By Janice P. Yates, CEDS

Karl Albrecht, the billionaire founder of the discount supermarket chain, Aldi, proclaimed, “You seldom improve quality by cutting costs, but you can often cut costs by improving quality.” (If you’ve ever visited an Aldi, you’ve seen this in action with their low prices and excellent value.)

How does this philosophy apply to in-house legal teams, outside counsel management, and eDiscovery? With the eDiscovery market spend forecasted to more than double in the next 10 years[1], legal budgets are stretched thin. The top strategy[2] for controlling these runaway costs is to bring more work in-house and reduce the number of outside partners, forcing corporate legal teams to explore innovative approaches to manage expenditures without cutting quality of work.

A recent article from Harbor Global sheds light on the various methods corporate legal departments are adopting to implement Mr. Albrecht’s philosophy as they transition more work in‑house.

  1. Leveraging Advanced Technologies. Noted as the second-highest priority in 2024, in‑house legal is increasingly turning to cutting-edge technologies to streamline the eDiscovery process.[3] These tools enable firms to automate repetitive tasks and expedite the identification of relevant information, ultimately reducing the time and resources required for eDiscovery.
  2. Embracing Data Analytics. One in ten law departments have implemented data analytics initiatives, with 43% planning to do so. This shift allows in-house legal to better envision case strategies through use of innovative technology.
  3. Increased Scrutiny of Outside Counsel. Since 35% of legal departments stated that they planned to decrease spend on outside counsel,[4] adopting collaborative approaches that promote transparency, communication, and mutual accountability are key to improving quality and controlling costs. These include:
    • Billing Practices – Tougher enforcement of outside counsel billing was tied for the second-highest ranked ROI initiative, after keeping more work in-house.
    • Collaboration Tools – Legal teams stated they need more standardized processes and tools to improve external collaboration and become more efficient. This would allow them greater freedom to focus on risk management and business issues.[5]
    • Use of Lower-Cost Firms – Greater use of smaller, lower-cost firms that differentiate themselves based on expertise, repeatable processes, and other value adds (e.g., expertise in innovative, cost-saving technologies).

Can in-house legal teams put into practice Mr. Albrecht’s wisdom and improve the quality of discovery, even as they are asked to take on more tasks and tighten their budgets? We believe they can. The balance between in-house and outside counsel is not a zero-sum game. By improving quality of the collaboration between the two, lower costs will follow as duplication of effort declines. The key is utilizing the right technology to facilitate this shift.

By embracing technology such as Evidence Optix®, which empowers early case strategy, discovery scoping, and generates cost predictions and scenarios, legal teams can more accurately predict eDiscovery costs, develop budget projections, and empower case negotiations. This effectively shifts discovery decisions to the left of the EDRM to the Identification Phase, providing critical metrics to in-house and outside counsel teams early in the litigation lifecycle and better arming them to make proactive, cost-effective decisions.

Benefits of utilizing Evidence Optix® as an early case strategy and collaboration tool include:

  • Quick identification of relevant information, so that only relevant data is moved forward to the review phase, where 68% of discovery costs occur. This helps meet the in-house team’s ongoing goal of cutting costs.
  • Providing early insight to in-house legal teams to support settle or proceed discussions, so that only claims with merit, reputational risk, or high financial exposure continue forward.
  • Ability to control budgets more accurately by using defensible metrics generated through discovery scoping scenarios, developed in collaboration with outside counsel.
  • Centralized oversight of outside counsel, as all decisioning is documented in real time across the litigation portfolio.

To read more about the power of moving to the left of the EDRM to address rising eDiscovery costs, see the blog post, A Tectonic Shift is Occurring in eDiscovery.

In-house legal teams must work smarter — not harder — to improve eDiscovery. Doing so in a collaborative way with outside counsel can help achieve the goal of cutting costs without diminishing quality. Mr. Albrecht would be proud.

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[1] https://finance.yahoo.com/news/ediscovery-market-size-grow-usd-112000090.html

[2] https://go.everlaw.com/rs/314-QPM-328/images/ACC_2023_State_of_Collaboration_Report.pdf

[3] Ibid.

[4] Ibid.

[5] https://go.everlaw.com/rs/314-QPM-328/images/ACC_2023_State_of_Collaboration_Report.pdf