William E. O'Neil, Jr., Esq., eDiscovery expert

by William E. O’Neil, Jr, Esq.

It has been an interesting first half of the year for e-Discovery cases. The “Pension Committee” case “revisited” the Zubalake decisions and re-affirmed the duties for legal counsel when managing the Discovery & legal hold processes.  But, it still seems some are willing to take the risks of possible spoliation of evidence…I speak with clients across the country and have been asked the question more than once…”why should I care about Pension Committee…I am not in the 2^nd Circuit…”

Because…the standards established in in Zubalake, codified in the Federal Rule changes and “revisited” in “Pension Committee” are the standard for legal counsel. They are just explained in detail in “Pension Committee”.  Counsel needs to understand who the “key players” are, what ESI exists, where it resides and ensure the risk of spoliation is reasonably mitigated.  The lack of an e-Discovery strategy and a defensible process for legal hold management and preservation & collection is not a viable defense anymore…whether spoliation is negligent or intentional.

There was an interesting spoliation case decided in the 10^th Circuit.  In “ Medcorp”, the plaintiff allegedly destroyed ESI on 43 hard drives .  The fact that it was done was not in dispute, whether it was intentional, willful or negligent and what should be the consequences of the destruction was at issue.   The defendants requested the action be dismissed and the Plaintiffs argued minimal impact by having provided “some” of the ESI from another source.

The court applied the standards for determining sanctions for spoliation outlined in the “Pension Committee” decision…“[a]ppropriate sanctions should ‘(1) deter the parties from engaging in spoliation; (2) place the risk of an erroneous judgment on the party who wrongfully created the risk; and (3) restore “the prejudiced party to the same position [it] would have been in absent the wrongful destruction of evidence by the opposing party.”

Here, the Court found the Plaintiff’s conduct was negligent rather than intentional. As such, the Court awarded the defendant’s attorney fees, expert witness fees and expenses related to litigating the spoliation issue…AND ordered a “negative inference” jury instruction…allowing the jury to infer the ESI on the 43 hard drives would be detrimental to the Plaintiff’s case.

This is a steep price for counsel to pay for not exercising proper oversight over discovery!

SEE: Medcorp., Inc. v. Pinpoint Technologies, Inc., et al 2010 WL 2500301 (D. Colo.).

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Matthew Nelson, Esq., EMC eDiscovery Expert

Does the Pension Committee Amended Opinion and Order Go Far Enough?

The Pension Committee Blog Series

On January 1, 2010, Judge Scheindlin re-established her ability to captivate legal audiences by authoring an opinion that struck fear into the hearts of many litigators and the parties they represent.

Dubbed “Zubulake Revisited: Six Years Later”, the Pension Committee decision serves as the “snooze button” for those practitioners who may have slept through the original eDiscovery “wake up call” sounded by Judge Scheindlin in her oft quoted Zubulake line of decisions.

Not surprisingly, opinions designed to offer clarity regarding a controversial subject such as electronic discovery, are destined to have both supporters and critics.  What is surprising, is that Judge Scheindlin responded to many critics quickly by issuing an amended Pension Committee Order and Opinion on January 15, 2010, to clear up language that could be characterized as confusing at best and inconsistent with previous case law at worst.

The Amended Order primarily clarifies language that could lead one to believe that a duty to preserve and possibly search backup tapes that relate to “key players” always exists.  The Amended Order clarifies the issue in a number of areas, but cautionary footnote number 99 arguably frames the issue best:

“I am not requiring that all backup tapes must be preserved.  Rather, if such tapes are the sole source of relevant information (e.g., the active files of key players are no longer available), then such backup tapes should be segregated and preserved.  When accessible data satisfies the requirement to search for and produce relevant information, there is no need to save or search backup tapes.” Pension Committee of the Univ. of Montreal Pension Plan, et al., v. Banc of America Securities, LLC, et al. at 42.

Footnote 99 is a potential trap for the unwary because its apparent simplicity could lead some practitioners to take backup tape preservation less seriously.  Does Footnote 99 and the rest of the Amended Pension Committee Opinion and Order go far enough in clarifying the tricky backup tape issue that gives so many organizations headaches?

