Electronic discovery Electronic discovery

Corporate legal departments may be using downtime enforced by COVID-19-related shutdowns to reevaluate their approach to e-discovery. Those discussions are likely to revolve around whether it's more cost-effective to handle e-discovery-related tasks such as collections or processing in-house, or attempt to renegotiate contracts with vendors weathering the same injured economy.

Before the outbreak of COVID-19, the answer would probably have been more straightforward. Recent trends suggest that legal departments were taking more control over the e-discovery process by moving those functions in-house to increase long-term savings. Last October, Exterro's 2019 In-House Legal Benchmark Report showed that 50% of respondents had a formal or informal e-discovery team. But could potential COVID-19-related layoffs or financial hardships make it harder for legal departments to maintain that trend?

Brett Burney of Burney Consultants doesn't foresee companies reversing course on in-house e-discovery operations anytime soon. "Honestly, I expect the trend to continue. I think it will continue to be insourcing. I think this is just a little bit of a blip on the radar and I at least haven't seen that this is forcing anybody to make a different decision," Burney said.

A big part of that may have to do with the employees typically responsible for performing e-discovery-related functions inside corporate legal departments. According to Burney, the burden of those chores tends to fall on paralegals and company information technology professionals, who often serve a multitude of other important support roles within an organization or legal department in addition to their e-discovery workload.

However, some organizations may also be treating COVID-19′s sluggish effect on litigation as a window to reevaluate their approach to e-discovery, which is difficult to do when business-related legal needs are in full swing. Burney has heard from clients who see a chance to reconnect with outside providers at a more favorable price point.

"At this point in time, they see it as an opportunity to maybe take advantage of getting those service providers and talking them down [and] striking a bargain on those services," Burney said.

It's not entirely out of the realm of possibility. Some e-discovery providers have already felt the impact of COVID-19 on the world market. DISCO, for example, confirmed to Law.com in April that it had made an undisclosed number of cuts to its workforce in an effort to offset the effects of an economic downturn. But just how far even the most nervous e-discovery providers may be willing to bend in negotiations with corporate legal departments remains a question mark.

Mary Mack, CEO and chief legal technologist at EDRM, has not heard of any providers signing off on lower fees just yet, but she has seen some flexibility emerge around payment terms. For example, an e-discovery vendor may agree to significantly extend the number of days a client has to pay an invoice for a piece of software or other services before it is declared past due and begins accruing interest.

Still, Mack doesn't think that bargaining around lower fees is completely out of the question moving forward as e-discovery providers look to preserve their own ongoing business and cash flow.

"If you are a provider, whether you are a law firm or a platform or an alternative legal services provider, at this point it wouldn't be client-centered not to look at what you arranged to do in the best of times and make some adjustments," Mack said.