The roots of Inspired Review’s model goes back to 2005 or the “glory days” for Law Firms and Staffing Agencies, who were taking the lead in providing inefficient processes and high cost to their corporate client. It wasn’t until we were involved in staffing a massive Pharmaceutical Case, where the idea to change things started. In-House Counsel hired a consulting firm to vet out a new outsourced model that would provide a more accurate and defensible review model by incorporating statistical sampling, search, QC and Validation Methodologies.
Our CEO, Michael Dalewitz, felt that this was going to become the standard practice of the industry and hired a statistician to help him develop one of the industry’s first accurate, defensible and cost-effective Managed Review Processes as he founded Peak Discovery. He also felt that in order to manage teams of contract attorneys effectively and put the best and appropriate teams on the right cases, a Metrics based approach would be the way to vet out more accurate and productive reviewers. He hired a programmer to develop the industry’s first document review metrics software that in near real time would track the hourly document review productivity, Accuracy based on a QC Methodology and analyze the cost structures of reviewers, teams and tasks and the document level.
This Metrics Based approach with Intricate Reporting and Statistically Validated QC Processes launched Peak Discovery as a multi-million dollar leader in Document Review.
In 2008-2009 (the “Too Big to Fail Era” and “the Great Recession”) began with corporate clients needing to lower document review costs even further. So, three solutions became the obvious: 1) Lower the Pay Rate of the Contract Attorneys so you can lower the Bill Rate 2) Offshore to India or 3) Find New “Lower Cost” Review Areas On-Shore.
We used our Metrics System to track the results of each of those solutions
1) The outcome of lowering the rates of “hand to mouth” contract attorneys, who have traditionally been treated like bottom of the barrel, fungible workers resulted in about a 25% productivity loss with decreased accuracy results. Meaning, NO REAL COST SAVINGS, AND INCREASED RISK
2) India Seems on Paper like a winner: $25/hr instead of $50/hr in major metropolitan areas, but if India is averaging around 30 documents per hour and on shore reviewers are averaging 60 documents per hour, THERE IS ONLY A PERCEPTION OF SAVINGS. There are also cultural, language nuances, and the increased risk of failed accuracy and control.
3) Lower cost on shore areas like NC, TX, OH, MI, etc.: The hourly rate may be $35-$38/hr for first pass review, but if they are averaging 40 docs per hour again results in no real savings and dealing with a smaller sample population pool, with less experience.
This was the time period where an inefficient model got worse and privilege documents became more likely to be released. Instead of fixing the process, the industry arrived at “The Age of the IRON CLAD CLAWBACK” or “OOPS MULLIGAN.”
We decided to find ways to fix the process and do it in a more cost-effective, defensible and novel approach.
The 2 Metrics that are necessary for true analysis of cost are:
1) How many documents did you review…accurately? and
2) What did it cost you?
To this day, the most important metric to see how efficient your eDiscovery spend was and how efficient your review process and team is largely unused by the vast majority of corporations.
If the industry average for First Pass Review is around 50 documents per hour, then analyzing your per document cost is easy. For Major Metropolitan Areas, you typically are paying $45-$50/hr, so your cost just for a body in a seat to review your documents is close to $1.00/document.
Our Model is simple - if lower pay rates, bad environment, and bad culture led to inefficiencies, lower productivity, and poor accuracy then paying higher wages, a career path, and a professional environment will lead to better results.
So a Focus Group of about 50 Contract Attorneys were interviewed to find out more information and to present our idea for a new model centered around an efficiency based bonus in a per document billing structure to our clients that would reward for high productivity combine with accuracy.
Most of the group was so jaded by the prevailing culture of other agencies and firms that they really did not want to be doing this type of work. They preferred falling under the radar, even though they could do better. They also said that once projects are winding down, they slow down the review in order to prolong the. De facto unions formed and reviewers would tell their coworkers who were going fast to slow down, so as not to take money out of their pockets. A small minority of the group interviewed found this culture distasteful and welcomed the opportunity to make more money, possibly get a permanent job as review manager, and be treated as a professional. It was this group of reviewers that make up our teams today.
We also came to the realization that document review is a skill set. Not every attorney has what it takes to be a top tier document review professional. It is all about speed reading, comprehension, issue spotting a decision making, and stamina.
Efficiency, in and of itself, is not enough to make this model successful, there would need to be a very robust QC process behind it to minimize risks. We took our already robust QC Workflow and Methodology and new statistical model of ranking and rating different types of errors that could occur in a document review, specifically surrounding privilege.
So the model was launched and here are the basics:
-A Market Hourly Pay Rate was given to Contract Attorneys
-They would receive an initial first pass review score based on productivity
-We would run about 30-40% QC with our “Document Review Roadmap” and run Batch, Targeted Search QC, Privilege QC, and Statistical Validation to produce a Production Ready Delivery
-Each Error that is found has a certain weight to it and will scale back the first pass review rate score
-A final Throughput Score will be computed for each attorney
-Bonuses will be paid to the attorneys based on their individual contribution the success of the project
-In almost every case, a bonus has been paid out that raised the reviewers’ pay to much higher than market rates
-In over a hundred cases and millions of documents reviewed in this model, we never have had a clawback invoked.
Bottom Line: Inspired Review has solved the problem of people and process in its novel approach to create efficiencies that will now “disrupt” the commoditized market and give unsurpassed levels of cost and defensibility.