at Skadden, Arps defected to Kirkland & Ellis.   One was David Fox, among the highest-paid lawyers at Skadden.  Skadden has had some hard times where revenue has fallen across nearly all practice areas.  Fox is a prominent mergers-and-acquisitions lawyer.   And Kirkland has a huge presence in the Persian Gulf which is generating FCPA and deal work.  Read: document reviews.

2.  As reported in today’s Wall Street Journal (click here),  the DOJ is increasing its prosecutions under the FCPA .   At least 120 companies are under investigation according to Mark Mendelsohn, a deputy chief in the DOJ division overseeing the prosecutions.   Several law firms we spoke with said most of the document reviews will be centered in DC and NYC and almost all will have English language components and not be totally foreign language.

       Side note:  the FCPA — born in 1977 amid investigations into alleged contributions to Richard Nixon’s re-election fund — now extends across five continents and penetrates entire industries, including energy and medical devices.  Among the companies currently under DOJ review are companies near and dear to the contract attorney market because of their long reviews: Sun Microsystems and Royal Dutch Shell.   Well, make that almost all of Big Oil.  There are a multitude of Big Oil reviews going on.

      The first big FCPA case that hit the radar for contract attorneys and document review (and reported in the above cited Wall Street Journal article) was in 2007 when the DOJ settled charges against Lucent Technologies for failing to properly record millions of dollars in travel to Disney World, Las Vegas and other sightseeing destinations for about 1,000 Chinese foreign officials who worked for state-controlled telecom companies. The company, which had characterized the trips as factory tours, admitted to the conduct and paid $2.5 million in fines.  But the Chinese kept the tee-shirts and Disney coffee mugs.

       And the biggest was the heavily reported Siemens case (click here)  which paid the largest foreign-bribery fine to date, and which said the cost of addressing its own corruption allegations was nearly as much as its total fine of €1.22 billion ($1.7 billion), including fines to the German government. The company is spending more money now on compliance programs and a government-mandated monitor.

3.  And this FCPA work has broadened out and led to the development of regulatory and compliance units in law firms, risk management units in corporations, led by early case assessment and total case assessment technology tools that have adopted regulatory and compliance capabilities that spot issues well before they become a problem.  The focus has moved away from law firms and to in-house law departments, affording a wide range of regulatory/compliance/risk management opportunities for contract attorneys.    And much of this is due to issues that were raised in a recent survey by the Association of Corporate Counsel, that many in-house counsel lack the tools/technology to manage key processes, or outside counsel handling those processes.   We’ll cover this in more depth in Part 2, and Part 5.

4.  But the stream of foreign language document reviews is also due to a stream of international patent litigation coming to such firms as Finnegan Henderson, Gibson Dunn and Baker Botts.  And all the law firms we spoke with say this will continue.

5.  There is also a spate of pharma litigations (straight pharma litigation and FCPA pharma) in DC and NYC and Posse List members tell us that Ajilon, ClutchLegal, Excelerate Discovery, HireCounsel, Hudson Legal, and Kelly Law Registry already have parts or are all in the ring on the bids.

6.  And one significant trend we have previously posted about but emphasized by several law firms this past week: although staffing agencies still do the larger percentage of foreign language document review, e-discovery companies have aggressively moved into this market.  IT/litigation support teams at law firms we have visited continue to tell me (as they did in December when I made my rounds) that it makes much more sense to have the e-discovery companies also handle the “back end” — the review itself — since the evolution of the technology makes it a natural progression.   Why use two vendors when you can use one?  This has impacted the contract attorney job market as more and more e-discovery companies and vendors build out staffing relationships or staffing units such as and Catalyst.

Bankruptcy

7.  As far as bankruptcy, the onslaught of pre-packaged bankruptcies (for background click here and click here) has shortened the bankruptcy review times (as all of you on the Chrysler document review will attest).  But we have hope that General Motors will file Chapter 11 by June 1st because analysts say it will require an army of lawyers (for story click here).

Meantime there is still a large demand for per diem bankruptcy attorneys and contract attorneys with more of a demand in the Midwest, South and West.  These are the Posse List job listservs that have received the most posts.

