E-Discovery and Records Management

Discovery is the pre-trial phase in a lawsuit in which each party can request documents and other evidence from opposing parties. E-discovery deals with discovery of electronically stored information (ESI), including documents and e-mails.

E-Discovery preparedness makes it imperative for organizations to develop an enterprise wide strategy to manage the volume of electronic information. The discovery process affects many individuals in an organization, not just lawyers and others involved in discovery, but also IT professionals and records managers, who have to be prepared to produce electronic content for discovery and litigation.

For legal counsel, it means having a review process to determine what discovered content is relevant to the case. For an IT person, it means restoring backup tapes to show evidence on file shares, content management systems, e-mail systems, or other applications. But for records managers, this work will have begun long before any lawsuit with managing records for retention, placing legal holds, and finalizing disposition.

ESI presents special issues for discovery:

• ESI can be replicated at a very low cost, resulting in tremendous volume;
• Electronic content can be easily changed and deleted;
• ESI can be backed up, creating more volume as content is copied;
• Electronic content may require certain software to access and read;
• ESI can reflect relationships based upon how it is distributed;
• ESI may have associated metadata;
• ESI can be searched.

Ediscovery could be costly because it requires organizations to retrieve content from servers, archives, backup tapes, and other media.

In some cases, an organization is unable to execute a discovery order because it is unable to locate all content in a timely manner, or it is unable to place holds on all content and some of it is deleted during the lawsuit. The inability to do this correctly also has a cost, and it can be considerable.

To address these costs, many organizations are looking at e-discovery solutions that will enable them to review the found content and take it through litigation.

But organizations can also lower costs for archiving and restoring, legal review, and sanctions by simply cutting down how much content it retains. Less stored content means less content on which to perform discovery.

On the other hand, because all ESI is now discoverable, organizations may be tempted to destroy that information as soon as possible to reduce the cost of discovery. But, some information must be kept for regulatory and compliance reasons. For example, many organizations are governed by regulatory bodies that require business information to be retained for a specific period of time. Some of that information might also be important to support the organization in case of litigation. Destroying the wrong information can lead to fines and unfavorable judicial decisions.

Some organizations may randomly pick through content to remove content that is deemed most risky. But in litigation, it will be necessary to prove that the deletion of this content was consistent with a policy that has been applied rigorously. Without audit trails and certificates of destruction, it can be difficult to prove compliance with an organization’s policies.

To avoid this situation, many organizations are simply choosing to keep everything. But this experience proves that the cost of restoring backup and archive tapes, as well as the cost of discovery and the inability to identify content and place immediate holds, can make this policy economically disastrous in the event of litigation.

Developing a strategy and a plan of action for handling e-discovery will help organizations mitigate their risk and save them a significant amount of money in the event of litigation. Organizations need to have a retention policy to determine which content can be destroyed and at what time and which content should be kept and for how long. The key is to have a retention program that is flexible enough to keep content for the right retention period.

Retention periods are historically thought of in terms of calendar events. A document that was created in 2000 may no longer be required in 2012, and so it may be destroyed. Retention periods for content are driven by events, such as the length of a project, the duration of a contract, or the termination of an employee. And the retention policies that match up to these content types must reflect the lifecycle of the content.

Organizations may choose to keep project information for x number of years after the end of the project. A workflow event that signals the end of a project, such as the publishing of a report, may commence the retention period for the associated e-mails and files. An organization may create a retention policy that a contract will be retained for x number of years after the end of the contract period. The end of the contract, then, could then trigger a lifecycle action for that document.

There are many types of events that could trigger a retention policy: content expired (e.g. a contract), usage statistics (e.g., document has not been accessed in six months), business event (e.g., environmental impact filing), content lifecycle event (e.g., new revision checked in).

There are many actions an organization can take based upon the retention policy: delete, notify author, archive, move, delete revisions, revise. These different actions can be applied to retained content over the course of its lifecycle as it moves from its active use to inactive status to its deletion.

The best approach to records management is where authors create content using their familiar tools and systems, and retention management is enforced on that content where it lives, from a centralized place. This approach has a number of benefits:

• retention policies are centrally administered through a single interface;
• a catalog of discoverable content is created;
• holds can be placed instantly across these different systems, ensuring that evidence is not deleted during litigation;
• disposition can be performed from a central place.

By categorizing content, creating a catalog of the content, creating a retention plan, implementing a hold methodology, and having disposition procedures, an organization will benefit in many ways. They include:

• Decreased Risk – by keeping less content, an organization decreases the risk of adverse evidence being found;
• Higher Productivity – by organizing content through a file plan, key information, such as regulatory filings, tax information, business licenses, invoices, and other content, can be more easily found;
• Lower Discovery Costs – with less information available for discovery, an organization will reduce the cost of restoration of content and the cost of legal review;
• Increased Flexibility – an organization will be prepared to present a catalog of discoverable content, which is a requirement in a case of a litigation;
• Stronger Legal Action – By knowing the evidence that an organization possesses, legal counsel can more quickly assess strategy and pursue a settlement, which can be a huge money savings;
• Less Vulnerability – organizations that are unable to comply with electronic discovery requirements are beginning to see nuisance lawsuits. When an organization cannot comply with discovery requirements, it may set a cost threshold – stating, for instance, that any lawsuit under $100,000 is not worth the discovery effort and should be settled. This exposes the organization to nuisance lawsuits that are brought at just under the threshold.

If you have not already done so, now is the time to develop ESI retention programs. Now is the time to create committees within your organizations and to bring their expertise together with legal counsel and IT to prepare for e-discovery and litigation. And, now is the time to focus on one of any organization’s greatest assets, its information.