E-DISCOVERY: A Primer

(1)

New for 2010

E-DISCOVERY: A Primer

Electronic Discovery Principles, Best

Practices & Standards

A

MANAGEMENT

PRIM ER

Robert F. Smallwood, MBA

With

Amy Girst, J.D.

Do Not Copy

(2)

1

Who we are

IMERGE Consulting is North America's largest and most experienced team of experts in the fields of enterprise content management (ECM) and business process optimization. IMERGE is also a leading provider of education courses in records

management, electronic document capture and e-discovery. IMERGE has offices in major cities including Boston, San Francisco, Toronto, Chicago, Houston, Los Angeles,

Minneapolis, Seattle, New Orleans and Washington, DC.

What we have achieved

Our track record speaks for itself: We have completed more successful projects, published more articles and given more expert presentations than any other enterprise content

management consulting firm in the world. We are proud that our organizations include some of the world’s best and largest public and private organizations. Learn more about us at

imergeconsult.com or contact an IMERGE professional today to discuss putting our expertise to work for you.

About the Authors

Robert Smallwood, MBA, Master of Information Technology, Laureate of Information Technology is a founding Partner of IMERGE Consulting and has

been recognized as one of the industry’s “25 Most Influential People” and “Top 3 Independent Consultants” by KM World magazine. Some of his past client organizations include Bank of America, AT&T, Xerox and IBM. He has published more than 100 articles and given more than 50 conference presentations on document and content management. He specializes in email archiving, e-records and eDiscovery, and he worked in the legal vertical market for Wang Labs in the 1980s-90s. He is the author of the book, Taming the

Email Tiger and several others

Amy Girst, J.D. is an expert in eDiscovery planning and implementation. Amy has in-depth

expertise in e-discovery and is skilled in assisting management in developing their business strategies, aligning the operation with those strategies, and implementing them.

(3)

The references provided in this book should not be considered as legal advice, and is only provided as a resource and starting reference point for further foundation to your organization’s own research. All cited references should be verified and updated with your own legal counsel and findings as applicable.

Executive Overview

Electronic discovery or “e-discovery” came to the forefront of civil legal matters with the 2006 changes to the Federal Rules of Civil Procedure (FRCP). Since then, the e-discovery software market has been growing at a blistering pace of 50% or more, but according to leading industry sources, this growth will slow to between 25% and 35% annually from 2010-2012.

Increasingly lawyers and support personnel (e.g. IT and records managers) must keep current with cases and changes in state law regarding the discovery of electronically stored information (ESI). ESI of varying types must be located, preserved and protected, collected, analyzed, reviewed, produced and managed over the document life cycle.

The revised FRCP cover the discovery procedures during civil litigation and attorneys, managers and support personnel must take specific steps to ensure compliance and

readiness. Key to this is that business records must be defined and kept according to written records management policies and a retention schedule for varying types of records.

E-discovery, also known as electronic data discovery (EDD) includes and overlaps with other technologies and disciplines, including records management (RM), email archiving, enterprise content management (ECM), and enterprise search. E-discovery is a separate and distinct area, independent of other complementary or overlapping areas. E-discovery

requires, at different points in the process, a combination of functionality; for instance, email archiving software may play a large role early on, but sophisticated search and pattern

recognition software is needed to sift through the vast stores of email messages and related e-documents, and then the shaping and presentation of the findings requires still other distinct functionality. E-discovery is esoteric and changing, and court decisions that have followed that impact the legal and legitimate processes in the discovery process.

Email is the leading piece of evidence requested at civil trials. Additional ESI is subject to the FRCP Rules, so attorneys must also be actively involved in developing email and IM policy, and policy for all electronic communications including blogs and social networks. Policies must be established and enforced through disciplinary actions your organization could suffer fines and other legal penalties.

(6)

5 More and more enterprises are looking to cut costs and increase control by bringing parts of the e-discovery process in-house, especially records management functions.

For example, Raytheon, Eastman Chemical, and Pitney-Bowes all touted cost savings of in-sourcing portions of the discovery process. Verizon saved about $4M in one year and the company expects a nearly 400% return on investment over the next three years.1

Demand for e-discovery functionality has emerged as centering around the processes defined in the Electronic Discovery Reference Model,2_{but particularly in the Processing,}

Review, Analysis step, where the vast majority of cost occurs, (since it is time-intensive for attorneys).