Europe and Asia

8.  Which brings us (albeit indirectly) to Europe and Asia.  We have seen a large uptick in document review work in Europe, and also Asia.  This is due to a number of factors such as the FCPA (yet again) and patent work and law firm/client use of “blocking statutes” and the emergence of very sophisticated e-discovery companies such as European-based Outindex and Trilantic, and  Asian-based companies such as  CCH Workflow Solutions, all of whom are developing the capabilities of document review, and European-based staffing agencies such as Project Counsel.  We’ll address contract work in Europe and Asia, and these companies, in Part 4.

      Side note: some of these trends we covered in our reporting from the International Litigation Support Leaders Conference two weeks ago (click here).

E-discovery and litigation support technology

9.  Dennis Kennedy recently posted a piece in the ABA’s Law Practice Today (click here) which is his annual prediction for trends in legal technology and his advice for coping or responding to those trends.   Dennis is an information technology lawyer and a highly regarded legal technology author.  He writes the technology column for the ABA Journal and is the co-author, with Tom Mighell, of The Lawyer’s Guide to Collaboration Tools and Technologies: Smart Ways to Work Together and he has a blog (click here) and a Twitter account (click here).   In the article Dennis sets out several trends including: 

       1.         Technology budgets get decimated

       2.         Making do with what you have or doing more with less

       3.         The mobile phone as platform

       4.         Looking to the cloud

       5.         Using tech to get the word out and the money in

       6.         Focus on client-focused technology

       7.         E-Discovery in still waters

His best recommendation for 2009 is one we have saying for months: read Richard Susskind’s new book The End of Lawyers? and familiarize yourself with the two biggest influences on the legal profession Susskind mentions:  commoditization and information technology and the way they will disrupt and change the profession, faster than we expect.  For our posts on Susskind click here and click here.

We want to comment on Dennis’ points #5 and #7.

       #5 is something we have been blogging about on The Posse Ranch (www.theposseranch.com).  Had you even heard of Twitter a year ago? Now you can’t turn around without seeing something about using Twitter, Facebook, social media tools, blogs, podcasts and online video for marketing. You can put video up on Youtube, publish PowerPoint slides on Slideshare, create your profile and groups on LinkedIn, have a blog, create a podcast and do many, many more things to get your message out and create a brand. The financial cost of most of these tools is next to nothing. Think about how you and your potential clients get their information today. Create a channel to reach them that way.   On our Posse Ranch site you can find all types of help.  We will address this in full in Part 3 on Thursday.

        As regards his overall comment in point #7, we could not agree more:  no area of legal technology receives more attention than e-discovery.   We have written about the 3 trends he highlights:  the growing emphasis on cooperation and collaboration;  technologies and techniques to produce usable and workable datasets out of enormous amounts of data; an increasing amount of focus on high costs of EDD, with the parallel trend of treating some EDD procedures as commodities, with commodity types of pricing and off-shoring.

But we especially note his “trend you will want to take notice of is one that started a few years ago and has continued to grow”.  It’s the movement of the lawyers who know the most and who are the best at EDD out of law firms and into the employ of EDD service providers.  He calls this a “tectonic shift” in that the probable long-term result will be EDD service providers largely taking this work away from law firms and “EDD, perhaps, [will] no longer even [be] considered part of the ordinary practice of law, leaving litigation lawyers to redefine what they actually do as clients route around them to the EDD service providers who have all of the talent”.

And it affects the contract attorney world.  Because one thing we heard over and over these last few weeks yields another, more direct trend affecting contract attorneys:  law firms and corporations have begun asking e-discovery companies and vertically integrated staffing agencies whether they can provide “enterprise wide” e-discovery solutions: managing and/or staffing projects for a law firm or corporation in any of its offices across the U.S. and/or across the globe.  Can they be “the one” vendor?  And part of this is due to a sub-trend: doing the doc reviews “local” in Europe and Asia because of blocking statute rules and data privacy.

But more importantly, going to e-discovery companies — the folks processing the data from the start — and asking “…and can you staff the review?”  For example, word on the street is that ePIC (an EDD) has picked up data processing contracts with a major mortgage lending company and telecommunications company. ePIC is close to landing a similar contract with a major energy company. All three contracts will involve document review work where ePIC would hire project managers and contract attorneys directly.  And that’s just one example.

