Document Review

Last week, more than a dozen high-profile mass torts attorneys lost a San Francisco jury trial against a small technology company. The jury decided the attorneys had illegally breached a document review contract during the high-profile Chinese drywall class-action litigation.

On September 19, the 14 defendants in Cataphora Inc. v Parker were ordered to pay $317,113 to the technology company in lost profits, plus attorneys’ fees.

“These guys are the worst of hypocrites that you can possibly find,” said Roger Chadderdon, technology counsel at Cataphora. “They claim to be trying to help the little guy, but what they’re doing is trying to put more money in their own pockets. Everybody knows that, but this is a case that illustrates it beyond what I have ever seen.”

Clearly, tempers are still running hot. We’ve got more from both sides of the dispute, and a quick refresher on Chinese drywall, after the jump….

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At this point, the lengths companies go to in order to protect data, keep it secure, and prepare for e-discovery is old news. Data breaches — and the news coverage that usually follows — have frightened many companies into at least attempting to ratchet up data security policies. Likewise with retention practices. There have been enough e-discovery horror stories that most companies, and especially their lawyers, know they need to start prioritizing this stuff.

Strangely though, you don’t often hear much about data security within corporate boards. But it turns out that the boards of many multinational corporations with hundreds of millions of dollars in revenue are way, way behind the curve on data security.

Company boards are doing everything from printing out physical copies of thousands of pages of sensitive material, to sending unencrypted information to personal e-mail accounts, unsecured iPhones, and home computers. The Thomson Reuters report, released Wednesday, gives a harrowing account of disasters waiting to happen….

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Adam Bier (sans beard)

At the Legal Technology Leadership Summit opening reception on Tuesday, I struck up a conversation with a friendly young lawyer. He won immediate social coolness points for several reasons: He has a beard. He’s from the East Bay, like me. He runs a solo practice, and he had some good stories about lawyers following unique, non-lawyerly paths (which we might mention in future posts).

Needless to say, I was surprised to walk into Thursday’s keynote discussion, “Qualcomm Revisited: When Lawyers Face Discovery Sanctions,” and discover that this attorney was actually the youngest member of the Qualcomm Six.

Adam Bier was still a self-described “baby lawyer” when he was wrongfully sanctioned in the landmark 2008 Qualcomm e-discovery case. Kashmir Hill interviewed him early last year, when the appealed sanctions were finally vacated, more than two years after they were first imposed. Bier shared his story with conference attendees, joined onstage by U.S. Magistrate Judge David Waxse and Frank Cialone of Shartsis Friese, who defended several of the outside counsel in Qualcomm.

After the jump, learn the details of Bier’s nightmare experience. Can you imagine yourself in his shoes?

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When you’re in private practice, people ask you tough questions. “During the proxy fight, a trial court held that our proxy statement was false and misleading. We settled that case, so that judgment is final. We’ve now been hit with a 10b-5 shareholder suit, and the plaintiffs have filed a motion saying that the earlier proxy decision is binding on the question whether our statements were false and misleading. How do we defeat that motion?”

Then you move in-house, and the question changes: “How can we reduce the cost of electronic discovery and document review?”

Oh, how the mighty have fallen.

But, when you’re forced to think for a minute about electronic discovery and document review, you realize that the battle previously waged between law firms and third-party vendors to capture this work is now largely over: Document review, which was historically an important profit center for large law firms, has moved permanently into the hands of third-party vendors. That sea change was not prompted by the recession, and things are not going to return to the old “normal” after the economy recovers. Companies that continue to rely on law firms, rather than third-party vendors, to do large document reviews are probably making a mistake, and law firms that are counting on document review projects to resuscitate their profitability are betting on the wrong horse.

Why?

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A wise man once said: “There, but for the grace of God, go I.”

I think of this whenever there are claims of attorneys royally screwing up e-discovery. It’s easy to indulge in some schadenfreude and say, “What suckers!” But truthfully, many firms — even the big, prestigious ones — are more vulnerable than they’d like to admit.

This month, McDermott Will & Emery ended up in the bright, unpleasant spotlight, because a former client sued the firm for malpractice.

Why, you might ask? The firm allegedly botched a client’s e-discovery.

Keep reading to see how the Am Law 100 firm became the e-discovery dunce du jour….