Join our discussion and make your opinion(s) known, as we probe the case’s lingering questions and foreboding implications in The Pension Committee Blog Series.

By James Shook, Esq., EMC SourceOne eDiscovery Expert

James D. Shook, Esq., CIPP

Having an Early Case Assessment (ECA) capability is absolutely imperative for corporations to deliver rapid insight into a potential or pending litigation, so that the corporation can determine risk and exposure quickly and accurately.   What are the top five considerations corporate counsel should investigate prior to making an ECA investment?

1. Ability To Immediately View Data In-Place – Some systems touting “ECA” cannot actually view data until it has been collected.  When looking at ECA capabilities, you need to determine whether such delays really meet your needs.  With recent cases like Pension Committee, which discuss how critical it is to quickly identify key players, the capability to immediately start reviewing email, desktop files, SharePoint data, etc. in the production environment can be extremely important.
2. Scope of Data Available — Determine what the system can actually access for early case assessment purposes.  For example, systems that can view only “archived” data can be of extremely limited value when a case first starts and you are trying to determine key custodians and where they are storing relevant data, etc.  For example, in a straightforward trade secrets case — is it more likely that relevant data would reside in or outside an official archive?
3. Search, Culling and Reporting Capabilities — A good ECA system will enable access to a lot of data, so the ability to rapidly cull the important from the mundane is critical.  Capabilities such as email threading, proximity searching and rapid searches — where a search is run against an index and returns results in seconds instead of hours — are all critical.  Similarly, visual maps of data — how much data, how old is it, who are the custodians, what types of files are present — can be critical to fast case evaluation.
4. Concept and “Smart” Search Technologies – Having the system do some of the work for you can also be critical, so solutions that employ concept searching, fuzzy search and other “smart” technologies can identify data and people that might not ordinarily be found.  For example, concept search can make code words jump right out, and also group common concept together (location, people, etc.) making evaluation faster.
5. Ease of Use — None of the technologies are very useful, if they cannot be used by the actual investigators who may not have strong IT backgrounds (lawyers, paralegals, etc.). Easy-to-use web-based interfaces, allowing click-throughs instead of requiring users to memorize lists of arcane commands make solutions much more accessible to the investigators.

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Jake Frazier, MBA, Esq.

Question: What does bringing e-discovery “in-house” mean, and why is it important?

Jake Frazier: E-discovery is a process fraught with risk of non-compliance, which results in huge costs that can be incurred when undergoing that process. Historically, companies have relied on outside vendors and consultants to do a lot of e-discovery for them. However, as the years went by, research and analyst firms like Gartner started to put four corners around this e-discovery problem, and actually came up with metrics on how much the different phases of e-discovery cost. This allowed companies to evaluate whether the process could be brought in-house and also measure efficiencies by leveraging investments and ROI.

Now that companies realize litigation is inevitable — with the amendments to the Federal Rules of Civil Procedure (FRCP) — and e-discovery is here to stay, they are starting to look at the most efficient way of doing this. This leads to companies assessing which tools and processes can be brought in-house behind the firewall so that e-discovery is conducted using tools that can be purchased, rather than hiring consultants for each new case and getting no bang for their buck from an investment standpoint.

Question: How does forensics play into this?

Jake Frazier: Those who are fairly new to e-discovery will make the comparison to computer forensics. Although forensics is a part of e-discovery at time, they are two different things for the most part. For example, if somebody is doctoring Excel sheets to inflate company earnings or has other contrabands on their computer, forensics would be the process of taking a mirror image of that hard drive and having certified technicians investigate and conduct data recovery processes to retrieve critical evidence that may have been lost either intentionally or accidentally. This is opposed to civil litigation, where no criminal charges are involved.

Whereas criminal investigations require retrieving evidence no matter what it takes, that’s not necessarily true in a civil case, which is governed by the FRCP and the concept of proportionality.