10.  And then there is computer forensics, an area of growth for contract attorneys with a tech bend.  Data recovery, computer forensics and e-discovery all deal with data, and specifically digital data. It’s all about electrons in the form of zeroes and ones. And it’s all about taking information that may be hard to find and presenting it in a readable fashion.   Yes, the skill sets require different tools, different specializations, and different ways of looking at things.   But there is an overlap.

Chris Jurkiewicz of Venio Systems recently conducted a poll titled “Do you see the E-discovery and Computer Forensic markets merging?” and of the 122 e-discovery respondents from around the world who responded, 72.1% said yes and 27.9% said no.

We “found” Venio Systems at LegalTech and it has electronic discovery software that allows forensic units, attorneys and litigation support teams to analyze data, provide an early case assessment, total case assessment and a first pass review of any size data set.  We have not interviewed them yet but we hope to include them in Part 5 of this report when we look at the tech companies and opportunities.

11.  To finish off this technology section, last week Ralph Losey did a post on his blog about the ethical problems of attorneys who don’t know enough about e-discovery or, as Ralph put it  “abdicate the traditional role of lawyer as master of discovery” .  The result of this abdication has been a rise in e-discovery expenses, an increase in lengthy and unnecessary motions practice and a subsequent upturn in sanctions against law firms.  

He was interviewed (click here) by Browning Marean and Tom O’Conner, two leading lights in e-discovery world and discussed the failings of law schools and bar associations to provide certification or competency training in this field. 

We include it here because of all the law schools and bar associations who have susbcribed to The Posse List and also follow us on Twitter, and the new contract attorney members of The Posse List who had “some” e-discovery course work in law school and/or completed a certification course.

India … and China !!

12.  Law firms and legal process outsourcing to India still have a long way to go, and law firms still appear unconvinced.  Several recent studies and a recent survey US and UK based law firms (here, here and here)  reveal that less than 3% of law firms had any past experience of off-shoring legal services.    Although legal services outsourcing has garnered a lot of media attention, there still is a sizeable proportion of the legal community that has not considered outsourcing legal services to lower cost destinations.

      Side note:  offshoring of legal services to India began way back in 1995 when law firm Bickel & Brewer opened a captive facility in India.  Although Dow Chemical, Dupont, GE and other corporations set-up LPO operations in 2000 and 2001, the legal services outsourcing industry started to attract significant attention only around 2005.

In a matter of just a few years, the industry has grown to reach $225 million in revenues in 2008. However, this is only a very small portion (<4%) of the addressable market. According to the recent survey by ValueNotes there is a low perceived benefit of outsourcing legal services amongst law firms.   Most of the law firms are relatively new in terms of their off-shoring initiatives and have not integrated off-shoring in their overall strategy.  A large number of law firms, irrespective of their size, are apprehensive about sending their legal work to another country.  While this does result from lawyers not being convinced about the benefits of off-shoring, they also indicate concerns such as data security, client confidentiality and quality of work delivered.

Cost reduction (surprise!!) was rated as the primary driver for off-shoring legal services. Other significant drivers include increasing workload, time differences and competitors’ decisions to offshore.  But while there seems to be some awareness about the benefits of offshoring, especially amongst those who offshore. for the majority the drivers do not seem to be strong enough.  Any benefits do not appear to be substantial to help over-ride their concerns.

Data security and quality of work delivered emerged as the key concerns for law firms. Given the confidential nature of legal documents, it is understandable that law firms have apprehensions on the security aspect.

No, off-shoring is not going away and the blended enterprise approach (first review in India, second review in the U.S. or UK)  and the overall cost reduction still is a driver for some. 

13.  China: a rising power in global outsourcing?  A new paper from KPMG (click here) takes a look at China’s rising importance in global outsourcing.   Chinese vendors have progressed to specialize in niche areas such as: legal process outsourcing, animation and gaming, e-learning, offshore engineering and pharmaceutical R&D.

