This article explains the basics of first level document review, why to consider outsourcing this function and how to go about selecting a service provider to work with.

First Level Document Review: What It Is

The primary purpose of first level document review is to review documents and determine whether or not they're "responsive" or "non-responsive" as they pertain to a specific legal case or issue. In essence, first level document review forms part of the discovery phase of litigation. It is performed prior to producing and after receiving documents pursuant to a legal "Request for Production of Documents." It's the initial review phase that helps narrow the document set to a responsive and workable data set for later, more senior review.

Typically in litigation, vast amounts -- often numbering in the millions -- of documents are routinely being reviewed by teams of law firm associates, contract attorneys and paralegals, in an effort to identify whether or not documents are: 1) relevant to the case at hand, 2) confidential, 3) privileged/protected, and 4) "key," or "hot."

Litigation aside, aspects of first level document review are also routinely performed in matters of regulatory compliance and corporate due diligence.

The Technology Fix

Technology has been a mixed blessing in the litigation cost-hike dilemma. On one hand, the growing amount of ESI is a large part of the problem. For example, well over 90% of all current data is being produced and stored electronically. People are storing and producing more ESI because the costs associated with it are practically nonexistent. Therefore, as ESI increases, so do the hours and expenses associated with first level document review.

On the other hand, the last 10 to 15 years have seen a dramatic transition that has allowed technology to play an integral role in the document review process. Gone are the days when attorney and paralegal teams gathered in large rooms or warehouse-style environments (known as "war rooms"), meticulously going through bankers' boxes filled with paper documents in preparation for litigation. Instead, the war rooms have transformed into computer-filled rooms where teams of people are armed with electronic platforms and technological solutions in an effort to identify responsive data.

However, even with the best technology and electronic discovery (e-discovery) practices, the truth of the matter is that robust technology can only do so much. It is understood that current industry e-discovery best practices can reduce a data set by as much as 70%. But, like many litigation cases to date, even after performing e-discovery best practices, what if that data set still consists of 25 million pages to review?

Core competencies are the identified areas of expertise a company has leveraged in the marketplace. What these companies rarely are capable of is creating value in non-core functions like human resources, technology, sales & marketing and transportation.

Third party outsource management companies are flourishing as more businesses come to grips with the reality of higher efficiencies and value that can be leveraged in their non-core competencies for a better focus on what they do best to create real profitable growth.

The drivers of this clear trend are new scalable technologies otherwise not affordable by an individual business, increasing pressure to compete on price in a commoditized world and recognizing differentiated customer needs that require support teams companies have a hard time resourcing. Third party outsource firms have created industry leading technologies by sector, attracted clients for critical mass to leverage greater spend savings with critical providers and understand the need for sourcing dedicated account support teams. This outsource business model is highly efficient and a tremendous value for businesses who understand the need to focus on their core competencies for real profitable growth.

Often we hear business executives complain about the number of outsource companies knocking on their door. They wonder how can so many of these entities exist? The answers are the need/demand is so great, greater scale translates to more savings potential and scalable technology with dedicated teams can be leveraged for the benefit of all concerned. Outsource providers see the need and can deliver real value for all engaged. As the trend business outsourcing increases, more providers are entering the market and this is great for competition and deliverable values. Instead of being aggravated about this new trend in business management, leaders should embrace the opportunities that are being presented. Rather than a loss of control, businesses actually gain more control of their processes, increase measurable results due to enhanced visibility through technology and develop greater operating efficiencies.

The process of reviewing potential outsource vendors can be daunting but none the less worth the effort. No doubt there will be many internal parties resistant to change as a real threat to their employment. Often the CEO is reluctant as department heads are loyal and usually able to create reasons why they performing well enough and share concerns over a perceived loss of control. The selection of an outsource firm should be by the executive team and not by those potentially impacted by change. Since outsourcing should displace at least some current workers, employees with transferable skills should be integrated into new challenging positions to demonstrate their value or given a severance package if possible. The reality is they currently part of the problem, not the solution, so action is best for all.

We have clearly moved out of the industrial age, are well into the technology age and entering the knowledge age, where traditional experiences and past job positions are ill equipped to create value in the transforming workplace. Companies are compelled to be on the leading edge of technology support, leveraging spend for savings and customizing customer support if they want to grow profitably. Why settle for mediocrity when you can leverage for the best?

