In-house counsel for financial services companies, welcome to your ongoing nightmare– the third-party subpoena. Left unattended, this monster can drain corporate resources while masquerading as a necessary cost of business. It’s time to wake up, weaponized, and get this creature under control.
So how did the third-party subpoena grow into such an organizational behemoth? Four key factors have transformed this otherwise harmless legal document into the unruly beast it is today:
1. Data proliferation and burdensome data identification
Technological advancements dramatically increase data generation which triggers a chain reaction. Data is generated at an alarming pace. As the amount of data sources increases, the platforms or systems used to store such data diversify. Once more data is created, more data potentially is subject to request in a legal proceeding. Without an accurate data map, completing a third-party subpoena response could lead to a game of legal hide-and-seek. More places to hide mean more places to look, and additional players may be required to locate and review the relevant data for production.
2. Unpredictable and often overwhelming, volume of requests
The unpredictability and possibly tremendous volume of third-party subpoena requests can be problematic. Corporations in the financial services, insurance, telecommunications and technology industries receive hundreds of third-party subpoenas daily. This massive workload results in almost insurmountable subpoena backlogs leading to an increased likelihood of noncompliance because of delayed response to production requests.
Excessive corporate growth also can add fuel to this fire. Mergers and acquisitions can contribute to already growing backlogs because the owner of the subpoena processing task generally inherits additional third party subpoenas as a result of such corporate transactions. This volume increase due to M&A activity often is unanticipated, requiring additional resources. If budget constraints don’t allow additional hiring to handle subpoena requests, existing employees are drawn in to help and are soon working beyond the scope of their typical job responsibilities. These employees often sacrifice higher value work they are being paid to do in order to work on the subpoena requests.
3. Confusion in task ownership and characterization
Third-party subpoena processing often suffers an identity crisis with respect to its operational characterization. Some owners of the task treat it as a traditional business operational function while others treat it as a legal function. Some have even characterized it as a technology operational function, believing the owner of the technology is in the best position to ensure processing and compliance because they control access to and location of the relevant data.
Since a subpoena is legal in nature, the legal department seems best suited to manage the subpoena compliance function; however, such a decision is sometimes driven by budget and resource availability within an organization.
Tasking a non-legal department with subpoena response responsibilities can create confusion and increase risk with respect to the overall administration of the subpoena compliance function, as there is a greater likelihood of producing irrelevant, privileged or proprietary data. When this occurs, decisions that make sense financially may appear to be highly illogical or even dangerous.
4. Decentralized task ownership creates budget and staffing challenges
Decentralized ownership of the subpoena processing function can also create problems because no one department “owns” the process. Perhaps multiple business units participate in the response process and their activity is largely dictated by the subject matter of the production request and the business unit’s relevant data. In this scenario, it’s hard to know who is responsible for what and where the resources should come from to Since a subpoena is legal in nature, the legal department seems best suited to manage the subpoena compliance function www.integreon.com 3 address the problems. So many stakeholders are involved if no one department takes responsibility for the overall process, and this can lead to budgetary and staffing challenges.
When it comes to dealing with third-party subpoena requests, the challenges for in-house counsel are many, the rewards are few, and your company is not even a party to the lawsuit! The risk of noncompliance is an omnipresent danger as you navigate each potential pitfall. Ineffective management of subpoena processing can result in motions to compel, sanctions or further entanglement in the lawsuit, this time as a named party. Despite the risks, it is possible to tame or even defeat this beast with a single weapon—an effective subpoena compliance process.
Consider these best practices to tame the third-party subpoena problem at your company
- Develop an audit trail of relevant tasks to accompany your process. This will encourage uniformity in responses, accountability, defensibility and repeatability.
- Integrate your process effectively with existing software to efficiently track the subpoena process from intake to production.
- Leverage Six Sigma-based methodologies to drive efficiency and cost-effectiveness.
- Ensure that your reporting capabilities are transparent and provide insight into each stage of the response process from subpoena intake to production. Reporting should provide a clear window into intake, triage and production activities so you can effectively allocate and manage staffing to ensure timely compliance with production deadlines.
- Clearly define who owns the subpoena response function. This includes assigning employee roles
and responsibilities for all teams engaged in the process. Such clarity encourages accountability and eliminates confusion.
- Create a support model flexible enough to drive speed and cost efficiency.
- Take time to document your process thoroughly, including detailed workflows, standard operating procedures (SOPs), and a system of checks and balances that allows for timely and accurate execution.
- Adopt the mindset that subpoena processing can be a cost-neutral or revenue generating activity,
not just a cost of doing business.
- Manage all fulfillment tasks in one central software platform.
- Minimize risk and enable timely submissions of subpoena productions.
If you find your existing subpoena compliance process is deficient in one or more of these areas, your organization may benefit from a process assessment. An assessment will assist with identifying process gaps and other areas for improvement, such as cost-and-time efficiency.
If you do not have a subpoena compliance process or lack the additional resources required to effectively manage your process, engaging a managed service provider like Integreon and utilizing a managed service delivery model could help.
Integreon has scalable onshore-and-offshore capabilities with resources to provide you with a dedicated team to respond to third-party subpoena requests, freeing your resources to focus on other high-value work. Having a dedicated team will offer you greater peace of mind. Subpoena productions will have been done consistently, accurately and timely submitted because your team can focus on one task instead of juggling multiple responsibilities.
The third-party subpoena compliance monster is not going away. If anything, it is getting bigger and more formidable. Having the right arsenal of tools including people, process and technology is the best approach to taming this beast and emerging victorious.