{"id":332,"date":"2019-09-25T19:33:57","date_gmt":"2019-09-25T19:33:57","guid":{"rendered":"http:\/\/www.discoveroasis.com\/ediscovery-unredacted\/?p=332"},"modified":"2021-03-24T15:05:41","modified_gmt":"2021-03-24T15:05:41","slug":"ediscovery-vendor-consolidation-what-law-firms-can-learn-from-the-housing-market","status":"publish","type":"post","link":"https:\/\/www.oasisdiscovery.com\/ediscovery-unredacted\/ediscovery\/ediscovery-vendor-consolidation-what-law-firms-can-learn-from-the-housing-market\/","title":{"rendered":"eDiscovery Vendor Consolidation: What Law Firms Can Learn from the Housing Market"},"content":{"rendered":"\n<p>In this article, we&#8217;ll talk about:<\/p>\n\n\n\n<ul><li>How law firms hiring eDiscovery vendors relate to contractors bidding out work to specialty subcontractors<\/li><li>Brokering the risks of eDiscovery by consolidating the technical or data portion of the process<\/li><li>How a private cloud offering can help you streamline data, process, and technology to consolidate the cost of eDiscovery<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-embed-youtube wp-block-embed is-type-video is-provider-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"eDiscovery Vendor Consolidation: What Law Firms Can Learn from the Housing Market\" width=\"678\" height=\"381\" src=\"https:\/\/www.youtube.com\/embed\/iVeO3kxvN_w?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<h2>The Cost of Homes in California<\/h2>\n\n\n\n<p>California is in a housing crisis. Mostly in big cities like San Francisco and Los Angeles, but also in towns like Truckee, Santa Barbara, and Palo Alto. Not only are expensive building costs resulting in a housing shortage, but there\u2019s also an influx of wealthy people moving in, leaving long-time natives with a difficult decision: either downsize, find a way to make more money, or leave. I recently read a&nbsp;<a href=\"https:\/\/www.nytimes.com\/2018\/06\/07\/business\/economy\/modular-housing.html\">New York Times article<\/a>&nbsp;on the topic that summarized the problem:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote\"><p>Costs have risen so much that it is not possible to build homes where people want to live at the prices and rents they can afford.<\/p><\/blockquote>\n\n\n\n<p>To understand why this is the case, consider how houses are actually built: First, a developer secures a piece of land and comes up with a plan. Once the money is in place, they hire a general contractor, who in turn, hires subcontractors, who often hire other, more specialized, subcontractors. Dozens of contractors, each with a specialty\u2013from tile to landscaping\u2013all work together to make it happen.<\/p>\n\n\n\n<p>Sound familiar? It\u2019s this same type of teamwork and division of responsibilities that\u2019s often required by law firms to execute eDiscovery effectively. The client hires a firm, that in turn, hires an eDiscovery vendor, that in turn, subs out work to specialty vendors.<\/p>\n\n\n\n<p>And just like a General Contractor (GC), the law firm is responsible for coordinating all of the \u201csubs\u201d to get things done correctly, in the right order, as efficiently as possible, and within budget.<\/p>\n\n\n\n<p>Guess what? Very few (if any) vendors specialize in all aspects of eDiscovery. So, just like in construction, where subcontractors are hiring other subcontractors, most eDiscovery vendors leverage a network of specialists in areas like forensic collections, data processing, hosting, staffing, etc. They also leverage the expertise of other companies for data centers, software development, and part-time consultants to fill out their offering.<\/p>\n\n\n\n<p>That\u2019s a lot of cooks in the kitchen. And hands in the till.<\/p>\n\n\n\n<h2>It&#8217;s Not a Vendor Problem, It&#8217;s a Supply Chain Problem<\/h2>\n\n\n\n<blockquote class=\"wp-block-quote\"><p>C<em>ontractors describe this handoff as \u201cbrokering risk.\u201d What they mean is that while everyone in the chain has agreed to build a certain piece of the project for a set amount of money and in a given amount of time, none of them are sure they can do so as cheaply or quickly as they\u2019ve promised. They broker that risk by paying someone else to do it for them, minus a small fee.<\/em><\/p><cite><a href=\"http:\/\/nytimes.com\/2018\/06\/07\/business\/economy\/modular-housing.html(opens in a new tab)\">The New York Times<\/a><\/cite><\/blockquote>\n\n\n\n<p>Contractors can leverage their buying power to decrease the size of the \u2018small fees\u2019 through negotiating better rates but the fees don\u2019t go away. Even if a contractor gets great individual rates with all of their subs, the overall supply chain is not optimized for low-cost. Resulting in a situation where&nbsp;\u201cit is not possible to build homes where people want to live at the prices and rents they can afford.\u201d<\/p>\n\n\n\n<p>Similarly, the vendor selection process for eDiscovery is usually designed to optimize the price that each contractor pays to their subcontractor. The overall supply chain, however, is not optimized because, in exchange for the expertise they offer, each vendor extracts a small fee\u2013and these small fees add up.