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New London firm brings documents work down to scale

By Lee Howard

Publication: The Day

Published August 12. 2012 4:00AM
Dana Jensen/The Day
Matt McCormack, CEO of Quantum Discovery, in his New London office.
Quantum Discovery uses predictive coding software in legal work

New London - The thousands and even millions of pages of documents that lawyers for major multinational corporations must pore through while representing clients in important cases is money in the bank for city-based Quantum Discovery, a year-old company that just received $200,000 in funding from the state.

Quantum specializes in so-called litigation services, using licensed "predictive-coding" software to help identify the documents that most likely need to be reviewed by lawyers, who can command fees of up to $800 an hour for their specialized services. In one recent retail-store bankruptcy case, Quantum chief executive Matt McCormack figures his 11-person company saved legal fees of more than $1 million for his client.

"Unfortunately, we live in a very litigious society," McCormack, a Mystic resident, said in the upstairs conference room of the company's 6,000-square-foot office on Ocean Avenue. "It can be very expensive."

McCormack, a veteran of the data-management firm Daticon when it was located in Norwich (it has since moved to New London) who later became an equity partner in the West Coast-based Daegis litigation-support firm before selling the company two years ago, still remembers filing and scanning paper documents in the old days of data management. Now, he pays a data center in Waterbury to store electronic versions of documents that both he and his clients can access from anywhere in the world.

The company's finances and business plan impressed state Department of Economic and Community Development officials to the point that Connecticut has given Quantum a $100,000 grant, plus $100,000 in low-interest loans to help spur further growth. McCormack kicked in $100,000, and expects to hire two to three more people in coming months.

"We had our highest month in revenue in July," McCormack said. "We exceeded forecast by 20 percent.

At the company's nerve center downstairs, a 72-inch-wide, flat-screen monitor sits above two 27-inch screens that are placed side by side, allowing employees to monitor clients' activity.

Clients are charged by the gigabyte, so the more paperwork that must be stored on the database, the more fees Quantum can collect. The company also charges project-management and hosting fees.

Quantum works mostly with what McCormack calls "serial litigants" - large corporations that are regularly sued, as well as law firms that deal with multiple lawsuit. The company has clients as far away as Tokyo, yet maintains a culture in which employees can bring sick kids to work and park them in a comfy area of the office that feels like their home's living room.

Among the company's traditions is holding an outdoor barbecue every Friday during the warmer weather.

"New London has a nice feel to it," McCormack said. "We believe in New London."

He said the company's ability to play on a worldwide stage despite being what he called a "boutique shop" is testament to the decades of experience most of his employees bring with them. He estimates that his dozen or so employees can process as much data today as 200 to 300 Daticom workers could cull through a decade ago.

Increased efficiencies in litigation services can be traced largely to the explosion of predictive-coding programs that can scan through documents and quickly determine which ones are most likely to be important to a legal case. McCormack said in the discovery process of a legal proceeding, emails and files of eight to 10 key people are normally accessed by litigants to find the relatively few documents upon which a case is built.

The software Quantum uses can first identify duplicate information and then organize documents into folders that identify ones most likely to pertain to the lawsuit.

In the bankruptcy case, McCormack said Quantum started with about 2 million documents and was able to whittle the number that needed review down to 500,000, saving his client hundreds of hours of legal time.

"We built our business around customer service," McCormack said.

Judges and lawyers have been slow to accept new technology, but McCormack said predictive coding is starting to take off in the legal community because it has been shown to be accurate and cost-effective.

As business picks up, McCormack said his one concern is keeping growth to a manageable level and maintain a focus on service. "We want to be a really good boutique shop," he said.

l.howard@theday.com

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