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The eDiscovery Paradigm Shift

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Monday, April 20, 2009

Doesn't Everyone Already Know About eDiscovery?

It's been over 2 years since the changes to the Federal Rules of Civil Procedure (FRCP) took effect, spawned a whole new industry called ediscovery and changed the face of litigation forever. So, since I have been living and breathing eDiscovery and watching this "eDiscovery Paradigm Shift" from ground zero and helping the "early adapters" wade their way through the morass of issues and technology, it appears that I may have lost some perspective in regards to the fact that no everyone in the legal market or in enterprises across the globe are worrying about eDiscovery compliance. How could that possible be?

Well, whether intended or not, that point was made clear to me by Rick Dales, Vice President of Product Management at Proofpoint, through an article that he had published on the Computer Technology Review site titled, "Is Your Company Ready for e-Discovery?: What FRCP Can Mean for Your Business and How to Prepare."

This article is well written, very informative and would be a great resource for the novice, uninformed IT director as an introduction to the requirements for managing Electronically Stored Information (ESI) in 2009. It may also qualify as required reading for any litigators or anyone associated with enterprise information management that been in a coma for the last 36 months.

In all seriousness, it is really easy for those of use who spend most of our waking hours working within the eDiscovery market to forget that eDiscovery is a fairly new discipline and that there are more professionals that don't know about it or haven't thought too extensively about how it will effect their operations and business than have.

So, maybe I am the one that has been living under the eDiscovery rock and maybe its time for me to realize that the rest of the world has not yet had the pleasure of experiencing the thrill and excitement of eDiscovery.

The full text of the article is as follows:

Electronic Discovery (or e-Discovery) refers to the producing, obtaining and reviewing of digitally stored electronic evidence in response to civil litigation. With the passing of the Federal Rules of Civil Procedure (FRCP), it’s a new era in which organizations are challenged with how to face the increasing pressure to proactively manage the retention and handling of various forms of corporate records and data for compliance and legal discovery purposes.

The first step to addressing this challenge is for enterprises to be aware of what is required under FRCP. Next, businesses should prepare themselves for compliance by ensuring the ability to retrieve and analyze terabytes of data upon request. With new advances in technology, this crosses an increasingly expansive landscape, including: email, instant messages, handhelds, laptops, enterprise networks, databases and SMS. By proactively addressing FRCP challenges, enterprise IT staffs can ensure a seamless process should the need for legal discovery ever arise.
What Is the FRCP?
The FRCP governs the conduct of all civil actions in US Federal District courts. Although the most recent amendments to the FRCP were made over a year ago, many companies are not familiar with what is required of them by law. Enterprises should be concerned about these new amendments because, unlike most data retention requirements that are industry specific (such as the NASD and SEC rules for financial institutions and broker-dealers), the FRCP applies to organizations in all industries.

Proper data retention is no longer just a best practice – it’s a legal obligation. If electronic data is not properly managed, corporations face serious consequences that include hefty fines or imprisonment, making it particularly important for business decision-makers and IT administrators to understand the new amendments. To prepare for e-discovery, organizations must adopt a complete approach to managing all types of data so that it can be easily searched and retrieved when necessary.

The Amendments and Their Implications
Recent FRCP amendments require companies to retain all their corporate correspondence, including electronically stored information (ESI), so that it can be produced in a timely and complete manner. As such, litigation readiness has become an increasingly important IT responsibility. The following is a summary of the amendments that impact e-discovery and reinforce the need for email archiving.

Rule 16: Pretrial Meetings
Requires all parties to meet and discuss a discovery plan and evaluate the preservation and production of ESI.

Rule 26(a): Duty to Disclose
Requires parties to identify all sources of ESI that may be relevant by category and location.

Rule 26(b): Discovery Scope and Limits
Every organization has “a duty to disclose all potentially relevant sources of information” to the courts as soon as they “reasonably anticipate” litigation unless these sources are “not reasonably accessible because of undue burden or cost.”

