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WHEN WORLDS COLLIDE: PRACTICAL ELECTRONIC DISCOVERY AND LITIGATION PREPARATION FOR THE CIO

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Jul 9, 2008

WHEN WORLDS COLLIDE:  PRACTICAL ELECTRONIC DISCOVERY AND LITIGATION PREPARATION FOR THE CIO

Ann G. Fort, Esq.
Every CIO in America knows that, in late 2006, the federal courts imposed new electronic discovery burdens on virtually every organization in the country.  Even before the amended Federal Rules of Civil Procedure required all parties to include electronically stored information – ESI for short – in their mandatory disclosures and early discovery planning, lawyers learned that the smoking gun in any case was likely to be found in their opponents’ email files.  Demands for producing ESI grew, and now preserving, searching and producing ESI has become standard operating procedure in  federal litigation (and in most state court litigation, too). 
 These developments in the electronic discovery process mean that all IT organizations are being forced to participate in litigation, a process that can frustrate many IT professionals because they do not understand it, and because they feel marginalized from it.   But a CIO who takes the time to understand the rules, and then actively participates in this process, can make life easier for all concerned.  Based on my 15 years of experience, here are practical approaches for the CIO to pursue. 
 Understand that the law has gray areas.
 Some parts of these rules were written to accommodate the typical IT operation, but they end up favoring disclosure of relevant evidence.  For instance, when the ESI rules were being considered many businesses worried they would face spoliation sanctions if they failed to incur the cost of preserving all ESI in perpetuity.  The 2006 rules include a “safe harbor” for routine document destruction which appears to protect litigants from that threat—but only until they knew or should have known they were under a preservation obligation.  And under the same rules parties do not have to incur the costs of reconstructing data on back-up tapes – unless a court finds that there is good cause to order the electronic discovery in spite of the cost.   
 All this means that some risks in litigation preparedness will continue, at least for the next few years while the courts consider these issues. 
E-discovery best practices are ESI management best practices.
No one can blame the IT organization for viewing the legal department’s new demands as an intrusion on its daily business, particularly if the only previous communication between the company’s lawyers and the IT department had been through the Help Desk.  But the courts’ expectations for discovery of electronically stored information (or “ESI”), can be boiled down to these simple guidelines:
• The company needs a document retention schedule tailored to its particular business and regulatory requirements.
• The company can delete ESI, but this deletion must be in compliance with its document retention schedule, not in response to a legal claim or crisis.
• The company must be able to recognize when litigation is likely to arise.
• Once the company knows litigation is likely to arise, it must stop all destruction of relevant ESI.
Given the courts’ expectations about discovery of “ESI,” e-discovery preparedness is largely a matter of maintaining sound data management practices.   Rather than looking at e-discovery as a new burden, IT managers should view it as a normal, ongoing part of information management.  If ESI is being managed properly, the process of preserving and collecting relevant data should complement existing procedures, not bring them to a halt. 

E-discovery is about information access, not just disaster avoidance.
Most of the industry chatter about e-discovery has focused on avoiding spoliation --   the legal woes that can result when a party has failed to preserve evidence that the other side needs to  prove its case.  At least some of the horror stories actually are true.  Judges have ordered businesses to absorb the exorbitant costs of recovering data from back-up tapes after they concluded the data was relevant and should have been retained in active access.  Others have been punished with legal devices, like instructions to the jury that any missing documents should be presumed to harm the company’s case – instructions that virtually ensured a bad outcome for the offending company.
All of us want to avoid this kind of disaster, but it is important to remember that the smoking gun email can point either way.  Any party involved in litigation needs to retain the relevant ESI to find the information it needs to pursue its own case.  Thorough preservation makes it much more likely that your company’s lawyers will locate communications that contain valuable admissions, and use them against your opponent.  Taking this role seriously can turn the CIO into the GC’s new best friend.
Help your lawyers evaluate e-discovery technology. 
According to the 2007 Socha-Gelbman 5th Annual Electronic Discovery Survey, there are at least 580 vendors offering services and/or proprietary software for identifying, preserving, collecting, processing, reviewing, analyzing, producing and presenting ESI.   Currently, a lot of innovation is happening at the review and analysis stages, with some of these vendors offering software that purports to automate more of the process of identifying key documents and weeding out irrelevant ones, such as by grouping similar documents together for mass classification, identifying “near duplicate” documents, and similar functions.
Many lawyers know they should be using these more advanced tools, but they are scared to death of them.  These tools are expensive, and most lawyers don’t know how to evaluate them.  No attorney wants to recommend that the client spend hundreds of thousands of dollars (or even more) on a service that may not deliver what was promised.  In some instances this fear leads lawyers to fall back on the reliable, but laborious, collection and review methods they have used for five years or more. 
Failing to adopt new technology for e-discovery review and analysis can prevent your company from efficiently identifying key evidence.  As the CIO, you have years of experience helping your company adopt new technology.  You can save your company a lot of time and money if you learn about these e-discovery innovations and educate your colleagues in the general counsel’s office about them.  At the beginning of your next e-discovery project, ask what kind of review and analysis technology will be used, and how automated it is.  Offer to research the major vendors to evaluate this technology the same way you would any other IT product. 
Help control e-discovery costs.
CIOs know how much money they spend on IT consulting when they need it.  While data processing for e-discovery is a specialized process, it can and should be evaluated for cost and efficiency.  Competition in this business is tight; most vendors are willing to negotiate their per-gigabyte processing fees.  Because a CIO has experience comparing and bargaining for information services and software, you, rather than the lawyer, may be able to obtain the best discount, and then monitor the charges to keep the vendor honest.
Think about e-discovery when you don’t need it.
This may sound counter-intuitive, but the best time to think about e-discovery is during a cease fire, not during the moment of maximum stress, such as after the company has been hit with a lawsuit.  If it’s a good idea for the CIO to evaluate e-discovery vendors  after the case is under way, it’s a great idea to do that when no one is under pressure to produce documents under a court-imposed deadline.
Lead by example. 
Courts have been resolving an increasing number of e-discovery disputes.  For that last year or two, forty percent of the largest companies have reported that electronic discovery disputes arose “sometimes” or “frequently” in their cases.  But these disputes are becoming more common for smaller and mid-sized companies.   Given these trends, chances are good that your company’s IT practices will be scrutinized by a judge, and possibly by a jury. 
All of the same document preservation rules and ESI best practices that apply to the sales operation apply to the IT shop.  If you are preaching to the rest of the company that they should use email less, file only substantive email off to the server, and store all ESI on the server and not on their hard drives, be sure you and your people are following the same rules.  Things will go much better in court if your staff can testify truthfully and completely about your company’s policies and procedures, and confirm that they routinely comply with them.
At first blush, the e-discovery requirements now imposed by the courts can seem like a lot of new headaches for IT departments.  But e-discovery has become a necessary part of sound information management practice, and doing it well will give your company the information it needs to succeed when  lawsuits arise.  The tools for ESI management have become more powerful and complex, and IT managers should use their skills and experience to encourage their companies’ legal teams to adopt the most appropriate tools for any given e-discovery project.  All of this requires a good working knowledge of e-discovery, and clear, routine communication between the General Counsel’s office and IT management.
  
 

 

Ann G. Fort is a partner at the Atlanta law firm of Sutherland Asbill & Brennan LLP.  She specializes in intellectual property litigation, and chairs the firm’s Electronic Discovery Committee.

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