For those who don't know, "Silicon Valley" is a comedy on HBO that skewers the real-world Silicon Valley by caricaturing the power brokers and plebes who revolutionize the way we live (via Angry Birds). It focuses on six young guys who found the start-up Pied Piper, and their clashes with the Google-like behemoth Hooli and its egomaniacal clod of a CEO Gavin Belson.
Though the show is mostly satire, a recent episode "Binding Arbitration,” where Hooli has sued Pied Piper over the IP rights to a compression algorithm developed by the latter, hit on the nose the hahaha… wait, you mean this stuff actually happens??? quality of modern day litigation.
Cut to a shot of the Pied Piper incubator, where boxes upon boxes of paper documents sit floor to ceiling displacing cases of energy drinks and coder paraphernalia.
"It's a classic data dump,” a Piper associate quips.
How did those impenetrable reams of paper get there? The miracle of electronic discovery of course! We’ll take you behind the scenes to show, step-by-step, just how this tree-killing quagmire went down -- and how it totally screwed everyone involved.
Hooli's highly paid legal cavalcade meets with Pete Monahan, Pied Piper's once-disbarred team of one, in a Santa Clara courtroom to discuss -- as they are required to do by law -- the chances of settling the case (in this instance, zilch) and the plan of attack for discovery.
The parties agree that electronically stored information, particularly emails to and from Pied Piper's CEO Richard Hendricks (formerly of Hooli) regarding his prospective use of a Hooli work computer to develop the Pied Piper algorithm. If he did, Hooli argues, it owns the rights to the IP.
The parties identify the potential sources of ESI -- primarily Gmail files on the MacBooks of Pied Piper and Hooli employees, including Big Head, an erstwhile Pied Piper associate now failing his way to the top at Hooli. But they don't specify a form of document production or agree to a potential list of search terms that will help them winnow down their vast email collection. The whole meeting lasts eight minutes. Hooli's lawyers are late for an afternoon round at Olympic. Pete is late for a parole hearing.
Hooli is a Fortune 5 company. It has tons of money and a gigantic litigation budget -- and it doesn't really care how it's spending either (e.g. Big Head). "Just win baby" is the legal team's motto. So it cuts a blank check to its outside law firm and has them choose whatever vendor it fancies. The law firm taps the biggest, most well known provider, who has previously done work for Hooli and is relatively familiar with its IT systems.
The vendor, Papyrus Litigation Services, collects the entire workstations of every Hooli custodian in the case -- the pertinent Gmail files, but also a bunch of worthless information residing on the MacBooks of past and present Hooli employees. Hooli IT could've performed a few rudimentary searches on that data with an affordable tool and potentially reduced the collection volume by 80%. It didn't know any better.
Papyrus at least has the sense to perform some basic culling on the data it collects, but the hay-to-needles ratio is still high. Next, it processes all this data at about $200 per GB, formatting this alphabet soup of file extensions into materials that can actually be fed into a review tool. This takes three days, and the resulting review population is enormous. Hooli's outside firm puts 30 junior associates (going rate: $400/hour) on the review, paying for 15 additional vendor licenses just so the associates can get into the platform. The review fleet goes to work, spending the first half of their weekend performing a "first pass" review for relevance and the second half wishing they hadn't been born -- and, also, performing the privilege review so that Hooli's trade secrets aren't produced to Pied Piper.
Because neither party specified a form of production -- and Pied Piper didn't ask to received emails in their "native" state -- Hooli, in a wily bit of sabotage, directs the vendor to print with a Bates stamp each non-privileged document its attorneys flag for production, and dump those on Pied Piper's doorstep. This is a) like converting FLAC files of your favorite songs to individual music boxes that play music box versions of your favorite songs and b) completely legal according to the local rules in many jurisdictions throughout the US.
The Pied Piper guys, being world-class programmers and all, are used to going days on end without seeing the sunlight, a proper shower or solid food -- which is good, because they spend the next several days feeding the documents to a scanner to make them searchable and then manually reviewing the resulting images. They get through, in a productive hour, between 30 and 50 documents. Pete, a doc review vet, can tear through 75 an hour. Even so, this takes a small eternity -- a small eternity Pete and Co. could have spent prepping their defense. The farce of it all, of course, is that agreeing to a native production and, better yet, sharing the same discovery platform, would have eliminated the bill-churning, time-sucking, to-paper-and-back gauntlet that a lot of parties unwittingly expose themselves to. Had Pete simply asked for documents as they were created and used in their natural state, his clients wouldn't have ended up with half the Redwood Forest in their living room -- and they could have been reviewing documents immediately.
There two major ironies here. First, what would seem on its face to be an absurdist satire, like the rest of the show, of how the discovery process works is actually a totally legitimate depiction of litigation 15 years into the 21st Century. This is totally normal behavior in very large segments of the legal community. It's very expensive. It's mind-bogglingly inefficient. It's really, REALLY risky. And it's one of the reasons why discovery is the biggest cost in most cases... But it is totally normal. And, in this case, it tipped the scales in favor of the bigger, deeper-pocketed Hooli. Under this discovery regime, the party with the bigger budget always wins.
Secondly, you'd think organizations that champion leanness and agility in their business operations would apply that same rigor to their legal departments, but that's not always the case -- especially when they leave it to outside parties to call the shots. When there's a blank check on the table and low expectations, there are few incentives to do things the right way. Just ask Big Head.
Robert Hilson is a director at Logikcull. He can be reached at email@example.com.