While many companies are showing greater appetite for outsourcing diversification, they still want the reassurance of dealing with companies with global perspective and experience, the paper says. This is where the Chinese government’s so-called “1000-100-10″ plan comes into play:  Launched in 2006 with funding in excess of US$1bn, the plan aimed to establish 10 Chinese cities as global outsourcing bases (subsequently increased to 20 cities in January 2009), to attract 100 international corporates to outsource to these locations and to develop 1000 Chinese outsourcing vendors to service this new client base.

It was an ambitious plan (ah, China) but the results can be seen with Dalian, Shanghai and Beijing already ranked in the top 10 most attractive cities for outsourcing. 

While the potential benefits of China as an outsourcing center are many — technical skills, language skills, depth of talent and pricing to name but a few — it is the increasing professionalism of the fledgling, 15 year old industry which is impressing many, the paper concludes.  

And China has employed a bit of a “twist” especially in the legal process outsourcing area:  many vendors offer thorough, months-long training programs in technical skills and customer service and substantive areas by stationing Chinese workers overseas for extended periods at customer or corporate locations to become more familiar with the client’s business operations.    

Gregory P. Bufithis, Esq.   Founder and Chairman, The Posse List

ILSLC (Part 2:  wrap-up)

We want to finish our review of last week’s International Legal Support Leaders Conference (ILSLC) with a focus on U.S. foreign language document reviews and document reviews outside the U.S. (for our others posts on the ILSLC click here).

As we have indicated in previous posts the last few months, foreign language document reviews have dominated the U.S. contract attorney market due to the continuing increase in FCPA cases which explains the stream of work from firms such as Baker & McKenzie and Kirkland & Ellis which have strong FCPA practices, and now more work from Arnold & Porter which recently added a major FCPA partner.  Add to this mix the continuing stream of patent litigation and cross-border M&A work such as the Sanofi-Aventis/Bristol-Meyers merger (click here) and cross-border litigation such as the Societe Generale class actions (click here).  

And an even bigger factor:   other countries are starting to enforce laws similar to the FCPA, and international law enforcement agencies are cooperating more than ever before (click here). 

Another ingredient to the mix: the step-up in DG COMP investigations in Europe (click here, here and here). 

Result?  Lots of foreign language work for contract attorneys, and lots of work for e-discovery companies that handle foreign language document collection, processing and review.   As we indicated in our “Trends” review last December (click here),  staffing agencies still do the larger percentage of foreign language document review.  But e-discovery companies have agressively moved into this market by teaming with staffing agencies.   The IT/litigation support teams at law firms we have visited continue to tell us (as they did in December when we made our rounds) that it makes much more sense to have the e-discovery companies also handle the “back end” – the review itself — since the evolution of the technology makes it a natural progression.    Why use two vendors when you can use one?  This has impacted the contract attorney job market as more and more e-discovery companies build out their staffing relationships and staffing units.

And one competitive “game changer” might be the entry of Merrill Brink (a division of Merrill Corp.) into the document review market.  Contract atorneys know them because of their e-discovery/case management software  Lextranet.   It is one of the largest language translation/interpretation company in the U.S. and already offers an array of services to almost every AmJur 100 firm such as deposition services, trial prep services, large case management, etc.  But as several law firms told us, their extensive legal translation and interpretation services for international litigation, intellectual property, patents, and mergers and acquisitions – the “biggies” for the contract attorney industry – make the actual staffing of document reviews a natural fit.    We hope to meet with them in the coming weeks and get more details.

U.S. foreign language document reviews

At a seminar concerning the foreign language component of e-discovery and document review, we heard from experts Lillian Clementi, Managing Principal of Lingua Legal; Todd Haley, Vice President of E-Discovery at ePIC; and Conrad Jacoby, founder of efficientEDD as they expounded on the “how tos” of these reviews.

As Clementi and Haley pointed out, the common refer­ence point is Unicode — the buzz word on the lips of every e-discovery provider and in seemingly every press release of every litigation software and service provider.

We’ll skip the “tech talk” and just tell you that:

• Unicode is the de facto standard for translating characters and symbols of written language — both English and other languages — into numerical values for processing on computers.

