The eDiscovery Paradigm Shift: 6/13/10

Wednesday, June 16, 2010

Cooperation Between Legal and IT Deteriorating

Just when we all thought that communications and cooperation between the legal departments and the Information Technology departments of the Global 2000 was starting to improve, Recommind has released the results of a survey that indicates that collaboration and cooperation is actually deteriorating. The survey of senior IT managers at enterprises averaging 13,000 employees reveals that IT and legal teams aren't collaborating on buying decisions and question each other's commitment to and understanding of eDiscovery and regulatory compliance.

As the amount of Electronically Stored Information (ESI) continues to increase and the subsequent cost of eDiscovery and Governance, Risk and Compliance (GRC) continues to increase, it is almost beyond belief that the General Counsel (GC) and the Chief Information Officer (CIO) can’t meet over a cup of coffee and agree to play nicely. Its actually a fairly simple task for these two organizations to work together from a technology standpoint. However, politically, it may be a different story. Worst case, you would think that, given the financial impact associated with the lack of communications and collaboration between IT and the Legal, the Chairman of the Board or the Chief Executive Officer (CEO) would demand cooperation or find a GC and a CIO that could cooperate?

The full text of the press release from Recommind is as follows:

SAN FRANCISCO, CA--(Marketwire - June 16, 2010) - Recommind, the leader in search-powered information risk management (IRM) software, today released results from its second annual survey that examines the working relationship between corporate IT and legal departments. While the inaugural survey revealed that a lack of collaboration between both teams was greatly hindering eDiscovery efforts, the 2010 installation demonstrates that this disconnect has dramatically worsened. The survey of senior IT managers at enterprises averaging 13,000 employees reveals that IT and legal teams aren't collaborating on buying decisions and question each other's commitment to and understanding of eDiscovery and regulatory compliance. This further endangers effective eDiscovery and regulatory responses at the exact time such activities are skyrocketing.

While legal and IT have been historically disparate, the exponential increase in content creation and the rising complexities and risks of eDiscovery and regulatory scrutiny have inexorably linked the needs and responsibilities of each department. With the average U.S. company facing 305 lawsuits at any given time -- a number that jumps to 556 for companies with more than $1 billion in revenue -- enterprises urgently need to ensure close collaboration between these critical departments or face massive financial, competitive and reputational risks as result. Recommind's survey reveals that communication between legal and IT has become decidedly worse in 2010. For example:

In 2009, 67% of respondents described the relationship between the two departments as "good" or "very good"; in 2010, that number has dropped to 54%
In 2009, 37% of respondents reported that IT and legal were working more closely together than the year before; that number has dropped to 27% in 2010
In 2009, 40% of respondents stated that their IT department considered eDiscovery to be a high to very high priority; in 2010, that number has dropped to 26%
In 2009, 82% of respondents said that IT was "very involved" in eDiscovery technology purchasing decisions, with legal being "very involved" 48% of the time.
In 2010, IT's involvement has remained largely the same, dropping from 82% to 78%. The involvement of the legal department, however, has dropped dramatically, decreasing from 48% to 33%

In addition to measuring collaboration, the survey also examined the formalized processes between IT and legal and inter-departmental perceptions, focusing specifically on how the teams communicate with and evaluate each other. For example:

72% of respondents report that their IT and legal teams meet once a quarter or less; 52% meet once a year or less and 23% never meet at all
When it comes to actually implementing eDiscovery processes, the focus of each department is also quite different: the primary goal of the IT department is "executing as quickly as possible" (35%), while the primary goal of the legal department is "complying with federal regulations and court orders" (61%)

Finally, earlier this year, Gartner Group recommended that global organizations start adding legal support managers -- a hybrid position that helps mediate between IT and legal -- to create policies and schedule and execute eDiscovery processes. It would appear that Gartner's advice is not yet being heeded; nearly 75% of the enterprises surveyed do not currently have this position filled.

"How can enterprises expect to avoid trouble in this hyper-regulatory and increasingly litigious environment when their legal and IT teams hardly talk? Effective responses to regulatory scrutiny and eDiscovery events are too complex, expensive and dangerous to have this level of miscommunication and mistrust between key departments," said Craig Carpenter, vice president of marketing, Recommind. "Having the right technology and processes in place are crucial, but everything starts with communication. Hopefully the fact that these problems are being exposed will serve as a clarion call for enterprises and the industry in general, because enterprises need a real sense of urgency if they want to avoid becoming front-page news for all the wrong reasons."

About Recommind Inc. Recommind's search-powered Information Risk Management (IRM) platform automatically accesses, organizes, collects and analyzes large volumes of information from myriad sources to address an enterprise's critical eDiscovery, compliance, email categorization and knowledge management needs. With faster, more accurate access to and greater control over information, organizations can lower risk, improve productivity, increase the value of information assets, and improve competitiveness and profits. Recommind customers include Bertelsmann, BMW, DLA Piper, Eversheds, Novartis, Shearman & Sterling, and Verizon. Recommind is headquartered in San Francisco and has offices in New York, Atlanta, Boston, Chicago, Houston, Washington DC, London, and Bonn, Germany. For more information, email info@recommind.com, or go to http://www.recommind.com/.