Therefore, forensics started to exit the average civil litigations. However, I still think that forensics can play an important role if there is evidence of alleged fraud or risk of criminal investigation and charges. Forensics can be used for those witnesses or custodians of records at the heart of the matter. In the past, companies would have performed forensic imaging on hundreds and thousands of drives and other pieces of media to investigate those even tangentially involved, but today we largely see FRCP’s proportionality stopping people from doing what they used to.

Question: What is the difference between appliance-based products and software-based products? Additionally, are there endto- end products available?

Jake Frazier: As companies realized the efficiencies of bringing e-discovery processes in-house and optimizing them by purchasing tools that can be used again and again, we started to see the market evolve for in-house e-discovery software. However, companies recognize the long uptake associated with software—installing, training, and getting it up and running—and often go outside of the organization to bring in consultants to do the work. The problem with this approach is that once the matter is over, there is no impetus to make changes or get a budget for these types of matters that could likely arise in the future.

Therefore, we started to see companies turn to e-discovery appliances, which really offer companies the best of both worlds. Essentially, it is like a server that is brought into a datacenter which already has the software preconfigured on it.

It is then simply plugged into the wall and becomes a visible network appliance that kicks off collections and allows lawyers to see documents and understand the strength of their case before either going through the cumbersome process of collecting documents or changing their strategy entirely. This network appliance can crawl through the network and provide a full view of everyone involved in the company’s litigation so that only those documents meeting the criteria can be found and moved over to a secure litigation repository—all in an automated way. So I believe appliancebased products are now preferable, and we see more companies gravitating towards them.

Question: What are the components of information governance?

Jake Frazier: I use the analogy that if e-discovery is the root canal, information governance is the brushing and flossing. If a corporation conducts diligent maintenance of its data, there is much less information that has to be processed through e-discovery. Gartner’s study found that every gigabyte of data—which is about 75,000 printed pages—sent to outside counsel for an attorneyclient privilege review costs about $18,750. It’s not uncommon for large corporations to send upwards of 100 gigabytes of data, so it quickly adds up to a sharp cost.

Generally, companies are getting over the sticker shock of e-discovery and are doing a good job of managing the proactive stance to e-discovery. They are even looking one step further at actually creating and maintaining the organization’s information. We see staggering amounts of data growing exponentially, and eventually, I believe, it will start to cripple any aspects of doing e-discovery efficiently.

Information governance is a way to make sure you secure the information that should be secured, retain the information that needs to be retained, dispose the information that you no longer need, and optimize the process for the next time around.

Many experts have been championing information governance for quite some time; we see it as the nirvana and e-discovery as the tip of the spear, which has made it a key focus point for organizations. Information governance allows organizations to treat information as the asset that it is, rather than a liability.

Question: What does acquisition of the data indexer company Kazeon mean for EMC’s approach to e-discovery?

Jake Frazier: Because EMC offers so many data infrastructure storage, content management, and archiving platforms like Documentum and SourceOne, companies around the world entrust their critical information to EMC. However, from an information governance and e-discovery standpoint, there were gaps with information “in the wild”— for example, on desktops, laptops, file shares, share points, or other disparate repositories— which is critical and subject to e-discovery.

So we are extremely excited about the acquisition with Kazeon because we are now able to provide a tool to search, crawl and build an index of every document out there to help our customers get an idea of what their liability is; it finally provides a window to those blind spots of unstructured information, which is a very valuable tool for information governance. Also, Kazeon is very unique because it enables our customers to take action on that data—such as deleting, retaining, storing, etc.—whereas traditional enterprise search failed to do this. Kazeon enables customers to delete unnecessary information with a defensible audit trail showing exactly the criteria that was used and make a forensically sound copy of information that is subject to a litigation hold. Once that information is in a litigation hold, attorneys can simply log in and run searches to view documents and separate the wheat from the chaff, which will reduce the amount of data, streamline the process, reduce risk and ultimately save a lot of money. So we’re pretty excited about all of this, and we see great things in the future for Kazeon in our SourceOne family of products.

Question: What does the future hold for e-discovery?

