Second requests…mountains of overwhelming data that must be collected, processed, and produced into a relevant and responsive set of information in a restricted time frame determined by statutory guidelines and the antitrust agencies. Have I said enough to induce alarm and/or panic?
In the first part of my three-part series, I gave an overview of Lighthouse’s recent Antitrust Leadership Panel and the discussion around the role of technology in government reviews of corporate mergers, aka second requests or HSRs. The panel, consisting of antitrust experts Christian Mahoney, Kenneth Reinker, and Larry Malm from Cleary Gottlieb, and Corey Roush, Gorav Jindal, and Haidee Schwartz from Akin Gump, along with Lighthouse moderator and VP Bill Mariano, shared insights from their experience and issues they’ve encountered when tackling HSRs.
In this second part of the series, I will highlight the primary points from our panel discussion on the issues and strategies involved in reducing time and cost when responding to second requests, a big challenge when the parties involved are bound by statutory guidelines and agency deadlines to deliver productions in a tight time frame.
Growth of Data Has Led to Longer Completion Time.
Now that we have advanced technology to help us quickly reduce data sets, shouldn’t we be seeing a reduction in time for the completion of a second request? This is a two-fold conundrum as, although the variety of technology to efficiently cull down data has grown, the sheer volume and types of data have also substantially grown. According to Jindal, the timeframe for completion of reviews has actually increased over the last five years. Jindal noted this is due to both an increase in “the size of the mountain or the haystacks” of data balanced with “offsetting efficiency benefits from technology.”
“People at all levels need to be taking it upon themselves to learn the technology so that negations are based on what the technology can do.”
- Larry Malm, Cleary Gottlieb, 2019 Antritrust Leadership Panel
Agency Rules to Reduce Time Haven’t Worked.
Despite agency attempts to place limits around number of custodians to be collected and time frames to collect from, Roush noted there is a lack of consistency at the DOJ and the FTC and every second request ends up being “a negotiation and it depends on which merger shop you're talking to and the specific staff people you're talking to.” And even as technology has been more commonly adopted, we’re now seeing more documents and longer completion times. One rule that has made a positive difference, according to Schwartz, is the FTC’s change to allow a partial privilege log which has measurably lessened the burden on clients in terms of both time and cost.
Statutory Guidelines Complicate Time Frames.
Although the panelists generally agreed they believe both sides would like to find a way to create a uniformly shorter time frame, the statutory rules mandating 30 days from HSR filing to second request and 30 days after you comply with the second request until the agency makes a decision complicate matters. According to Reinker, the statutory rules force the agencies “to try to get more time and to try to extend the review period” and consequently issue a “very broad second request” covering an unmanageable amount of documents and custodians in order to do so.
With ever-growing volumes of data creating longer timelines and increasing costs, what is the proposed solution? Watch for my third and final installment of this blog series for a discussion of evolving for the future when technology alone isn’t the answer. In the meantime, get the full insider scoop on second requests by watching the video of the panel’s discussion in its entirety.