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Quinley On Claims Three Ways to Tame E-Discovery Costs By By Kevin M. Quinley CPCU, ARM advertisement Risk managers must seek ways to tame e-discovery costs as a volatile component of litigation expense. This is true regardless of whether a risk manager's company is fully insured, self-insured, or a blend of the two. Even if the risk manager's organization has first-dollar insurance coverage, hemorrhaging e-discovery costs can spike an account’s loss ratio. This in turn will either increase the cost of risk, inflate renewal pricing terms or perhaps even render an account uninsurable. If a risk manager’s company is self-insured, e-discovery costs represent a torpedo hit to expense budgets without any cushioning from insurance. While risk managers juggle many balls, taming electronic discovery costs is within the risk manager’s purview, whether insurance is in play or not. Thus, risk managers seek to tame the electronic discovery beast. Tip #1. Hold defense counsel accountable as a partner in managing electronic discovery costs. Most likely, defense counsel will be key in both selecting the e-discovery vendor and overseeing electronic discovery. If defense attorneys see electronic discovery cost as a pure pass-through to the client, they will have limited incentive to embrace efficient and cost-saving processes. The aim: to fully comply with discovery demands without spinning wheels, wasting time and money, and to avoid expensive wild goose chases. Thus, make defense lawyers feel they are partners collaborating with the risk manager in ameliorating electronic discovery costs. #2. Consider offshoring e-discovery work. One approach used by a growing number of companies is to use highly-qualified lawyers in India to conduct document reviews. It typically yields 50-75% savings and measurable quality. Some e-discovery vendors offer both models: temporary attorneys in the United States and permanent attorneys in India. Client companies have seen material cost savings resulting from offshore reviews. #3. Carefully define the scope of the document review. A key step for taming electronic discovery expenses is to identify early on the kinds of documents that the risk manager’s company must collect. This way, counsel gathers only relevant documents and the client avoids expensive diversions. The risk manager must make sure that somebody accurately defines the scope of the document universe. Clearly, this is an area where the risk manager will need to collaborate with in-house legal counsel. The risk manager should tread carefully here to avoid infringing on an area typically considered the turf of the general counsel or vice president of legal affairs. Nevertheless, electronic discovery costs can impact a company's cost of risk. For this reason, the risk manager is one -- but by no means the only -- stakeholder in the process of managing e-discovery costs. These three tactics and strategies can provide cost containment arrows in the risk manager’s toolbox of quivers. Kevin Quinley CPCU, ARM, AIC is an insurance executive, author, speaker and trainer. You can reach him at kquinley@cox.net or at his website, www.kevinquinley.com

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