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Discovering e-discovery Changes to legal procedures offer insight into agency needs for e-discovery preparedness By John Chivvis In April 2006, the U.S. Supreme Court approved a number of amendments to the Federal Rules of Civil Procedure, which govern how civil actions and suits are conducted in federal courts. The changes go into effect in December 2006. While this may seem fairly innocuous, it requires all organizations to reassess how they access, organize, and archive their “electronically stored information.” According to global IT consulting and research company Gartner, Inc., most businesses don’t think about lawsuits or the need to be proactive when dealing with e-discovery issues. In a December 2005 report on the costs of e-discovery risks, Gartner reported that companies that haven’t “adopted formal e-discovery processes will spend nearly twice as much on gathering and producing documents as they will on legal services” through the year 2010. Gartner also forecast that in 2006 alone, 75% of all companies would be involved in some kind of legal or regulatory action requiring “a systematic approach to legal discovery.” Rule 26(f) “Most of the changes to the [federal] rules aren’t that new; many have been around as best practices,” explains Jon Neiditz, attorney and risk management expert for the Chicago-based law firm of Lord, Bissell & Brook. “However, the change to Rule 26(f) is revolutionary.” Rule 26(f) states that the legal teams for both sides must meet at the beginning of the dispute to decide what electronic information is and is not accessible and how the accessible information will be produced. “What is extraordinary,” says Neiditz, “is that since the great majority of suits are settled before the parties have to reach agreement about production, disputes in this area arise very infrequently. The drafters of the rule changes chose to require the up-front discussion of electronic records to avoid the disputes and sanctions based on destruction of relevant electronic documents that have occurred in a number of high-profile cases. As a result, however, electronic records must be discussed in every federal civil case.” As part of Rules 26(b) and 26(c), a business called to produce electronically stored information must identify the sources of information that it plans to make available for discovery. However, some information may be exempt (such as backup tapes or obsolete legacy system data) due to the undue burden or cost it would incur. And therein lies the problem. Gartner says that the high costs related to e-discovery can be used as an offensive tactic by opposing counsel as a means to settle. Neiditz agrees, saying, “The obvious danger is that the 26(f) meeting could be used as an opportunity to raise the bar for a settlement.” It can become expensive if both sides are not able to agree on what must be produced. Gartner reports that through 2007, more than half of all organizations “will have inadequate e-mail and records retention policies, which will complicate electronic discovery processes and drive up costs, or put the outcome of litigation in jeopardy.” The problem is that most businesses still operate from a paper-based, records management mentality. Electronic documents can now include everything from e-mail and voice mail to internal documents and instant message logs. According to a 2003 survey by Cohasset Associates, 47% of companies with a formal records management program did not have retention schedules that included electronic records. Fifty-nine percent did not subject e-mail to any kind of retention, and 65% did not include electronic records in their responses to litigation holds. External e-discovery vendors typically conduct this request by sifting, sorting, and sampling files, data, and information usually at a hefty price. In many cases, data has to be restored from backup tapes, file servers or other “digital landfills” as Neiditz refers to them. Getting ready for e-discovery Since 26(f) meetings call for information and access to be discussed and decided on early in the process, organizations need to look at developing and implementing their own procedures for records management and retention. “From a practical standpoint,” says Neiditz, “you have to control the information of your business.” Both Gartner and Neiditz say that the first step is to create a team that includes IT and legal staff. IT needs to be able to explain to legal the company’s information and system architecture, external data sources and even the accessibility of “legacy, archive, or nonstandard data and systems.” “Lawyers need to be able to go into these 26(f) sessions with the knowledge of what relevant information is accessible and where it is, because these meetings are fundamentally about where the information is stored and how to access it,” explains Neiditz. Besides the creation of a working group or team to prepare for e-discovery requests, agencies need to make sure they have the necessary processes and/or technology in place to make it easier to implement and enforce an electronic retention policy. For agencies that operate in a paperless environment, the agency management system provides the ability to attach electronic communication—e-mails, imaged documents, faxes and more—to individual customer files. This makes it easy to archive, search, and produce information if the agency faces an e-discovery request. Neiditz points out that among the most important issues to consider in assessing paperless technology options are the quality of document repositories and how easily they can be searched; whether documents can be properly authenticated by the system; and whether you can implement document destruction holds confidently if you are faced with litigation or investigations. As agencies also typically run an e-mail server where archiving workflows can be easily put into place, e-mail archiving is sometimes implemented to reduce the legal and IT headaches that come from employees maintaining the same information in multiple locations—some not as secure as they should be. “It’s a trade-off for employees,” explains Neiditz. “By managing these documents in a central location, you hope to discourage employees from trying to keep their own personal archive of documents and e-mails on their own desktop or worse yet, something like a thumb [USB] drive.” The ability to search and produce information is what is needed to be ready for meetings under Rule 26(f). By maintaining accessible and archived records, documents, and e-mails on respective agency servers, agency owners help reduce the likelihood of resorting to typically inaccessible backup tapes or individual workstations. “It is important to know what you will say is accessible,” Neiditz continues. “You must be able to draw a clear line as to what you include and exclude.” Still, to avoid these systems and servers becoming “digital landfills” where employees just dump their files and information, manual workflows or automatic archiving processes should be implemented. Employee training should cover how the systems are organized and structured so that employees are empowered to classify their own data/documents/information as soon as it is received. Stand and deliver Knowledge truly is power. However, knowledge when it comes to e-discovery means knowing where the information is. “When you get sued, you have two choices,” says Neiditz. “An e-discovery vendor can come in and take all of your files and find the information for you, but it is expensive. Or you know where it is—because you’ve gotten organized.” As December approaches and the federal rules go into effect, Neiditz predicts they will eventually trickle down to the state level as either rules or best practices that judges will enforce. New rules like Rule 26(f) will push how electronic information is stored and managed to the literal forefront of the process. “The hope becomes, especially in 26(f) meetings,” says Neiditz, “that if you have a good system in place for e-mails and documents, you can say to the opposing counsel, ‘This is what we have to offer you and this is good enough.’” * The author |
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