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eDiscovery Confounds Companies and Their Lawyers

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Friday, August 8, 2008

eDiscovery Confounds Companies and Their Lawyers

As an excellent adjunct to my Blog entries over the past several weeks regarding how corporate council within the Global 5000 and their associated outside council are dealing with the eDiscovery Paradigm Shift, Neil Roiter, Senior Technology Editor at recently wrote a great aritlce titled "E-discovery still confounds companies and their lawyers".

Mr. Roiter does an excellent job of describing some of the more pressing issues facing the enterprise and their legal professional both inside and out with quotes from John Benson, an electronic discovery consultant for Kansas City law firm Stinson Morrison Hecker LLP.

I was particularly amused by a quote from John Benson where he state that "The world left the legal profession in the dust years ago," Benson told a Black Hat audience Wednesday. "Attorneys are just coming to the realization that people have computers and have important information on them. I spend a good deal of time dragging attorneys kicking and screaming into the 20th century."

I believe that this comment was definitely representative of the industry in 2006 and 2007. And, it may still be true for a certain portion of the industry that is probably going to have a hard time being successful with the eDiscovery Paradigm Shift. However, I have seen the legal profession take a much more aggressive embrace of technology over the past 18 months.

Mr. Benson also points out that the major cost of eDiscovery is with the review process and that this piece could cost upward of $1,000 per GB. Again, I believe that this was true in 2007 and and even early in 2008. However, with the mass roll out of email archiving technologies such as Kazeon, culling technology from the major EDD players, de-duping technology such as Equivio and the move to less expensive offshore review from organizations such as Integreon, the over all cost of review is beginning to fall. In addition, the legal market is becoming more aware of what eDiscovery should cost and processing best practices and as a result I am also staring to see "Quick Peek" EDD for an initial processing run on native files going for as little as $250-$300 per GB.

Benson also does an excellent job pointing out that eDiscovery security is an issue that the enterprise needs to be concerned with. Becoming known in the industry as "Chain of Custody", there are now several vendors that offer this as part of their overall offering such as "FirstLink" from Trial Solutions or as a stand-alone solution from organizations such as PSS Systems.

In summary, I think that Neil and John have pointed out some very important issues that are facing the legal community in regards to the eDiscovery Paradigm Shift. I just think that they are about 18 months behind in their view of where the industry, or at least the innovators and early adaptors actually are today.

The full article by Mr. Roiter is as follows:

E-discovery is incredibly expensive, time-consuming and fraught with error. If you botch it, your company may lose its case in court and be sanctioned with heavy fines for failing to produce all the required information. And your lawyers can get hauled before the bar association for ethical breaches if their client (that's you) fails to meet its legal obligations.

Federal Rules of Civil Procedure (FRCP) were amended in 2006 to clarify the requirements for e-discovery, said John Benson, an electronic discovery consultant for Kansas City law firm Stinson Morrison Hecker LLP, but the issues around e-discovery should have been resolved a long time ago, he said.

While companies have routinely been creating, distributing, storing, duplicating and re-duplicating information electronically for years, when it comes to e-discovery, most corporations, and what's more troubling, their lawyers, still don't get it.

"The world left the legal profession in the dust years ago," Benson told a Black Hat audience Wednesday. "Attorneys are just coming to the realization that people have computers and have important information on them. I spend a good deal of time dragging attorneys kicking and screaming into the 20th century."

Legal discovery is not a cookie-cutter process. Each corporate environment and case is different. E-discovery is expensive and will likely remain expensive. What's more, the e-discovery process itself is fraught with security issues; but companies can do a lot to minimize costs, strengthen their hand in court, and avoid sanctions while securing information. IT plays a critical role.
Companies and their lawyers typically overreact, attempting to preserve everything, for example, in backup tapes. This just adds to expenses -- IT folks reuse backup tapes for a reason -- and make it harder to sift through terabytes of information.

The greatest cost comes during the review process. Even with new search technologies, information still has to be eye-balled to ensure it's what you're looking for. And there's a lot of it. Mass storage is cheap, and employees can spread information among themselves and scatter it on servers, laptops, PDAs and smartphones, removable storage devices and home computers. Restoring data from backups and imaging files, and cleaning up metadata and OCR to produce documents in their final form for lawyers is costly.

Anticipate that the e-discovery process will cost about $1,000 per gigabyte. This is a fact of life, but you can control the cost, Benson said, by taking steps to identify data, lowering the volume to make it easy to secure and review when you need it, and centralizing storage.

Benson recommends fully documented and well enforced policies and procedures for handling and backing up data. There should be an established litigation response plan, including a formal litigation response team prepared to move into action as soon as the company sniffs the possibility of litigation.

That last point is important. Sometimes a company doesn't see a suit coming until it is served. But there's often much more lead time. You can anticipate possible litigation when there's a data breach or employee termination, for example. The sooner you move the better -- you have to take steps to preserve what's likely to be applicable data immediately. Your at the point when the lawyers, IT managers and other groups who might be involved need to decide what needs to be preserved -- from backup tapes to, possibly, an image of an employee's hard drive -- to avoid tampering.

"This is the most critical time to avoid sanctions and to avoid getting in trouble down the road with counsel and courts around preservation of data," Benson said.

Anticipation is key, he said. FRCP rules require the two sides in litigation to meet and discuss issues surrounding producing electronic information within 99 days of the start of litigation. That's not much time.

Be aware of e-discovery security issues, Benson warned. You're giving your data over to third parties -- your e-discovery processing vendor, your law firm, your opponent's law firm and its processing vendor. They all may be hacker targets, and it's a good bet security's not high on their priorities. There are a lot of new e-discovery vendors out there, Benson warned, vet both them carefully and take steps to make sure your law firm has solid data security policies and practices.
There's good news ahead, though, as technology gets better, and, we hope, companies get more savvy about dealing with electronic data.

"Technology will, over time, change the way legal system works," Benson said. "But that will only happen if there is good, meaningful communication between legal and IT communities. Through that communication, we'll drive the cost of litigation down. That's not necessarily a good thing for law firms, but it's certainly a good thing for corporations."

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At August 8, 2008 at 11:30 AM , Blogger Ben Wright said...

Charles: I was interested to learn in this post about all the new technologies for speeding e-discovery. These tools are relevant for more than just lawsuits. They can help with cost and effectiveness of all manner of internal investigations. --Ben


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