E-DISCOVERY: A Primer

Transcription

1 New for 2010 E-DISCOVERY: A Primer Electronic Discovery Principles, Best Practices & Standards A MANAGEMENT PRIMER Robert F. Smallwood, MBA With Amy Girst, J.D R. F. Smallwood and Charmaine Brooks Do Not Copy THIS REPORT IS A CRITICAL GUIDE FOR ATTORNEYS, PARALEGALS & LITIGATION SUPPORT PROFESSIONALS FOR ELECTRONIC DISCOVERY (E-DISCOVERY) CAPABILITIES IN THEIR FIRM.

2 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 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 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. Disclaimer 1

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. Table of Contents Executive Overview... 4 Legal Requests Often Begin with E-Record Retention: Fundamentally a Legal Issue... 6 Best Practices: 5 Compliance Tips Electronic Records Management 6 Ten Key Functional Requirements for E-Discovery Software Archiving A Critical Step is Often the Smoking Gun... 9 Ten Legal, Regulatory, and Business Reasons to Archive Best Practices for Record Management Are All s a Record? How Long Should You Keep Old ? Destructive retention of Five Characteristics of Reliable Evidence Automatic Archiving Protects the Integrity of Amendments to Federal Rules of Civil Procedure (2006) Guidelines for FRCP Preparation E-Discovery Additional Detail Just What Is Litigation Readiness? Archivable Use is NOT Required by Law Record-Free How the Law Views Unrecorded Stream Messaging Archiving Conclusions E-Discovery Project Planning Why E-Discovery Readiness is Important Your Organization Needs To Comply with the FRCP Electronically Stored Information E-Discovery Techniques E-Discovery Rules Issues with New E-Discovery Rules Legal Holds E-Discovery Readiness Approach to Building Readiness Knowing and Managing ESI Technology Know Organization s ESI ESI Retention ESI Management Plan & Instant Messaging Internet/Intranet Sites

4 9. E-Discovery Readiness: Ongoing Actions for Organizations E-discovery Conclusions Additional Resources 44 3

5 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 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), 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, 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 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. 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 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. Enterprises purchasing e-discovery software can reduce the costs of litigation by improving their control over unstructured and semi-structured content, especially archived messages. They can also cut costs and risks by taking control of litigation hold, litigationhold tracking, file collection, file processing and legal review instead of outsourcing these functions. 4

6 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 insourcing 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 edrm.net 3 Fulbright and Jaworski 2007 Litigation Trends Survey 5

7 Legal Requests Often Begin with In January, 2010, a House committee probing bailout deals subpoenaed the Federal Reserve Bank of New York for 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 and other e-records is a legal issue. Although the records management and IT departments can certainly help the legal department Managing e-records is primarily a understand retention challenges and legal issue, especially for public archiving solutions, e-record retention is and heavily-regulated companies. 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 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 businesscritical and insignificant exchanges. Also, everyone must understand their role and responsibility for managing e-records and purging potentially risky personal and nonbusiness-related ; 3. Establish and strictly enforce written policies, procedures and rules governing the retention and disposition of and other ESI; 4 House Subpoenas Geithner's AIG s, Phone Logs, Associated Press, Thu Jan 14, The E-Policy Handbook, p.20, N. Flynn,

8 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 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, deduplication, the ability to categorize the data. 4. Basic keyword or Boolean SEARCH in a federated way across multiple repositories (e.g. file servers, 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 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 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 6 The E-Policy Handbook, p.17-18, N. Flynn,