The story underlying this article is that OpenText Discovery, has sold cloud licences to Eversheds Sutherland in London, enabling the firm to take control of the management of eDisclosure without having to be responsible for the software and infrastructure. There is a press release here with the story.

It is worth first looking at the context in which a large law firm makes such a decision. The wider story is to about law firms resisting the move towards sub-contracting the disclosure function to others, fighting back by effectively becoming eDisclosure providers in their own right. It is not size alone which makes this right for some firms, but any firm with a strong disputes department, and with a big involvement in regulatory matters and investigations, in cross-border disclosure, and the rest must surely be considering which of several possible routes they should choose for disclosure management.

In the early days of electronic disclosure / electronic discovery, law firms bought licences for software to run on their own servers. They invested in people and skills as well as in technology, and took responsibility for keeping the systems going – keeping the hardware running, software updated and the data backed up.

There is a not uncommon cycle for businesses, including law firms, in which a business expands into areas ancillary to its core functions, either to increase revenue by selling the results or to keep costs down. Often, after a while, somebody asks why the business is performing tasks outside its core areas, and non-core functions are outsourced to others.

This cycle is not necessarily irrational. A change of management, change of market, or a change of accountants may dictate a different approach to getting the work done. As Simon Price, Managing Director of OpenText Discovery in the UK, pointed out when I spoke to him about the Eversheds Sutherland deal, in this case the move towards in-house control is driven by developments in the available technology.

The arrangement between OpenText Discovery and Eversheds Sutherland means that OpenText Discovery hosts the software and takes responsibility for maintaining and updating it; OpenText Discovery also manages the Amazon Web Services servers on which it sits.

Apart from that, Eversheds Sutherland service their internal clients for themselves. They can come back to OpenText Discovery for project help if necessary – if, for example, they find themselves under-resourced at a particular time – but the default is that everything is done in house, initially with a small team, but one which will grow to meet demand.

Cost and security are not the only drivers here. The arrangement allows the Eversheds Sutherland lawyers to leap straight into review by direct liaison with the internal team without waiting for a beauty parade of providers and a negotiation of terms.

Another benefit of the arrangement is that Eversheds Sutherland can host as many matters as they like, including relatively small ones which would not otherwise warrant putting into a system. There is an increasing trend towards the use of Subject Access Requests, something which will become more onerous once the General Data Protection Regulation takes effect next May. Action on these, or on the data for internal investigations of whatever size, can get going immediately. One overlooked aspect is that in-house training and skills can be spread across all the firm’s matters.

The arrangement is predicated on an estimated capacity. If there is a temporary spike in demand, then the firm can increase its capacity immediately – part of the joy of using AWS is that the ability to grow and shrink capacity is more or less instant. If the firm finds that it is often going over its capacity, it can go up to the next volume band.

Eversheds Sutherland is the first London law firm to enter into such an arrangement with OpenText Discovery, although OpenText Discovery has similar agreements with US law firms and with regulators.

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