•Software that doesn’t support Unicode may work on Unicode documents in English, but it most likely won’t work on documents in other languages.

•Using noncompliant software on Unicode documents may cause incorrect display of non-Latin characters and sometimes data-file corruption.

That last point is crucial.  If, for example, Japanese characters cause the review tool to omit documents from search results or improperly display them during a privilege review, an inadvertent disclosure could result.  Further, a noncompliant tool can mangle Unicode characters when exporting documents for production by substituting symbols for unrecognized characters because the software didn’t know how to handle them.

So, as the panelists emphasized, it is prudent to inquire about the specific Unicode capabilities of your software vendors and demand similar due diligence from service providers.

Is Unicode compliance the same thing as universal language support?  No.  Unicode compliance means only that the software has the ability to handle documents in languages that include characters beyond the A-Z scheme used in the Latin alphabet. The complexities of searching and reviewing a multi­lingual document collection are numerous and may require advanced functionality offered in very few of the available litigation tools.

Here are the other buzzwords/concepts to know:

Compounding: Some languages, including German, Dutch, Swedish and Finnish, use compound nouns that may complicate searching. For example, without the proper search syntax, a search based on the German word Kontaktlinse (contact lens) would miss a document that included the word Kontaktlinsenverträglich­keitstest (contact lens compatibility test).  Specialized tools exist to facilitate searching individual components of compound nouns, but few litigation support tools have incorporated such technology.

Tokenization: To facilitate rapid searching on large document collections, search tools use a tokenization process to identify discrete words and add them to a searchable index. For most Asian lan­guages — which use very little punctuation, don’t insert spaces between all words, and can have the meaning of characters change based on context —the process for breaking down documents into individual words can be very complex and require language-specific dictionaries. Again, few litigation tools are sophisticated enough to accommodate the idiosyncrasies of some languages.

Canonicalization: In most languages, there are multiple ways to express a single concept. Most search engines are good at handling the most common form of this in English, the synonym. Other languages, however, have more complex systems for representing concepts in multiple ways. For example, the meaning behind a Japanese ideogram can also be “spelled out” in one of several different kana character sets or transliterated phonetically into the Latin alphabet using the romaji system.  Problems also arise from languages where nouns can take on prefixes or suffixes based on the context in which they are used. For example, in Arabic the word for “my apple” and “your apple” are represented by distinctly different canonical forms with the same fundamental meaning.

And a big issue: what role does automated document translation play in discovery?  It is not an “either/or” situation.  You need a blended approach.  All the panelists recommended using search experts fluent in the lan­guages (such as Clementi’s firm Lingua Legal) present in the document collection.  It is reasonable for certain phases of the process such as creating search-term lists for culling, reviewing documents, and final quality control. But having a translator “shadowing” everyone on the litigation team to translate every search isn’t always practical, especially if more than one foreign language is involved.

Machine translation can help. Although notoriously inaccurate compared to a manual process, less-expensive machine translation still can assist litigators in situations where it is impractical to have a human translator standing at the ready. Although it is not advisable to conclude definitively that there are no relevant documents based on only a search of machine-translated versions of documents, it is quite reasonable to use automated translations to make first-pass culling decisions.

Overall, in dealing with foreign languages in discovery, it is important to take a proactive stance, be knowledgeable about the complexities, and ask the right questions of vendors early in the process to avoid costly mistakes in the discovery management process.

Litigation without borders: global e-discovery

And finally, an issue near and dear to our heart:  document reviews in Europe and Asia.  The trends we discussed at the beginning of this post – continuing increase in FCPA cases, continuing stream of patent litigation and cross-border M&A work, other countries are starting to enforce laws similar to the FCPA — has led to a surge in document reviews in Europe and provided work for European based Posse List members through such companies as Project Counsel,  and now also Asia (a member of The Posse List leaves for Asia this weekend as part of a trade delegation on Asian e-discovery).   It is also the reason why law firms and corporations have begun asking staffing agencies and e-discovery companies if they can provide “enterprise wide” e-discovery solutions: managing and/or staffing projects for a law firm or corporation in any of its offices across the globe.  In our trip to NYC this week that was the “new big thing” discussed at all the law firms we met.

