On May 29th, 2008 Judge Paul Grimm ruled in Victor Stanley, Inc. v. Creative Pipe, Inc. that defendant Creative Pipe Inc. production of 165 privileged documents to plaintiff Victor Stanley Inc. waived its privilege. I am a non-lawyer with extensive process re-engineering experience. From my perspective, this case offers an important lesson about resourcing projects appropriately.
Creative Pipe retained an outside e-Discovery expert to develop searches to identify privileged documents. The company did not test the 70 keywords the expert identified which led to producing at least 165 privilged documents. Creative Pipe moved to return of these documents but Judge Grimm rejected this request. He reasoned that the release of documents was too extensive – a systemic process failure of process rather than a single accident. Creative Pipe could have easily and quickly recognized the problem on its own had it sought to but instead, the plaintiff found the problem. He also considered the fact that defendant had proposed a clawback agreement but dropped it when they were granted a 4-month extension.
I’ve heard some lawyers say this case will have a chilling effect on e-Discovery and others say it is a wake-up call to lawyers about the depth of technical expertise required. From my non-lawyer persepctive, these views seem to miss the real problem. Every law firm and legal department is squeezed for discovery resources. Creative Pipe’s fundamental mistake was likely failing to commit sufficient resources to complete work to which it had agreed to do.
When did the company realize that the privilege review was going poorly? With a 4-month extension, they probably thought that they had ample time (otherwise they would not have dropped the request for the clawback). In a perfect world, it might have been enough time. But in the real world, complications and new projects always pop up unexpectedly: staff are unavailable, systems fail, work progresses more slowly than expected, etc. And then the big problems start, for example, not having enough time to test search criteria. Or not having enough staff to check documents before producing them.
The solution to this problem seems obvious - just retain the right resources. A few years ago, that might have been impossible. Today, however, many e-discovery firms can provide support throughout the whole litigation lifecycle. Litigants can select a series of specialists or a “general contractor” who has all the resources under one roof. The key is that lawyers should work with e-discovery vendors before a case heats up. Lawyers need to form relationships and understand the benefits of flexible resources before the next crisis. Moreover, lawyers cannot afford to delay key decisions concerning documents.
As a manager, consultant, and functional proces engineer, for me, this comes down to “Operations 101.” Big problems often start with inconsequential (and therefore overlooked) lapses. Everyone runs out of resources at some point. Take the necessary steps today so that process mistkaes don’t cost you more than handling e-discovery properly from the outset would.
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