An effective e-discovery policy is no longer just a nice-to-have. New FRCP rules mean that companies now need to know more about the information contained within their electronic documents than ever – or face the consequences.
Business Management speaks to four leading e-discovery experts – Xerox’s Craig Freeman, RenewData’s Ellery Buchanan, Plasmon’s Mike Koclanes and CA’s Galina Datskovsky – to get their opinions.
95 percent of all business communications now are created and stored electronically. Most major corporations today hold more than 3TBs of user data and messages. Trends also indicate this mass of data will grow by double digits year upon year. In terms of e-discovery, what challenges does this data explosion present?
CF. As volumes of corporate data continue to explode, the challenges of managing and processing that data continue to grow as well. First, you cannot overwhelm your review team with mountains of documents collected during discovery. Pinpointing relevant data and culling out extraneous documents during the pre-processing step is key. Then there is the ever-growing variety of file types involved in daily business activities. Processing this information accurately and completely is a firm requirement in the defensibility of the steps you take to defend your case. You will need systems and services that are capable of handling these large volumes and process them at a speed that can meet the court deadlines that are imposed.
GD. It presents several challenges. First, looking for specific, relevant data in a vast collection of this size can be like searching for a needle in a haystack. It can take a long time, involve many resources, and it is difficult to guarantee that all relevant information has indeed been produced. Size of collection is only the beginning. It is also difficult to guarantee chain of custody as well as preservation. Controlling the vast array of information by applying the necessary controls is a daunting task. For most organizations, the biggest challenge is how to gain mastery of the multitude of data sources that they invariably have.
EB. The e-discovery process has both technical and human elements. While it is possible to increase the scalability of software and hardware (as evidenced by the fact that RenewData processed over 18 petabytes of data in 2006), the human element is not as easily scalable. Enter technology. There are methods of reducing the volume of data before any human review takes place. RenewData’s ActiveVault Evidence Management Platform extracts and dynamically de-duplicates data – reducing the amount of data that will be ingested into a review tool, and ensuring reviewers will not waste time reviewing 20 copies of the same e-mail or document. Today’s technology allows reviewers to review data that has been run through semantic analysis and grouped in physical clusters, enabling them to review thousands of documents per day.
MK. An archive strategy to effectively store large volumes of electronic data and enable e-discovery is becoming a business imperative. Requirements for e-discovery have been driven by litigation, industry regulation, and corporate governance and necessitate that archived content is searchable, accessible, and authentic. ESG estimates that 80 percent of information being archived today is unstructured and semi-structured data. Using tape backups as the primary archive is no longer a viable strategy as tapes are not manageable for e-discovery. Maintaining unchanged files, e-mails and documents on high availability disk is costly and still requires backups as all disk arrays have high potential for failure and lack data permanence. E-discovery requires an archive-specific platform that has the access and search capability of disk, the low cost and power requirements of tape, as well as long term permanence and immutability.
It’s been over six months since new federal e-discovery rules took effect in the US, yet some businesses are still unclear on what they have to do to comply. How big a problem is this, and what steps should companies take to ensure they are compliant?
GD. Unfortunately, there is no technological silver bullet that can resolve all the issues. In fact, a solution involves both human and technological investment. It is imperative to form a task force with representatives from IT, legal, records management and compliance. It is also critical to have support from the executive management. The task force will help drive technology decisions, such as records management, e-mail archiving and e-discovery, but most importantly, the task force will create best practices, policies and procedures to be followed by all employees, including training programs for the staff and organizational awareness plans that together will promote proactive and consistent management of information assets. The consistent management, retention and disposition of information assets, as legally appropriate, prior to a litigation event will make discovery that much simpler and less costly.
MK. Any business that can be impacted by a civil lawsuit must now develop and document corporate processes for electronic record discovery and legal hold management. In the past, companies assumed if they were not held to regulations such as SEC 17-a or HIPPA, they did not have an e-discovery or compliance problem. This is clearly no longer the case. You should first consult with your legal advisor, compliance officer and your IT organization to understand your exposure and assess your archive strategy and your current practices and policies for e-discovery, data classification, legal hold, and retention processing of critical files and messages.
