J-M Manufacturing Co. Inc. wasn't happy with the way its lawyers handled its e-discovery needs in a still-ongoing False Claims Act (FCA) case. So in June 2011, the company sued its former law firm McDermott Will & Emery and launched the first-ever e-discovery malpractice case, which currently is pending in the U.S. District Court for the Central District of California. 

J-M claims that McDermott, using the services of outside vendor Stratify, produced a significant number of privileged documents to the government investigators in the FCA case. The government asked J-M to conduct a privilege review and submit a new set, and McDermott employed contract attorneys to carry out the privilege review—but J-M alleges that the law firm again produced privileged documents. J-M claims that McDermott produced approximately 3,900 privileged documents to the government, which deemed J-M to have waived attorney-client privilege with respect to those documents because two privilege reviews had been conducted before production.

What's the takeaway from this nightmare scenario? Law firms should exercise the appropriate level of oversight over contract attorneys and e-discovery providers, for one. For in-house counsel, the lesson is to engage with the service provider occasionally, even if outside counsel contracted with them, says David Deppe, president of e-discovery provider UnitedLex.

J-M Manufacturing Co. Inc. wasn't happy with the way its lawyers handled its e-discovery needs in a still-ongoing False Claims Act (FCA) case. So in June 2011, the company sued its former law firm McDermott Will & Emery and launched the first-ever e-discovery malpractice case, which currently is pending in the U.S. District Court for the Central District of California. 

J-M claims that McDermott, using the services of outside vendor Stratify, produced a significant number of privileged documents to the government investigators in the FCA case. The government asked J-M to conduct a privilege review and submit a new set, and McDermott employed contract attorneys to carry out the privilege review—but J-M alleges that the law firm again produced privileged documents. J-M claims that McDermott produced approximately 3,900 privileged documents to the government, which deemed J-M to have waived attorney-client privilege with respect to those documents because two privilege reviews had been conducted before production.

What's the takeaway from this nightmare scenario? Law firms should exercise the appropriate level of oversight over contract attorneys and e-discovery providers, for one. For in-house counsel, the lesson is to engage with the service provider occasionally, even if outside counsel contracted with them, says David Deppe, president of e-discovery provider UnitedLex.