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Third-Party Subpoena Response: How GCs (and Their Teams) Can Respond More Cost Effectively

What in-house legal leaders need to know for a fast, on-budget response

by Petra Pasternak

A third-party subpoena request can be a wild card for an in-house legal team. Typically, this type of court order arrives unexpectedly, impacting priorities and disrupting daily operations. The immediate goal is to navigate the legal obligations and potential risks associated with responding.

To that end, in-house lawyers need to quickly understand what records or information are being sought, whether the team has access to those documents, and to consider the burden and cost of producing them. It’s also important to make sure to understand the risk of accidentally producing privileged or confidential information. 

Turnaround times are often fast and the volume and variety of data can vary.

Many view responding to subpoenas as another cost of doing business. But with the right processes and tools in place, legal teams can meet their legal duty while responding quickly and efficiently – and at lower cost.

Understanding the Common Types of Subpoenas

A third-party subpoena is a court order calling for the production of documents as evidence as part of a lawsuit in which one is not themselves a party. Not being involved in the lawsuit (as a non-party) makes it hard to predict and prepare for a subpoena. 

Organizations need to be ready to respond fully – even if they object to the subpoena down the line.

Some of the most common types of subpoenas are:

  • A document subpoena (subpoena duces tecum) requires the recipient to produce documents, records, or other physical evidence related to the case, without needing to provide testimony.

  • A witness subpoena (subpoena ad testificandum) compels a witness to appear in court or at a deposition to provide testimony.

  • A deposition subpoena calls for a witness to appear at a deposition to provide testimony and potentially produce documents.

Companies often receive subpoenas from other parties that are involved in litigation which they’re not party to. The disputes can be civil or criminal in nature. 

Subpoena requests can also come from regulatory organizations, such as the U.S. Securities and Exchange Commission, or government agencies and grand juries. 

The information being sought may contain items that are confidential, privileged, or sensitive in some way.

The reasons corporations may receive a subpoena request reflect the complexity of modern business operations and legal and regulatory challenges.

Typical scenarios might include subpoena requests related to:

  • Regulatory investigations by the SEC, the Department of Justice, and industry-specific regulatory bodies

  • Third-party litigation that seek information the organization may have such as customer records, contracts, or communications

  • Employees who are involved in a divorce, debt, or another lawsuit

  • Intellectual property disputes over patents, trademarks, and copyrights

  • Mergers and acquisitions seeking information about past transactions, such as due diligence materials or financial records

Like Litigation, a Subpoena Response Requires Modern Discovery Methods

A subpoena request should never be ignored. Noncompliance carries significant risk, including contempt of court charges, fines, and even imprisonment. 

To respond fully, the in-house legal team needs to move quickly to preserve potentially relevant data just as it would during other situations when electronically stored information, or ESI, needs to be identified, collected, analyzed, and produced – such as during a lawsuit or investigation involving the organization. 

The in-house legal team will want to notify key employees or executives, issue a legal hold (also known as a litigation hold), collect and review the data, and produce it as part of the response.

Locking down potentially responsive documents should be prioritized – even if the company intends to challenge the subpoena. In some cases, the legal team may determine that it makes sense to object. Under certain circumstances, it may be possible to move to quash the subpoena, limit its scope, or recover the costs of responding. (The framework for responding to third-party subpoenas in federal matters is provided by Rule 45 of the Federal Rules of Civil Procedure.)

Benefits of Handling Subpoena Response Internally 

Some organizations send even routine subpoenas to outside counsel. While outside counsel are invaluable for their specialized expertise and additional manpower, the risks of over-reliance on external partners – such as delays and cost overruns – can outweigh the benefits.

GC’s must manage budget constraints when outsourcing ESI collection and review. Depending on the volume and complexity of the data involved, discovery expenses can quickly balloon.

Third-party subpoena response is often an easy entry point for in-house teams who are looking to bring more of their discovery process in-house and under their control. Organizations that own modern ediscovery software in-house are better positioned to handle a subpoena response more cost effectively and without compromising quality or compliance standards.

The right tools enable legal teams to quickly and efficiently process, review, and produce documents. This is true whether the company fields an occasional subpoena or a high volume of requests.

Consider this fairly common scenario. The legal department at a large corporation receives a subpoena from the attorney representing the soon-to-be ex-spouse of a company employee. 

The spouse might be seeking a range of documents related to the worker’s employment, depending on what's at stake in the divorce proceedings. This might include employment details like salary information, stock options, bonuses, and benefits. 

The company's legal and HR teams have to balance complying with the subpoena while also respecting the employee's privacy. 

With the right ediscovery tool, the process of locating, assessing, and producing all that information is streamlined and straightforward. 

Working within a single platform, teams can quickly and easily move through the response process, with modern ediscovery tools providing a host of benefits that allow teams to move quickly and much more cost-effectively than in the past. For example:

Automated data collection. Modern cloud connector technology makes collecting electronic data from various sources – such as Microsoft 365, Zoom, and Slack – a matter of a few clicks. 

Machine Learning and AI. Modern algorithms can be trained to recognize patterns associated with privileged or confidential information, making the identification process more accurate and efficient over time.

Automated PII redaction. Once privileged or confidential documents have been identified, an automated PII redaction helps redact sensitive information to ensure it remains protected during the review and production process.

Early case assessment. Instead of passing along oversize troves of unrelated documents, early case assessment tools vastly reduce document sets to just the most relevant – saving all sides time and money. Indeed, in Everlaw, ECA users reduce the number of documents requiring active review by 75% on average.

Data and process control. Outside partners can be invited into the platform on an as-needed basis while company data stays safe within the confines of the organization.

Modernizing Your Approach to Subpoena Requests

Handling third-party subpoena response internally empowers legal teams to:

  • Dodge cost overruns that often come up when engaging outside counsel

  • Speed up response times through automation and advanced analytics and AI features available in today’s discovery tools

  • Better protect confidential or sensitive information through greater control of the process than when relying exclusively on outside partners

  • Support in-house talent through powerful yet user-friendly solutions that lift the burden of tedious tasks

An advanced ediscovery platform allows for real-time collaboration, letting various internal and external teams work together quickly and smoothly to review and produce documents from within a central, secure environment.

With the right tools, the next subpoena request does not need to be a fire drill.  

Learn how modern ediscovery solutions will transform your approach in litigation, cyber breaches, whistleblower actions, subpoenas, audits, and other data-intensive workstreams.