CF. Weeding through the new compliance rules and federal rules of civil procedure is a major challenge for corporations. It starts with records management within the company and with a data retention policy that must be in place prior to litigation. But once discovery starts, then the steps to collect and process the data must be bullet proof. Companies must be able to provide an audit trail of what documents were involved in discovery, how those documents were handled – processed and reviewed – and to be able to prove the documents were unaltered during this time. The solutions you use to complete each of the electronic document processing, document review, and production steps must be able to provide the audit trails you need to defend your actions.
EB. The first thing a corporation must do is to evaluate its current document retention policy for accuracy and adherence. Overly complex or rigid plans can give opposing parties the opportunity to show that the plan is not being followed. If there is no document retention plan in place, one must be created immediately, with periodic training of employees on the retention policies to ensure compliance. Next, a corporation should assess and map its IT infrastructure and capabilities by interviewing those in the general counsel’s office and outside counsel to determine what information they will need. Third, assemble a records management response team that will be responsible for responding to any emergency or litigation with respect to the corporation’s records. Finally, develop a protocol for storing and reusing discovery data from prior cases. This can be especially helpful if the corporation faces repetitive lawsuits.
With conflicting regulations telling companies to destroy some documents while preserving others, confusion reigns. How important is it for firms to have a coherent policy regarding electronically stored information? What should this involve?
MK. The systems and procedures implemented must recognize that retention periods are different for different organizations in the business. Furthermore, merely classifying data and assigning a retention period is only a small part of the process. It should be placed in an archive-specific platform that retains the information for years or even decades. Magnetic disk and tape must be re-verified and migrated every 3-5 years over the life of the archive. Retention rules must be enforced by disposal of appropriate records at the end of the retention period. Finally, if records are on legal hold they must not be disposed of even if the retention period has expired. Software and hardware solutions such as the Plasmon Enterprise Active Archive solution enable these processes and policies to be implemented today.
EB. The human tendency being to hoard documents, corporations are keeping a much higher percentage of data than is actually required by their business needs or regulatory requirements. Once any business and regulatory timeline for saving documents has passed, corporations should not delay in destroying documents. Should a corporation be multinational, the laws of any country they operate within must also be incorporated into its document retention policy. For example, some European privacy laws dictate the destruction of personal and sensitive data within strict timeframes. European employees of a US corporation who do not abide by the European law, but rather follow the more expansive guidelines set out by the corporation’s document retention policy, can subject the corporation to liability.
GD. You must now know more about your information than ever before. Creating a consistent retention policy for all information, regardless of format, is critical. Implementing such a policy will help cut down on information to search in the future, as well as help to better categorize it for searching purposes. Too much information can make it difficult to find what is truly needed. That reduction in clutter grants another benefit as well. Most of the cost associated with discovery is during review – minimize this review process and save money. It’s that simple. A solid retention policy that helps you proactively manage your information certainly helps to facilitate this. The best-case scenario involves working closely with your RIM department and deploying a state-of-the-art federated records management application.
CF. A good records management program and retention policy is the first step in controlling data that could be involved in litigation. Without this first step, a company becomes vulnerable to spoilage of relevant data to a case. But that’s not all: a chain of custody for documents must be created from inception on up to discovery production to build a defensible process in the handling of documents involved in litigation.
Increasingly, e-discovery customers are not just law firms enmeshed in big corporate cases. Many companies are now working proactively with e-discovery vendors, getting a handle on their data troves so they can meet regulatory requirements. What additional business benefits can be gained from such an approach?
CF. Some of the biggest benefits are cost controls and reduction, expedited timelines for processing, and improved efficiencies in document review. By understanding the e-discovery process and enlisting the expertise of e-discovery solution providers, companies can implement the steps that drive data management improvements and allow a standardized workflow to be designed and in place before a litigation matter is started. Understanding a company’s data population, the types of files and the metadata within, and how those files should be processed for review can be a lengthy and involved procedure. Several iterations may take place before the final processing steps are decided upon. Since court-mandated discovery orders and impending production deadlines closely follow each other, precious time and money can be saved by having the e-discovery and discovery management workflow ironed out ahead of time.
GD. This is like buying an insurance policy: if you are prepared, answering a request is certainly easier. With this type of an approach, an organization’s legal department develops key skills in the e-discovery arena that typically were only available from a law firm. Resources can be used more effectively, including those in IT, and processes become repeatable. In the past, organizations have been responding to e-discovery with heavy IT involvement, as well as paying law firms to acquire the skill sets necessary to process collections for production. Unfortunately, the only repeatable process in many cases has been the act of signing the check for legal services rendered. By taking control of the process, organizations also become more aware of their information landscape, processes that can be streamlined through technology, and what can be preserved and repeated from one discovery to the next.
