Data Detective Helps Solve Legal Cases

ON SMALL BUSINESS NEAL ST. ANTHONY

NEAL ST ANTHONY

NEAL ST. ANTHONY • neal.st.anthony@startribune.com Christine Chalstrom, founder of Shepherd Data Services, was a disgruntled litigator who found her niche in electronic data. Her rescue dog, Sadie, 15, roams the firm's Minneapolis offices.

Shepherd Data Services

NEAL ST. ANTHONY • neal.st.anthony@startribune.com Christine Chalstrom, a self-professed "nerd," founded Shepherd Data Services, a firm that specializes in legal data technology.

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In order to gain a very favorable settlement in a 2015 gender-equity case with international players, lawyer Sheila Engelmeier had to crack a big data problem.

Engelmeier represented Ellen Ewald , a Minnesota business woman who also had lived in Norway and who was paid $30,000 less than the $100,000 salary paid to a man who had similar duties working for the Norwegian consulate in Minneapolis from 2008 to 2010.

Last year, U.S. District Judge Susan Nelson issued a striking decision and award for Ewald. It was subsequently lowered slightly through settlement, providing about $110,000 in lost wages and emotional expenses and $1.845 million to cover her legal fees and other expenses.

It also was a long, tough multiyear slog for Engelmeier's small firm against a big opponent. Early on, Ewald's legal team was lost amid 90,000 electronic pages of data provided by Norway's defense, through international data-service company Stroz Friedberg .

"We couldn't find the data we thought was there," recalled Engelmeier. "We got 90,000 pages of documents, many in Norwegian , which did not include certain characters [they dropped] in the translating material. It was garbage. The other side was playing games."

Engelmeier hired Christine Chalstrom's Shepherd Data Services of Minneapolis .

"They delivered the data in Western code, which didn't translate the umlauts and other Norwegian special characters," Chalstrom recalled. "We didn't find what we were looking for until we realized they had delivered it in the wrong format. It made it very difficult. I wrote an affidavit to the court about that. I don't know if it was intentional but it was thoughtless."

The case proved to be an expensive black eye for ostensibly progressive Norway.

"Ewald was the battle of my lifetime," said Engelmeier, a 30-year lawyer. "Suing a foreign country isn't to be taken lightly. You need somebody standing shoulder to shoulder to get to the end game in the most efficient way that doesn't cost the client hundreds of thousands of dollars. Chris is a strong entrepreneur with strong values who wants to help the Davids and Darlas, not the giants."

Chalstrom, who got no public attention for her behind-the-scenes work, took away satisfaction, a good payday and cyberlaw industry notice.

Ironically, Chalstrom got to the data-analysis business through her distaste for the law business 20 years ago.

"People hire lawyers, generally, when things are messed up," Chalstrom said. "I didn't like litigation because there is never a good solution.

"I like organizing stuff. And technology because it's like a puzzle. There is a solution. That's so satisfying. It's kind of the same running a business."

Chalstrom, 55, an Iowa native, studied theology and philosophy in college, and managed a bakery and worked as a secretary for a commercial real estate firm. She went to law school nights at now-Mitchell Hamline School of Law, and started in 1991 with a partner in a small litigation firm.

"It was tough," she said. "My friend took a job at Thomson Reuters, but I decided to stick it out. I took everything that walked in the door. Commercial litigation, business start-ups, family law. Cash flow was tough. "

Chalstrom did everything herself, and soon found she had a knack for manipulating a clunky litigation-support software called Summation.

"I realized there were no lawyer technologists," said Chalstrom, who joined a fledgling litigation-support firm before she launched Shepherd Data Services in 2002.

"I put in $10,000, on top of working without a salary for a year," she said. "I lived on peanut butter and granola. My husband had a job. He's a systems administrator with Shepherd now. We're both nerds."

Shepherd Data Services, located downtown, fluctuates between 15 and 40 employees, including lawyer contractors, depending on business assignments. Chalstrom would only say revenue is between $3 million and $5 million and rose by nearly 25 percent last year. Shepherd charges by the "gigabyte " for bulk jobs, for example indexing and preserving tens of thousands of e-mails for a client. Consulting and data analysis ranges from $75 to $350 an hour.

Shepherd did the data work for regular client Merchant & Gould, the IP-law firm, which last year secured $14.5 million in damages for Bloomington-based Rudolph Technologies. That ended a decadelong patent-infringement case.

And Shepherd also works under a multiyear contract with the 840-member League of Minnesota Cities.

"We had used national vendors, such as Kroll Ontrack. They are good but used to working with larger corporate clients," said League litigation management attorney Brian Gaviglio . "We have sophisticated clients, such as Rochester and Bloomington, with their own IT departments, to some [villages] with only one or two employees. We needed a vendor who could work with ... mainframes to laptops of council members."

Gaviglio said the League's contract with Shepherd includes discounted rates for certain services. The firm also is willing to work with its members' IT staffs.

Chalstrom said she likes running her own business because there is no "glass ceiling" and she likes working with her own hires.

It hasn't been a get-rich-quick scheme. Chalstrom said she has paid herself more than and less than $100,000 in salary, depending upon profitability. She also shares profits with employees and offers good benefits to retain good people.

Ten percent of profit goes to the Animal Humane Society, her volunteer passion. Her 15-year-old rescue dog, Sadie, roams the office.

"I put most of the profit back into the company in equipment and end-of-year bonuses," Chalstrom said. "I have a great team of people and I try to make it wonderful work. I don't live an extravagant life. I have a house in Brooklyn Park. Not Lake Minnetonka."

Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at nstanthony@startribune.com.