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March 2001
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MIS@E.I. du Pont de Nemours

Rethinking Document Management Systems

Outsourcing litigation support services reduces costs and improves service.

By Jim Michalowicz

Rethinking Document Management Systems WITH AN international network of "primary law firms" and an in-house legal department with 200 attorneys, organizing and sharing documents at DuPont has always been a challenge. Our litigation support needs have quickly outgrown the capabilities of traditional and even advanced systems. As a result, we approach document management as an "evolutionary" process.

Headquartered in Wilmington, Del., E.I. du Pont de Nemours operates in 70 countries and has about 94,000 employees. Our scientists are involved with food and nutrition, health care, apparel, home, construction, electronics, and transportation. The company has been research-focused since inception in 1802. Legal matters have become increasingly inherent to DuPont's business practice, especially over the past decade.

By 1992, DuPont had engaged more than 350 law firms to provide outside counsel, and our DuPont's litigation docket had grown to more than 4,000 cases. To better manage these increasing pressures, we instituted programs to guide evaluation and decision-making processes.

Our first step was to create a "Legal Services Convergence Program," to reduce the number of outside firms and to establish a network of "primary service providers" for litigation support. We first created a network of 34 primary law firms, with specific jurisdictional responsibility. The streamlined caseloads reduced costs, improved communication, and built stronger relationships with firms in the network. The next step was to select primary service providers. While our first target was document management services, we also needed services to support jury research, demonstrative evidence, economic damage assessments, temporary staffing and court reporting.

A bit of history: In 1990, DuPont had established an in-house litigation support team, which had grown to 20 permanent staff and 220 temporary employees by 1993. The caseload quickly became cumbersome, so all document processing and production was outsourced to Quorum in 1994. Most of DuPont's litigation support staff transferred to Quorum's payroll, and with cost controls, we reduced both labor and rental expenses. Quorum remained DuPont's document service provider until 1999, when it became apparent that we weren't taking advantage of the advanced document services technology.

By '99, we realized that we needed a litigation support system that could share documents between DuPont our primary law firms (who were maintaining duplicate document depositories and databases supported by multiple and various litigation support systems).

Aside from DuPont's Lotus Notes-based Extranet, which offered limited capacity for basic communication, we needed a centralized, specialized platform that could support discovery document databases across all of DuPont and the firms.

This would be no small task, considering the required integration of duplicate depositories and existing software packages into one system to maximize efficiency, ease of use, and ease of access.

A committee was created, with members who were directly involved in document service processes and day-to-day transactions. It included DuPont legal assistants; several litigation attorneys and legal assistants from our outside firms; and members of our DuPont legal I.T. group.

In the late 90s, we also introduced a "Six Sigma" program through-out Dupont. The statistically-driven "total quality management" and cost-cutting program was conceived by Motorola Inc. in the mid-80s; popularized by General Electric Co.'s Jack Welch; and has been adopted by corporate giants, including Allied Signal Inc. and Raytheon Co.

Using the "Six Sigma" methodology, we outlined our requirements, and established 30 "functionality" specifications, including discovery management, transcript management, privilege tracking, production tracking with "foldering" capability. Requests for proposals were made to Daticon, IKON, Quorum, and Steelpoint, and we began the interviewing process.

We also considered companies that were willing to customize their technology to meet our precise needs, as well as make recommendations for how the software could adapt through changes the department might undergo in the future.

Ultimately, the group chose Conn.-based Daticon Inc., and its Windows-based software, Virtual Partner (formerly known as Daticoder II).

Production Tracking

We approach document management as an evolutionary process.

-Jim Michalowicz

One of the critical functions performed by a litigation document management system is document control. For example, we must create a unique number for each document sent to opposing counsel, and track the activity of those documents. In a number of our cases, the same documents are produced repeatedly, but for different parties. Therefore, it is crucial that we know when, where and to whom the documents have been produced.

The Virtual Partner software addresses this need by updating records with tracking tags, to audit activity of each document record. This assures that opposing parties collect documents from DuPont through proper discovery procedures. (It also reduces the risk of inadvertent production of the wrong documents to the wrong parties, minimizing discovery abuse allegations.)

Standardized System

Document management can play a big role in the ultimate cost of the litigation, and there is plenty of room for variation in how this process is performed.