<\/p>\n\n\n\n<p>Homebuilders have a new idea: They\u2019re building prefabricated houses in giant warehouses, shipping them to the job site, and assembling them on-premises. They\u2019re also consolidating all sub-contractors under one roof to deliver the most efficient and effective process for building the home. The result? Houses are built at fractions of the cost, and since everyone works directly for the contractor, they\u2019re all rowing in the same direction.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote\"><p><em>The goal of prefabricated building companies is to turn this model on its head. Instead of offloading risk, the contractor assumes all of it. Instead of sending jobs to subcontractors, they hire their own factory workers. \u201cThe general contractor says, \u2018Oh my God, construction is scary, let me broker all that risk,\u2019\u2026I\u2019m saying, \u2018Oh my God, construction is scary, let me plan and control it.<\/em>&#8216;<\/p><cite><a href=\"http:\/\/nytimes.com\/2018\/06\/07\/business\/economy\/modular-housing.html(opens%20in%20a%20new%20tab)\">The New York Times<\/a><\/cite><\/blockquote>\n\n\n\n<p>This idea of \u2018brokering risk\u2019 is particularly applicable in our industry. The firm, like a general contractor, assumes a certain amount of risk when they take on the responsibility of electronic discovery. They broker risk on behalf of their client, specifically: financial risk (controlling costs), data security (cyber threats), performance (deadlines), and quality (defensibility), just to name a few.<\/p>\n\n\n\n<p>So, the question is, what does a \u2018prefabricated house in a giant warehouse\u2019 look like in our world? Is there something firms can do to streamline their eDiscovery operation without taking on too much risk?<\/p>\n\n\n\n<h2>How Do You Provide Cheap eDiscovery?<\/h2>\n\n\n\n<p>Consolidate. <\/p>\n\n\n\n<p>The opportunity for consolidation in our space is with the \u201ctechnical\u201d or \u201cdata\u201d portion of electronic discovery, and not necessarily the \u201cservices\u201d or \u201csupport\u201d side.<\/p>\n\n\n\n<p>We believe that firms should put their data in a virtual warehouse\u2013a private cloud\u2013and thereby consolidate their data center operations, software licenses, technical infrastructure, IT\/Support, and security teams. Having data spread out across multiple vendors, in multiple software platforms, in multiple data centers increases risk, decreases efficiency, and drives up costs.<\/p>\n\n\n\n<p>A private cloud environment (like the one offered by <a href=\"https:\/\/www.oasisdiscovery.com\">Oasis<\/a>) is furnished with a robust software toolkit and serves the same function as the metaphorical warehouse: a central location where all the data, technology, and process can be streamlined for maximum efficiency. This gives firms tremendous buying power where it counts\u2013the commoditized services like processing and hosting\u2013and flexibility where it\u2019s most needed\u2013in choosing service providers based on their ability to provide excellent service, even if they don\u2019t have top-tier data centers.<\/p>\n\n\n\n<p>To finish the metaphor, we feel that law firms should still use subcontractors. Dramatically consolidating service providers (such as \u201cManaged Services\u201d agreements with a single vendor) is rarely the best strategy in our industry. This, for the same reason that it\u2019s not realistic to find a single company that does great carpentry and great landscaping\u2013they\u2019re two different things, and very few, if any, service providers are good across the entire spectrum of eDiscovery.<\/p>\n\n\n\n<h2>Our Advice<\/h2>\n\n\n\n<p>Consolidate the technology aspects of eDiscovery to streamline operations and leverage buying power. But stay flexible with service: keep a short roster of trusted specialty vendors to provide expertise when they\u2019re needed.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Very few (if any) vendors specialize in all aspects of eDiscovery. So, just like in construction, where subcontractors are hiring other subcontractors, most eDiscovery vendors leverage a network of specialists in areas like forensic collections, data processing, hosting, staffing, etc. <\/p>\n","protected":false},"author":2,"featured_media":336,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":""},"categories":[5],"tags":[7,27],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.11 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>eDiscovery Vendor Consolidation: What Law Firms Can Learn from the Housing Market | Oasis Blog eDiscovery<\/title>\n<meta name=\"description\" content=\"Very few (if any) vendors specialize in all aspects of eDiscovery. Most eDiscovery vendors leverage a network of specialists.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.oasisdiscovery.com\/ediscovery-unredacted\/ediscovery\/ediscovery-vendor-consolidation-what-law-firms-can-learn-from-the-housing-market\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"eDiscovery Vendor Consolidation: What Law Firms Can Learn from the Housing Market | Oasis Blog eDiscovery\" \/>\n<meta property=\"og:description\" content=\"Very few (if any) vendors specialize in all aspects of eDiscovery. 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