Over 98% of companies with over $1 billion in revenue are involved in between one and 20 lawsuits with claims over $20 million with the average suit costing over $1.5 million to defend.3

But attorney review costs can be cut drastically by utilizing electronic document management and e-discovery software, one study citing as much as almost 90% providing clear

justification for purchasing e-discovery and related software.

1_{Law Technology News, 8 October 2008} 2_edrm.net

(7)

Managing e-records is primarily a legal issue, especially for public and heavily-regulated companies.

Legal Requests Often Begin with Email

In January, 2010, a House committee probing bailout deals subpoenaed the Federal Reserve Bank of New York for email and other correspondence from Treasury Secretary Timothy Geithner (former president of the New York Fed) and other officials. The House Oversight and Government Affairs Committee was in the process of examining New York Fed decisions that funneled billions of dollars to big banks including Goldman Sachs Group Inc. and Morgan Stanley.4

E-Record Retention: Fundamentally a Legal Issue

The retention of email and other e-records is a legal issue. Although the records management and IT departments can

certainly help the legal department understand retention challenges and archiving solutions, e-record retention is fundamentally a legal issue, particularly for

companies that are publicly traded or heavily regulated. It is essential for the legal

department to take the lead in determining precisely which types of email messages will be preserved, exactly how and where data will be stored, and specifically when—if ever— electronically stored information (ESI) will be deleted.5

Best Practices: 5 Compliance Tips for Effective Electronic

Records Management

Be sure to establish Best Practices-based policies and procedures as a part of your organization’s overall electronic communications program to govern the preservation, production, and purging of ESI. You should be ready at any time to respond to litigation holds and production requests of electronic records. Here are five tips your organization needs to adopt for effective compliance, and to stand ready when litigation or compliance hearings begin:

1. Establish a clear definition of “business record” on a company-wide or departmental

basis;

2. Communicate your organization’s definition of “business record” clearly and

consistently to all employees. Make sure they can differentiate between business-critical email and insignificant email exchanges. Also, everyone must understand their role and responsibility for managing e-records and purging potentially risky personal and nonbusiness-related email;

3. Establish and strictly enforce written policies, procedures and rules governing the

(8)

7

4. Understand and adhere to ESI retention and production rules required by federal

and state courts and governmental regulators;

5. Where possible, capitalize on available real-time archiving technology to ensure

incoming, outgoing and internal email messages are filtered/screened, captured, indexed and stored in a legally compliant, tamperproof way.6

Ten Key Functional Requirements for E-Discovery

Software

1. A REPOSITORY for archiving records and content that preserves files in an

unalterable format; the capability to tag or flag files for retention according to established retention schedules.

2. DATA INTEGRITY through preservation of not only files but also associated

metadata, and the ability to “freeze” documents that have a litigation hold by backing up to a secure repository.

3. Fundamental data and document PROCESSING including culling by file type,

de-duplication, the ability to categorize the data.

4. Basic keyword or Boolean SEARCH in a federated way across multiple repositories

(e.g. file servers, email archives, content management systems).

5. TRACKING the custodian's responses to preservation requests (If preservation is

custodian-led).

6. Ability to LOCATE AND IDENTIFY documents requested in the e-discovery process

using a full set of metadata, such as file owner/creator, creation date, date of last access, desktop or system of origin and keywords. A workflow-based system that routes documents helps to track custodian-led collection processes.

7. The ability to identify, mark and/or copy INDIVIDUAL FILES contained in e-mail

systems, file servers and bona fide electronic document management systems using either an (automated using a “copy and move” function) or custodian-led process (where attorneys identify individuals who created or controlled documents and request they be copied).

8. Verifiable REPORTS showing total set of documents, data and email messages that

have been collected, and also the subset of preserved documents and all custodian notifications. Data integrity of documents and metadata must be verifiable and demonstrable.

9. DOCUMENT REVIEW TOOLS that facilitate the review, categorization and tagging of

documents for inclusion in production — for opposing counsel, regulators or courts. Tools may include redaction and highlighting tools, complex search capabilities, visualization and pattern recognition, Bates Numbering, workflow or business process capabilities, categorization and classification functionality, native file format viewers, integration with common desktop tools such as Outlook or Notes, and the

E-DISCOVERY: A Primer

New for 2010