eDiscovery Dilemma: In-House or Outsource?

As eDiscovery software continues to evolve each year, many legal departments find themselves discussing the same question each year: should we out-source our electronic discovery functions or should we handle them in-house?

Before we can even get into the debate, ask yourself this one question:

Does your legal department have the knowledge and expertise needed to build, lead and motivate an in-house eDiscovery team? Can your team efficiently manage the discovery timeline and direct the workflow?

If the answer is “Yes,” then you can consider in-house eDiscovery. If you aren’t sure of the answer or if the answer is “No,” this debate probably isn’t for you. You need a strong leader who can effectively manage an in-house team.

All that considered, let’s see which of the two options is best.

Insourcing vs. Outsourcing eDiscovery

The first order of business is to determine why you might want to switch from an outsourcing model to an insourcing one. We’re taking this approach because outsourcing eDiscovery is the default system that most companies use. So, we will discuss whether it’s worth making the switch.

Problems Associated with Relying on In-house eDiscovery

The bottom line is that an in-house eDiscovery setup is a cost center on your P&L. You need to determine whether the lower costs will outweigh the initial investment of time and money.

The initial capital outlay is by no means cheap. It includes an annual license fee for the software and its users, the cost for the infrastructure that supports the platform, and the cost to store massive amounts of data. It’s not just storage, but also the security to protect all the data in your storage from cyber-attacks.

Plus, you’ll need to pay for the staff to manage this new software and infrastructure. You can’t just hire anyone either. Your team needs to be well experienced and skilled in the field of eDiscovery and have all the technical know-how. These employees are not cheap.

Another issue is that of keeping up with rapidly evolving technology. If you get your own in-house software, it could start to become difficult to keep up with the latest litigation technologies. While many solutions can keep up with most newer updates, there are game-changing upgrades every so often. Your in-house system may need a complete revamp to take this new update on, which is very impractical.

Benefits of Switching to In-House

We’ve talked about the problems, but there has to be a reason why a lot of companies do end up making the switch. There are a few clear benefits of in-house electronic discovery.

The clear and obvious advantage of having an in-house eDiscovery system is cost-efficiency. There’s no doubt that the day-to-day cost of utilizing in-house software will be much less than paying for an outsourced one. 

You also face much lower risks. eDiscovery is a very complicated process, and outside consultants are vulnerable to making mistakes with your work because they don’t have great knowledge about your firm’s structure, data design, and other factors. In-house teams have in-depth knowledge about your workflows and are much less likely to make any mistakes.

Overall, you get to have greater control over your operations and direct them as you wish with better efficiency and effectiveness.

Choosing between in-house and outsourced electronic discovery isn’t something you should take lightly. Do your research and analysis on the current standing of your business. Determine whether you have the capacity to install in-house software and whether it will pay back the money and time you put into it.

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