Grantham, Carson and Jarvis LLP, located in downton New York City, was established in the 20th century and there have been Granthams in the role of managing partner since 1962. The founding partner Grantham attracted corporate clients in the financial services, entertainment, insurance, communications and manufacturing sectors. The firm served these clients well over the years and was rewarded with faithful loyalty. There were occasional troubling signs in the 1990s, though, that the clients found the cost of litigation prohibitive, especially the fees paid for document review. By 2005, some were talking about Alternate Fee Arrangements and Outside Counsel Guidelines, and challenging the hourly billing practices. Clients in heavily regulated industries began to drift towards more progressive firms. However, the firm could still count on clients such as Levinson Industries and The Swire Foundation, both of which had deep pockets and appreciated the conservative counsel. The nature of their litigation and regulatory matters rarely involved large volumes of documents and they happily paid the disbursements for the photocopying. Grantham, Carson and Jarvis firmly believed that counsel had to read every document to determine its relevance and privilege and that there was nothing to touch the accuracy of manual review.
Matthew Crawley was a newly minted partner with an MBA and a J.D. from one of the finest schools in the country. He took a keen interest in the business side of the firm and studied each of the practice areas profit/loss figures. The advisory practices were healthy, especially securities and transactional, but it was clear to see the falling revenue from the litigation/controversy practice. He concluded from his investigation and analysis that the firm needed a new business model for the discovery phase of litigation, one that involved greater reliance on new practices and technologies to better manage the cost to the client.
He took his concerns to a private meeting with his mentor, the senior partner from the Grantham family, who reluctantly agreed to meet with him and Mr. Jarvis, the partner with responsibility for the litigation/controversy practice. Mr. Jarvis reacted with ruffled feathers to the statement that the practice had been mismanaged and was wasting client money. Mr. Grantham was torn between his admiration for his young protégé and his fondness for the firm’s founding partner.
Matthew was sure he could improve litigation practice, but he needed a way to show the senior partners that it would be good for the clients and good for the firm. His friend Tom Branson, who worked for a technology firm that had developed one of the several leading products in the technology-assisted review market, suggested a small pilot comparing the manual and automated review processes of two very similar cases – one team would do the manual review of the first case, and the other team would use an automated process for the second. They would then switch cases and do validation checks against the other team’s case, drawing samples of a statistically appropriate size. The chips would fall where they may.
Mr. Grantham reacted with irritation when he found that Matthew had proceeded with the pilot and had arranged a meeting to discuss the results with the auditor, Mr. Murray, without his leave. The meeting didn’t start well. If Mr. Grantham had hoped that Mr. Murray would side with the senior partners, he was mistaken – Mr. Murray pointed out that the litigation/controversy practice had been losing clients and money for years. Mr. Jarvis turned to Matthew and said, “I’m the old broom – you’re the new broom. Good luck with your sweeping.” And with that he swept out.
Fortunately for Matthew, Mr. Grantham did appreciate the value of his innovation and agreed to a cautious adoption, but we won’t know the outcome until the next episode.