We now live in a modern litigation world in which the unearthing, securing and producing of electronically stored information (“Electronic Stored Information” or “ESI” as it is referred to by the new Federal Rules of Civil Procedure) changes the balance of power in litigation. If you are an organization with lots of information in various forms, in various places, your organization has exposure. Practically speaking, companies now routinely make “business decisions” to settle cases rather than spend large sums on discovery and thereafter to litigate the dispute. Cases with underlying business disputes can cease being about the legal claim and turn into an expensive, painful public discovery circus, where the 50,000 pound elephant causes injury to all who enter the fray. The business decisions impacting organizations goes something like this: “If our people will be inconvenienced, the IT department needs to be taken off their projects and IT systems taken offline, and we still need to spend $100,000 on “experts” just to do discovery, then perhaps it is prudent to make the case go away for $50,000, even if the legal merits are questionable”. Enter the world of e-discovery. No matter how hard you try to find and produce anything and everything for a lawsuit, it will be a challenge—perhaps an impossibility. But why?
Why is discovery such a headache?
We live in an expanding universe of data with distant parking lots housing company information that may not be logically located. According to IDC there will be 988 new exabytes of data by 2011. To put that in context, it is said that one exabyte of data is the equivalent of 50,000 years of DVD video content. All of a sudden 988 exabytes of data looks like the information equivalent of the distance the Hubble takes us into space. And that information universe is expanding rapidly. Most businesses have lost centralized control over all data and computers. More and more information can be stored on smaller and smaller devices. Businesses use the wrong technology for the job, which is why disaster recovery back-up tapes may create way more disasters than they fix. Employees decide where to park info and when bad company policy dictates a purge of data due to limited storage capacities, employees park company records at home, on a thumb drive or a third party storage network. They’re making the perfect information mismanagement storm that will no doubt cast its shadow on your organization if you have any sizable litigation.
One Bad E-discovery Event is All the Religion You Need
When trying to motivate clients to be proactive with information management, we regularly hear that they have very few lawsuits and they are not worried. The score after the first round is “confidence”-1, and “stoooopidity”-100. Right answer to the wrong question. Getting trounced by the e-disco dancing elephant is not about having many lawsuits. Rather it is about having one lawsuit where enough money is at stake to make life miserable for you by playing the discovery card. It’s the corporate “go-fish” exercise where the pond is seemingly boundless, and the pound of flesh exhumed may be tangentially relevant or harmful or just outright embarrassing. Either way the exercise of looking just to see if something is relevant is both inconvenient and expensive saying nothing of how the contents you find will impact the case.
So, if you are likely to have to produce lots of electronic information or look in lots of places for ESI even if your revenue is not huge and the numbers of employees is only a few thousand, don’t be complacent.
Being proactive is how you tame the discovery tiger. (I am looking for yet one more metaphor to annoy you the reader, so if you can think of one that I missed please send me an email at email@example.com )
If you are going to minimize the headache from discovery this is a beginners’ roadmap to help the non-behemoth company on your way.
1. Make sure you have good Records Management rules and apply them to the business content. It allows business records and information to be properly disposed of when no longer needed according to documented policy. Make the rules easy and simple and high-level. If you need help, call. We are happy to provide a little free advice. The less unnecessary around to manage and look through, the less painful discovery will be.
2. Once your company is retaining records, you need to make sure you are doing so on the right medium. Disaster recovery tapes are great technology to park huge quantities of stuff in the unlikely event of disaster, but if you need to find a record, you need an archive or RM or DM software application.
3. Have a Legal Hold Policy for all employees to follow that is issued by lawyers telling the rest of the company what information needs to be preserved, when and in what form. It does not need to be big and complex but it does need to deal with basics-- who should preserve, what information Is affected and where to put it.
4. Develop a Litigation Response Plan which can reflect the size and formality of your business. Don’t build the Taj Mahal if you don’t need it. Document who will do what and how the IT and lawyers will interface. Maybe you will need some technical guidelines of how to preserve, and rules for employees but make it useful and simple.
5. One of the things the New FRCP requires to know is your source of ESI. Some folks call it a Mapping of Sources. Whatever you call it, you need to document what you have, where you have it, in what system it resides and who controls it.
6. Legal Hold Mechanism (Notice and Issuance documentation). After it is determined that you need to tell some or all employees to preserve information, thereafter you need to document the effort. If something slips through the cracks, and stuff always does, at least you can show what a good company you are by what you did undertake. So retain proof you did the right thing.
Being littler has its privileges—you don’t need to build it like the big guys. You can be less formal, less proscriptive, but in the end, you need the things above to get through discovery in the bad case with your pocket book intact and your employees bruise-free.
“Not my problem, we don’t have a ton of litigation” is not an appropriate response. The first time you get sued, you may have the e-disco elephant sitting on your head and that smarts. The question is—“do you feel lucky”.
By Randolph Kahn, ESQ.