An ILSLC panel focused on managing cross-border discovery was composed of three heavy-weights in this part of the industry:  Scott Merrick, International Marketing Director of LDM Global; Nigel Murray, Managing Director of Trilantic; and John Tredennick, CEO of Catalyst. 

If you operate internationally, you must be cognizant not only of a patchwork of laws and regulations-many of which could conflict-but also of cultural differences that affect your response to requests for electronic information.  The initial stage in any litigation or regulatory effort is to ensure preservation of relevant materials. But an international scope makes this far more complicated than just issuing a directive to employees to stop deleting e-mails or drafted documents. You need to know where information is located, how it is stored, when it is backed up, and whether backups are rotated or destroyed. Automatic deletion or rotation policies mean that if you do nothing, you may lose files that are subject to a regulatory or litigation request.

Data collection also is far more complicated in an international context than in a purely domestic one. Local laws may prohibit an employer from searching employee e-mail files. As a cultural matter, most Americans are accustomed to the idea that an employee’s computer and e-mail account belong to the employer. Outside of the U.S., the cultural understanding is frequently just the opposite: An employee’s computer and e-mail account are considered private, and it may be a criminal offense to invade that privacy. Collection of data outside the U.S. may be seen as coercion by an employer, and it may lead to labor union grievances or complaints.

Once the information is collected, getting it reviewed and produced to a U.S. regulator or litigant is also no simple matter.  Data privacy and blocking statutes in Europe, Asia and South America may forbid the transfer of personal data outside of their borders to an “unprotected” jurisdiction like the United States-and personal data include names, e-mail addresses and office phone numbers. Indeed, special procedures may be required before individuals outside a company-including the company’s outside counsel-may review the data.  And local laws may dictate that only data specifically responsive to a request may be exported, requiring counsel to review materials locally rather than shipping them to the U.S. to one centralized location, as is normally done in U.S. litigation

Do not expect, however, any sympathy from U.S. regulators or plaintiffs’ lawyers.  U.S. regulators are skeptical of data protection laws and may take the view that international companies hide behind them to avoid cooperating with the regulators’ investigations. U.S. courts may not be more understanding. The Supreme Court has held that U.S. discovery rules presumptively apply in civil litigation involving an international company, even if producing data in response to a discovery request would be unlawful in the international company’s host jurisdiction.

These are some of the issues that will arise when an international company has to manage a conflict. How should you resolve these issues and to whom should you turn to get the process started?   You need to partner with a local vendor who understands any local legal requirements and has the technical ability to help you meet them. Alternatively, in selecting your forensic technology vendor, you should consider whether it has an established presence in the foreign country involved in the crisis.   For instance, in Europe, Trilantic is the “go to” company with its pan-European operations base.

For instance, if you need to collect e-mail from your France-based sales and marketing staff in order to respond to the SEC inquiry, you will need to ensure you do not violate France’s data protection law in doing so. This may mean engaging a local law firm to analyze any intra-company agreements between your U.S.-based parent and the French subsidiary to learn what foreign data transfers may already be permitted. In addition, you may need to engage an EU-based forensic technology vendor to host any French e-mails you collect in a location inside the European Union until you determine they can be transferred to the SEC in the United States.  Alternatively, some U.S.-based forensic technology vendors are “safe harbor” companies. This means the U.S. Department of Commerce has certified that they meet EU data protection requirements and would be able receive transfers of data without violating French law. This would allow you to maintain and analyze any data in the United States before turning it over to the SEC.

And, assume nothing and document everything.  For better or for worse, U.S.-style litigation and internal investigations are largely alien to non-U.S. organizations.   Most likely foreign managers have never before participated in a forensic collection.  Preserve and document the chain of custody.

For a nice overview of the European issues, Ken Rashbaum (a Director at Fios Consulting) has posted a piece giving you background on the Sedona Conference framework for analysis of cross-border discovery and the Article 29 Working Party of the European Commission (click here).   Ken is a major presenter at The Sedona Conference on Cross-Border eDiscovery & Data Privacy in Barcelona, Spain this June 10th and 11th.  The Posse List is attending that conference and we will be posting reports.