Transportation is an excellent case study. In the last decade the last vestiges of a regulated transportation network have dissipated. The grid of mode options and complexities of service options are so complex, no one asset company is large enough or nimble enough to handle all a given business supply chain needs. Technology has only recently been scaled by third party transportation management companies to create real time supply chain visibility and therefore efficient, reliable and best cost provider selections for each movement of goods. The spend savings, real time inventory visibility and support that third parties can provide are miles ahead of what any individual company can economically accomplish on their own. Smart outsource firms work on a no cost contingency basis with results guaranteed in contract. Internal department heads will rise past war stories and shortcomings with previous attempts to change but the reality is those who do not adapt to more favorable service/cost structures are doomed to lose market share and profits to those of their competitors who do.

Recognize what competencies you are great at as well as where functions in your business are not a core competency. Avoid the temptation to just turn to big providers in the service you looking for as a new wave of boutique providers are often more creative with technology and leveraging shared spend savings. Avoid a bid approach as not the best way to determine who truly best for your business. Much like an independent insurance agent, there are players in the field who will study your needs and research for the highest value that meets your customized needs at no cost to you. There are providers more suited to your unique needs, seeking help in discovering the right fit from the many choices only makes sense.

Letting go of a perceived need for control, past allegiances internal and external, as well as past experiences can open up resources that will be focused on growing profitable new business. This is leadership versus management with actually more control over your true business and deliverables that will ensue.

Change requires courage. Change will be great when it translates to faster growth and real bottom line gains for your business. Outsourcing is changing the way business is done for those who truly value excellence and shareholder value. Let go and be great.

It usually starts with someone descending from on high—an upper floor executive suite where they have met with the chief HR officer. (No, they are not divine; a few just act like they are.) They come to your office and pronounce in a booming voice, “I have been to the Summit, and I have come to tell you that you shall outsource staffing in 2009 and you will surely let our people ‘O.’” Or maybe they just drop a memo on your desk and run away before you can complain about not being consulted.

To be fair, outsourcing staffing can be a very good thing and something you have already considered. Now you have the task of running a selection process and leading your team and the hiring managers through the transition.

There are five commandments of a good process. Not everyone will agree with these, and as always, I celebrate their right to be wrong. Do these well and you will have a much smoother time.

• First Commandment: Know thy numbers. Many companies don’t keep good data, although it only takes about 90 days to get snapshot data on funnel metrics. Important ones are resume submissions to phone screens, phone screens to live interviews, interviews to offers, and offers to acceptances.
  
  You also need comprehensive cost data. Not just agency spend and advertising, but the cost of your overall staffing operation, including fully loaded employee costs, relocation costs (often overlooked, but if you recruit more locally, you can save a lot), and costs for technology, tools, database licenses, and technology upkeep that may be in scope. If you do not know your numbers, providers will guess. If they are conservative, you overpay. If they are aggressive, they will lack the resources to perform.



• Second Commandment: Know thy scope. You need to determine early on what will be handled by the retained organization and what will be outsourced. This can be done by function—such as sourcing, screening, or administration—or by job family. Many firms use a matrix approach where they retain all responsibility, for example, for the executive level, but will outsource everything but the strategy development at lower levels. This varies by company but must be determined in advance.



• Third Commandment: Do not focus on cost per hire as a metric. It doesn’t tell you nearly enough and is far too heavily relied upon. You should focus on overall staffing costs and the ratios moving up and down based on the size of the company. You can do a lot of hiring because you have high turnover and bad quality leading to low cost per hire.



• Fourth Commandment: Do not have an arm’s-length process. This is contrary to what you may hear from advisors, but they are there to advise. It is your process. Procurement processes that are too “arm’s length” rob you of an opportunity to see if there will be a good cultural fit. You do not want to sign a three- or five-year commitment with someone with whom you have never had an unchaperoned date. Down-select to two or three firms quickly, and then spend quality time in the process with them to know which firm best fits your company.



• Fifth Commandment: Thou shall communicate a lot. Remember, once you pick a provider, one thing you have in common with them is a client: the hiring managers. You need a communication plan to set expectations and describe processes and timelines and a schedule of meetings as part of the implementation process. This is a critical and often overlooked aspect of RPO. You need to constantly communicate with the provider, the HR partners, and the hiring managers about what is happening at each phase of implementation.

Remember to focus on the strategy and not the details. Let the provider worry about their details. Allow them to use the technology with which they are most comfortable and to design processes that accomplish your objectives, but you do not need to prescribe every step of what they do in their shop. Follow these commandments and your RPO could be a miraculous experience…or at least just very good.