Jake Frazier: For the most part, I see a development towards corporations practicing the right proportionality, which is something I really can’t stress enough when I talk to people about e-discovery. Rule 26 in the FRCP about e-discovery and proportionality is really key. It is extremely important to take the right amount of action in proportion to each case.

I see the evolving case law moving companies along from not doing enough or going overboard to making an educated move towards proportionality being practiced in their e-discovery practices. The ever-increasing volume of data will continue to drive costs; however, I think proactive information governance and due diligence will serve as the only real solution for this problem, maintaining the right balance to ensure compliance with the obligations under the law, but keeping e-discovery costs from having a devastating effect on legal departments and the corporate bottom line.

eDiscovery StraightTalk by Jake Frazier, MBA, Esq.

We hope you have found this issue of eDiscovery StraightTalk insightful.  If you have questions that you would like to have answered in future issues, please submit them via email at david@kazeon.com.

Question: What is the technology that is the most challenging for legal professionals today?

Shook: In my opinion, hashing algorithms remain one of the greatest but least understood technologies in the legal world.  A hashing algorithm takes an electronic “file” (which could be almost anything — word processing or spreadsheet document, email, sound, video, etc.) as input and returns a unique sequence — a fingerprint — as output.  If you change even a single bit in the input file, the hash returns a completely different fingerprint.  Thus, the SHA-1 hash value of this document as I write it is “CD2EF5D9931033F54A49AF4046EDA61DAF6FFE9D”; but adding just a few words changes that value to the completely different “64C2068B3273122E42D64ED0DDB948E8941CECA9″.

Question: So, the SHA-1 hash value for a file is unique like a digital fingerprint for the document to prove its authenticity?

Shook: Yes, absolutely.   Also, we can quickly see that there are a vast number of uses for a tool like the hash algorithm, particularly in the legal and eDiscovery world.  One of the most useful purposes is leveraging the hash in de-duplication:  files with the same hash value are consolidated into a single object, and all files with that identical hash value “point” to that common object.  Among other benefits, this can save a substantial amount of storage.  A second common purpose is in determining and reporting the level of duplicate objects across a system, repository, custodian group or even in a document production.  Hashes can also be used to track all locations of a specific document across an entire infrastructure, and take action on those documents as needed.  For example, we have had clients use our tools to track all locations of a classified document — located by its hash value — to determine whether any copies reside outside of permitted repositories, such as on unprotected fileshares.  When located, those unauthorized copies can be deleted or reported on.

Question: Will hashing ever replace the traditional Bates Stamping?

Shook: I believe it will.  One completely underutilized area, in the legal world, is using the hash value, or a small portion of the value, as a document’s identifier in a case, instead of the very old-fashioned Bates Stamp.  As a litigator from “way back”, I can remember problems with Bates Stamps in cases involving mere thousands of documents — important documents, produced several times, would have several different Bates values; some would have illegible or mis-identified Bates stamps.  In some cases, litigants who would stamp each page with a separate number, while others would stamp only the first page of a “document” (with the determination made on whether that document had been stapled or paper-clipped), etc.  Sometimes the same numbers would be re-used, and there could be two or three identical numbers referring to different documents.  (Fellow Sedona Conference member Ralph Losey has written an excellent law review article that goes into great depth on hash values and the bates stamp, which can be found at: http://ralphlosey.files.wordpress.com/2008/07/hasharticleloseycorrected.pdf).  Substituting the hash value for the Bates Stamp is such an elegant, simple solution to the document ID problem that I am surprised each time I hear a customer requirement for Bates Stamping.

Question: I think we can all understand the Bates Stamps….however, the technical speak around SHA-1 hashing is mathematical jargon. Does a legal professional need to understand to leverage the SHA-1?

