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Financial Services Industry Weighs Rewards, Risk of Automated Review

As Jim Wagner and Matt Miller have discussed in recent blogs, the word on the street is that the age of automation has arrived for document review. This presents unique challenges for the financial services industry. As an industry that is inundated by document requests from regulators and litigants, but (to quote a client) “does not want to be on the bleeding edge of technology,” our financial services clients are looking for guidance on how to avail themselves of the efficiencies and cost savings presented by automated review while also managing risk.

Automated Review in the Financial Services Industry

This year at LegalTech New York, I moderated a panel discussing automated document review in the financial services arena. Participating with me were representatives from large financial institutions with extensive experience negotiating e-discovery agreements with regulators and litigants. There was a consensus among the panel that a vendor must take certain steps to ease our more cautious clients into the automated review process. These steps include

  1. Create/maintain a robust privilege process — If you do not already have a robust privilege process that is designed to capture all in-house attorneys and outside counsel, create one. If you already implement a detailed privilege process for your document reviews, do not recreate the wheel for automated review. Find a way to test implement a proven privilege process on all documents to be produced.
  2. Test your technology — Build process by testing your technology on data sets that will not be produced, such as internal reviews and in-bound productions. Provide detailed reports on your tests to your internal clients and business partners. Education of internal clients and confidence in your process will promote automated review as a reliable, cost-effective solution with which your clients are comfortable.
  3. Inform your opponent of your strategy — You are not required to give your opponent access to the technology underlying the automated review. As Judge Peck commented, what is more important than the algorithm behind automation is the resultant precision and recall achieved by the tool and your process.
  4. Manage your risk — and your perceived risk — A critical aspect of DiscoverReady’s approach to automation is the ability to adjust the level of automation in the review. Especially where manual review has long been considered the “gold standard,” we want our clients to be able to use automation in a manner that matches their appetite for computer-assisted review. The result is that our clients have the ability to test automation while incorporating document-level decisions made by the senior most members of their litigation teams.

At DiscoverReady, we anticipated these issues and took these steps several years ago when we developed our i-Decision® service. Judging from the discussion at LegalTech, we may be at a tipping point for automated review — as long as we can prove its value to clients while addressing their concerns about potential risks.

Maureen O'Neill