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* “I doubt this is constitutional, but let’s just do it.” Sounds like business as usual down in the Senate as to plans to extend the FBI Director’s term. [Blog of Legal Times]

* Are we really still talking about desegregating schools in Arkansas? I can’t even believe that this is a serious proposition. [WSJ Law Blog]

* This is what happens when lawyers from Yale stop being polite, and start getting real. What good can come from Kentucky or North Dakota? [PrawfsBlog]

* Ladies, should you take a new job while pregnant? To me, that’s kind of like asking, “Should I go bungee jumping while pregnant?” Not a good idea. [Corporette]

* Apparently, there’s some debate as to which city will be the next world capital of law. And no, it probably isn’t going to be one of these outsourcing cities. [Law21]

* Kash, of course it’s bad for America that Weiner is resigning. We don’t get to see any more big, kosher pickles. [The Not-So Private Parts / Forbes]

* Summer associates, please take note. Do not send emails to colleagues about wild, underage ragers like this JP Morgan intern did. You will look like a complete tool. [Dealbreaker]

* Leave it to Paul Clement to get this lady off with a 9-0 decision. It turns out she wasn’t a terrorist, just a little kooky. [CNN Justice]

* Bob Tennant of Recommind tells patent critics (and competitors) a thing or two about prior art and automated discovery. [Recommind]

I’ve always wondered what kind of salary contract lawyers make these days. Okay, not really, I kind of already know, because a lot of my friends are contract lawyers. But for those of you who aren’t familiar with the wonderful world of contract lawyering, the Wall Street Journal had an interesting article yesterday, by Vanessa O’Connell, on the trials and tribulations of these lawyers-for-hire.

The Journal editors decided to give the piece a cutesy title by using a play on words: “Lawyers settle… for temp jobs.” Lawyers are supposed to be settling cases, and now they’re settling for temporary jobs. Oh, that’s so very witty.

What the WSJ folks might not have realized is that when you’re an unemployed new lawyer in this kind of economy, or even if you’re an older one, you don’t really have the option of “settling.” It’s depressing, but you kind of just accept the fact that this is the hand that you’ve been dealt.

But maybe there is a bright side to this situation after all. Maybe these contract attorneys are making serious bank in these temporary positions….

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Ed. note: This post is by Will Meyerhofer, a former Sullivan & Cromwell attorney turned psychotherapist. He holds degrees from Harvard, NYU Law, and The Hunter College School of Social Work, and he blogs at The People’s Therapist. His new book, Life is a Brief Opportunity for Joy, is available on Amazon (affiliate link).

My client’s concise estimate of her second year at a big law firm:

“Meh.”

For months, the “career” consisted of one-third idleness, one-third word-processing, and one-third pointless research. That morphed over time into “managing” doc review, which morphed into doing doc review, which translated into odious hours staring at odious documents on a computer and clicking “responsive/relevant” or “privileged” or some euphemism for “embarrassing.” According to rumors at her firm, there’s juicy stuff squirreled away in electronic nooks and crannies – most notoriously, emails from execs’ hiring hookers. To date, my client’s experience of “doing doc review” has matched the edge-of-your-seat excitement of watching drywall compound discharge moisture.

“There are days I want to scream, ‘Who are we fooling?!’” she remonstrated. (Granted, there wasn’t much use remonstrating with me, since I’m her therapist. Sometimes you just need to remonstrate – to demonstrate you can remonstrate.) “This isn’t a career – it isn’t even a job. It’s a joke. Every day I think about quitting.”

But she doesn’t.

Why?

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The normally tepid e-discovery world felt a little extra heat of competition yesterday. Recommind, one of the larger e-discovery vendors, announced Wednesday that it was issued a patent on predictive coding (which Gabe Acevedo, writing in these pages, named the Big Legal Technology Buzzword of 2011).

In a nutshell, predictive coding is a relatively new technology that allows large chunks of document review to be automated, a.k.a. done mostly by computers, with less need for human management.

Some of Recommind’s competitors were not happy about the news. See how they responded (grumpily), and check out what Recommind’s General Counsel had to say about what this means for everyone who uses e-discovery products….

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I recently heard a panel of judges speak about e-discovery issues. Their opinions on several subjects varied, but on one subject they agreed unanimously: Clawback provisions under Federal Rule of Evidence 502 are valuable tools in most significant litigation, but they remain rarely used.

This piqued my interest, so I asked several in-house litigators (not necessarily at the place where I work) whether they routinely seek FRE 502 clawback provisions in their cases. The in-house lawyers do not. And I asked whether outside counsel routinely recommend seeking those provisions. Not surprisingly (because the in-house folks aren’t using them), outside counsel do not.

The judges think clawback provisions are a good idea; in most situations, it strikes me that the judges are right. So what are FRE 502 clawback provisions, and why are inside and outside counsel routinely missing this trick?

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