Shook: Of course, as with any technology you need to have an understanding of how it works to properly leverage its use.  One must-have bit of knowledge in the eDiscovery space is to understand exactly what is being fed into the hash algorithm to compute the fingerprint output, and how different options will affect your results.  For example, most hashing tools will use the “core” content of an file object when computing its hash value, ignoring the so-called system metadata such as the filename, date of creation, etc.  This is an extremely useful decision in most cases, because it insures that a file will be identified as a copy regardless of whether its filename has been changed or its last date of access has been modified.  However, in some cases the name of the file may be extremely important across otherwise identical files, and you will not want to de-duplicate based solely upon the hash value.  In the case of email messages, there are so many different potential fields for hashing that you’ll want to understand exactly what is being used in a particular instance.

EMC SourceOne eDiscovery – Kazeon solution makes extensive use of hash technologies in all of these areas.  And in keeping with our basic design philosophy of giving you choices, it does not force you into one method.   For example, while de-duplication is typically a needed and desired feature in eDiscovery, there are times where it is not be useful.  In the Kazeon solution, when working with a document set, there is a choice as to whether documents should be de-duplicated based upon hash values or if they should all be maintained separately.

eDiscovery StraightTalk with James D. Shook, Esq.

We hope you have found this issue of eDiscovery StraightTalk insightful.  If you have questions that you would like to have answered in future issues, please submit them via email at david@kazeon.com.

O’Neil: Most organizations whether public companies, privately held companies, public entities or non-profit organizations deal with some form of audit, internal or external investigation or litigation requiring preservation of information.  Most deal with a combination of all three, yet have not established standardized business processes to efficiently manage costs and mitigate legal and regulatory risks.

One key challenge many organization’s deal with is effectively and efficiently managing the legal hold process.  Most organizations struggle to identify all relevant custodians in a timely manner, notify the custodian to preserve, determine where the responsive electronically stored information (ESI) resides based on custodian behavior.  Many organizations rely on the custodian to identify and preserve ESI.  Very few organizations also have a formalized process to initiate the legal hold, obtain acknowledgement from all custodians of the duty to preserve, manage and retain relevant records associated with preservation and finally regularly review the legal holds in place and release a legal hold once the matter is resolved.

Another area that many organizations could more effectively manage is conducting an Early Case Assessment to understand the legal and regulatory aspects of the matter and the costs associated with pursuing the matter or settling the matter.  The cost of discovery and interruption of business processes affecting IT, Records Management, Compliance, the business and the legal functions are not typically understood and incorporated into the legal analysis of how to best manage the particular matter as a business process.

Lastly, few organizations have the ability to look across the enterprise and review and analyze potentially responsive information without first collecting large quantities of data and having the data reviewed for responsiveness.  This creates several challenges from both the business perspective and the legal review process.  From a business perspective, typically preservation comes in the form of retaining backup media and suspending the disposal of information and records. From the legal perspective, there is limited visibility into the details of the matter to assess risk, costs and determine next steps.  When tradition discovery methods of over-collecting ESI the collection sets are larger and increased volume of amount of potentially responsive ESI is pushed into the review process and ultimately driving up legal and regulatory costs.

eDiscovery StraightTalk by William O’Neil, Esq.

We hope you have found this issue of eDiscovery StraightTalk insightful.  If you have questions that you would like to have answered in future issues, please submit them via email at david@kazeon.com.

Question:

O’Neil: The short answer is that heavily regulated industries like financial services, life sciences, and health care providers typically have a significant number of legal and regulatory events requiring preservation and production of electronically stored information (ESI) on an annual basis.
The current economic downturn has created the perfect storm for many financial services organizations…reduced profits, increased regulatory scrutiny, disgruntled shareholders and a complex transaction-based business model.  Many financial services organizations are dealing with this problem by retaining all ESI within the purview of the organization.  The trend results in the “double-edged sword” of needing to retain, manage and preserve information which it had no legal or regulatory requirement to retain for an indefinite period of time and also paying the cost to review, analyze and produce the information for legal and regulatory purposes.

Life sciences companies, particularly pharmaceutical companies, need to retain information related to the product supply chain, FDA communications, clinical trials, as well as other corporate records typically retained.  Many of these organizations have operations in multiple countries, create content in multiple languages, engage in mergers and acquisitions and have complex compliance issues related to anti-trust, intellectual property, privacy issues and significant litigation requirements.