EB. Review constitutes the majority of the cost associated with litigation. By working with a preferred vendor, corporations can save millions of dollars by controlling how their documents are reviewed by outside counsel. Some firms utilize cutting-edge technology in reducing review times and saving their corporate clients money. At the other end of the spectrum there are law firms who still TIFF or PDF everything, unnecessarily increasing the overall cost of litigation. Corporations should create protocols or best practice guidelines for review associated with any litigation. Furthermore, corporations can leverage already processed data for use in other matters. Once data has been located, collected and de-duplicated, it can be produced in other matters related to the original or those that are completely new.
MK. Fixed content data often contains strategic value for the company. This information can be customer data, design files, patient records or digital assets that can be reused or repurposed to create future value. Having these assets safely archived, searchable and randomly accessible provides strategic value as well as mitigates risk. The amount of data to be archived will continue to grow, so finding a solution that meets your strategic and governance requirements will become an imperative. An effective archive strategy using archive-specific technology will also reduce IT costs. Implementing a tiered storage strategy to move data off high-performance, high-cost disk arrays to lower cost, archive storage platforms reduces the total cost of ownership.
Technology to the rescue?
IT will be a critical component in enabling companies to meet future e-discovery challenges. But what technologies are emerging to help CIOs streamline, store and recover their data effectively?
“Corporations and their CIOs will be looking to advanced searching technologies to assist them in future e-discovery projects,” says Xerox’s Craig Freeman. “With the volume of data that is being created electronically, the major challenge will be to accurately cull this information down for review and production. New advances in search technology will be one area to watch. Technologies that can group, catalogue and provide contextual information inside document text will be a big help in the challenge to manage the amount of data entering discovery review.”
CA’s Galina Datskovsky agrees. “The key tools are those that enable CIOs and General Counsel to both manage information assets proactively and then discover information from disparate content silos found across the organization,” he says. “Many companies today find that they have information residing in lots of different data sources resulting from mergers, acquisitions and departmental deployments; the challenge is to offer a unified management view into that information while respecting the repository choices previously made by functional areas. Using a combination of these tools ensures that you are managing the correct information, that it is managed in a consistent manner against corporate retention policies, that you are removing content that is not needed as soon as it is legally appropriate to do so, and that you are meeting legal and regulatory obligations without adding undue storage burdens.”
So what technologies are currently on the market to help companies address some of these issues? “UDO is the first storage technology specifically designed for long-term professional data archive requirements,” says Plasmon’s Mike Koclanes. “It provides data authenticity when archived data must remain unchanged for long periods of time. Permanent UDO media eliminates the need to do backups, enabling a low-cost solution that expends fewer management resources. Low power and cooling costs are roughly one-tenth those of spinning disk solutions, so this archive platform provides both a financially and environmentally responsible solution to long-term data archive.”
RenewData is another firm stepping up to the plate. “We can assist clients through our suite of e-discovery services for preservation, collection, processing, analysis, review and production of documents,” says Ellery Bucahanan. “Often, the data used in one matter is also subject to other litigation; RenewData offers clients a service to store their data in a cost-effective and legally defensible manner and in a state where it can be easily processed for review. The e-discovery solution enables corporations to store their data with a leader in the e-discovery field who utilizes a state-of-the-art secure facility staffed with e-discovery professionals so that they can cost effectively and reliably address their e-discovery requirements.”
Discovering e-discovery
Steps businesses should take to prepare for litigation include:
- Formalize document preservation and retention policies and procedures in a consistent, compliant, ‘good faith’ records management program
- Establish a litigation readiness team of legal, IT and records management that will establish the e-discovery process and deal with e-discovery issues
- Inventory systems and sources of data, and identify their content, location and preferred form of production
- For key systems, perform an initial assessment of the cost and methods of production to identify ‘not reasonably accessible’ systems
- Identify system custodians (administrators) and make sure they understand their roles
- Apply retention policies to the systems and data sources
- Develop, document, institute and verifiably enforce formal litigation hold and data preservation procedures