Rule 26(f): Planning for Discovery
Requires opposing parties to meet before the trial, or at least 21 days before a scheduled conference to discuss the nature and basis of their claims in an attempt to speed the possibilities of a prompt settlement.

Rule 34(a): Producing Documents
Electronically stored data – including email – is one of the types of records which can be requested for inspection by opposing parties.

Rule 34 (b): Procedure and Form of Production
As a part of the discovery process, the responding party should provide a “proposed plan for discovery” and produce all requested information, including ESI, in a form that is “reasonably useable.”

Rule 37(f): Sanctions for Failure to Make Disclosures or to Co-operate in Discovery
This rule creates a “safe harbor” protecting a party from sanctions arising from its deliberate deletion of ESI as long as it was deleted “as a result of routine, good faith operation of an electronic information system.”

Complying with the Amendments
In an effort to be proactive, businesses should develop an organization-wide approach to understanding and organizing ESI. However, many storage managers do not have the technology in place to properly produce information such as corporate and personal email records, attached files and instant messages. According to a recent survey conducted by Osterman Research, about one third of IT managers surveyed admitted that they could not produce an email over a year old.

The research showed that only a small number of organizations have a corporate retention policy in place and one fourth of these companies deleted their emails within 90 days of being stored. The lack of policies for items such as personal emails and the inability to locate each and every place where corporate or personal email data could reside can cause serious problems for companies that need to produce all relevant information during e-discovery or regulatory audits. These findings demonstrate that over a year after the amended FRCP, most organizations are not fully prepared to comply. To meet these requirements, organizations must develop a sound email policy that can be implemented and maintained with an effective email archiving solution.

Are You Prepared?
To evaluate your organization’s litigation readiness, IT managers should ask the following:

Do you have an email retention policy?
Your records management policy must address the different types of electronic documents that may be created in a corporate environment. It is critical that email policies provide adequate instructions to employees regarding their duty to preserve email and the manner, method and location of preservation.

Are you confident that your email retention policy is being enforced?
Simply having an email retention policy is not sufficient to meet the FRCP requirements. Organizations must ensure that the policy is enforced and that all copies of email are disposed of once they have reached their retention period. Implementing an effective email archiving solution within your organization will allow you to set retention policies that are automatically enforced so that regular electronic data is not kept longer than necessary and relevant data (such as emails that have been placed on litigation hold) is preserved for a longer period of time.

Do you know where all copies of corporate email are stored? Can you easily access them?
As the FRCP amendments require full disclosure of relevant ESI and their location, organizations must clearly disclose to staff the acceptable locations for storage of business records. By specifying in the email policy that all electronic records can only be stored in the corporate email server (and the accompanying corporate email archive), businesses can dramatically simplify this process.

Can you enforce a litigation hold?
The FRCP requires businesses to place a litigation hold on any information that may be relevant to a case as soon as they “reasonably anticipate” litigation. Placing a litigation hold ensures that any existing or future electronic records related to a particular lawsuit are preserved indefinitely, even if past the stated retention period. Most companies do not have the storage resources to handle this, nor do they have the ability to put data on hold within short notice. An email archiving solution that is equipped with a litigation hold capability can address this concern by allowing organizations to automatically put relevant records on hold so that they are preserved for the duration of the litigation.

Do you have the tools to search through every email sent or received for legal discovery purposes within 30 days of an order?
Electronic messages are typically stored in many different locations. For purposes of litigation, companies must be able to quickly sort through all this email data. The simplest and most effective way of achieving this is to ensure that electronic records are stored in a searchable format in a centralized location. Most email archiving systems have an advanced search capability which allows the legal department to easily search through the full text and attachments of all email in order to quickly respond to legal discovery requests.

If you answered ‘No’ to any of the above questions you need to sit down with your IT team and legal counsel as soon as possible. In order to be in compliance, appropriate solutions need to be in place before it is too late.

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