Do you photocopy or image? Produce paper or electronic documents? Even the number and types of fields required in an index can affect the bottom line.

Historically, we handled e-mail discovery by identifying people with potentially responsive documents, printing out all documents, and retaining what was responsive in paper form. We would then tag the hard copies and send them to our litigation support provider for coding and imaging.

Daticon, however, can collect and import e-mails and records already in digital format. With electronic discovery capabilities, we eliminate the conversion to paper and streamline the data conversion process.

The end product is a database with searchable OCR text, bibliographic coded data and images. This also reduced costs by 75 percent.

During the initial rollout of Virtual Partner to the law firms, we confronted several connectivity issues, where users were locked out of the database, bounced off the system, or experienced screen freeze.

What made this most challenging was determining the root cause, and every situation was different.

Regardless who was affected, members of the law firm's I.T., DuPont I.T., and Daticon came together, which was a drain on resources. Sometimes, weeks were spent diagnosing the problem to find out if it was related to the DuPont wide area network; the law firm's firewall; or a function of the Virtual Partner software.

Service Side

While our move to Daticon's technology had improved some of our system, our service component -- still outsourced to Quorum -- hadn't kept pace.

I realized this was a problem while walking down the office hallway one evening, only to hear the sound of repeated Bates number stamping.

We had addressed the back-end (an image-enabled retrieval system) but the front end was still geared to processes that included manual numbering systems, privilege and confidential stamping, and paper "cut and paste" redactions.

It was clear that we had an inefficient and multiple-step paper processing process feeding a state-of-the-art litigation support database system.

Using our "Six Sigma" methodology, we evaluated the efficiency of the litigation support service process. We tracked "paper touches" for each transaction, and with every "touch" we saw increased chances for error (document integrity) and increased costs. So we defined paper touches as process defects! A process map that recorded the number of paper touches was created, supporting a rationale to introduce document imaging at the beginning of the process.

The sensitive nature of documents requires in-house imaging. We interviewed Quorum, Daticon, and IKON. Daticon personnel were amenable to bringing corporate legal departments together to develop document management strategy and supporting systems.

For years, I had bemoaned the costs of system customization when our basic document management needs were essentially the same as other large corporations. My philosophy also supported the decision to tap Daticon as DuPont's facilities management provider.

The decision to outsource has helped us be more efficient. We needed a facilities management operation that could handle litigation projects of any size, up to 50,000 pages or more. Daticon instituted its Virtual Partner Island (VPI) model. It staffs the VPI with 21 full-time employees, including two specialists who support database user training and troubleshooting. Documents can be coded directly from on-screen images and do not require printed copies of images for coding (an immediate cost savings). Frequently used information can be selected from pre-defined lists using a mouse, eliminating many keying errors.

The VPI now handles all of DuPont's litigation projects. It can send any overflow to its other Daticon production facilities to meet expedited timeframes and excessive volume.

The VPI provides DuPont with a single point of contact, standardized pricing, consistency in quality and service, and the ability to track and measure critical data.

Find a Site

Finding a location for the VPI took us no further than our law library. Given that much of the library materials were available online, we decided to donate the hard copy volumes to law schools.

The space needed to keep the cumbersome law books was converted into a center that supported a scaled-down library, the VPI, and a software training center.

Another requirement: Daticon's systems had to synchronize with our Extranet, our virtual private network (VPN) linking DuPont and our outside counsel and providers.

Daticon integrated the project status functions with Virtual Partner's document processing features.

The Virtual Partner Island team now can automatically post the status of any project (electronic discovery, coding, and imaging) for review by any authorized DuPont user.

In addition, this tracking system records a run rate for "Six Sigma" costs savings associated with the improved process established in the Virtual Partner Island.

The Results

After years of deliberation on how to build the most cost effective and comprehensive document services network -- incorporating shared access, quality controls, instant status reports, and overflow capabilities -- we are pleased with the result, and calculate that we have saved approximately $3.5 million dollars since 2000.

We now are investigating ways to use the Virtual Partner Island outside the legal department, and to apply the document management techniques and technology to other DuPont businesses.

Jim Michalowicz is manager, legal services, of E.I. du Pont de Nemours, based in Wilmington, Del.

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