The Healthcare industry has unique challenges surrounding retention and security of patient medical records and PII, medical malpractice claims, vendor and contract management.  The lack of standards for medical records retention results in retaining patient data and records indefinitely and replication of information.  All these factors make for eDiscovery which is costly and riddled with over-production due to the operational inefficiencies created by the complex nature of the problem and the lack of defensible strategy and lack of scalable and repeatable processes to deal with the business problem.

All this said, litigation is a cost of doing business for many organizations across all segments of the public and private sectors.  Organizations should examine and understand their legal and regulatory profile and their IT infrastructure to be prepared for discovery.  Managing legal and regulatory challenges requires a holist understanding of the business problems, costs, risks and potential return on an investment in technology to drive sustainable change.

eDiscovery StraightTalk by William O’Neil, Esq.

We hope you have found this issue of eDiscovery StraightTalk insightful.  If you have questions that you would like to have answered in future issues, please submit them via email at david@kazeon.com.

Heidi Maher, Esq. eDiscovery Expert

Question: In your experience, what is the top three eDiscovery challenges you seen?
Maher: In my experience in talking with IT and legal personnel at some of the largest corporations, their biggest pain points are:

1. Legal’s expectation of IT to keep “everything forever”
2. IT’s frustration with Legal’s “analysis paralysis”
3. Level of business disruption with each eDiscovery event

Keeping Everything Forever

With the passing of the Amendments to the Federal Rules of Civil Procedure, many organizations were blind sighted by the requirements that go along with electronic discovery.  Since, they did not have a method of finding and preserving data, the only alternative was to hold backup tapes, suspend email and document retention policies, and hold on to legacy systems such as retired servers and databases, hard drives of former employees, etc. Though costly, it was better than facing sanctions for spoliation of data. Due to government investigations or large lawsuits, more and more companies are on “perpetual litigation hold”.  This can be very frustrating to their IT departments as they are now in charge of maintaining increasingly larger amounts of data with little to no increase in their budget.

Analysis Paralysis

The more electronic data piles up, the more the need for good information management. However, IT cannot make retention policies, they merely enforce them.  They must wait for the legal and business units to give them the rules by which they can start to separate the data they should keep from the data that they can delete.

Though the headache of dealing with out of control amounts of data is an everyday concern for IT, legal and business units have many other concerns.  Typically it is only when a large eDiscovery event occurs, that it finally hits home that their ineffective records management, along with the shrinking cost of storage space for electronic data, has led to skyrocketing hours needed for attorney review.  It is usually at this point that an eDiscovery task force is pulled together from various departments.  These task force members often times have conflicting agendas.  General Counsel wants to minimize legal risk, the business unit wants to minimize cost and disruption to the company and IT wants to reduce the expectation of doing more with less.  That’s part of the reason why it can take months or a year to come up with just an email retention policy that everyone can agree on.  The other frequently cited reason is that even if the task force comes up with a policy, there is no one at the company who is willing to take the risk of the final sign-off.

Business Disruption

Unless a company has a well implemented in-house eDiscovery model, when a large eDiscovery event hits, it is by all accounts a “fire-drill”.  This is no fun for anyone.  Legal must send out and track litigation hold notices to the appropriate personnel, order IT to preserve and collect data, meet with outside counsel on strategy, and cross their fingers that everyone performs as expected.  IT is tasked to determine where the relevant data sits, then preserve and collect it – all in a very short time frame.  This can lead to a delay or postponement of other IT initiatives necessary to keep the company’s enterprise current and running smoothly. On the business side, employees have to take time out of their day to look for relevant emails and documents on their PCs and in their physical files.  Sometimes, they must suspend their normal workday for hours at a time for their computer to be taken off-line and imaged.  All this means lost revenue and productivity for a corporation.  If a these fire-drills occur more frequently, there can be significant impact on a company’s bottom line.

eDiscovery StraightTalk by Heidi Maher, Esq.

We hope you have found this issue of eDiscovery StraightTalk insightful.  If you have questions that you would like to have answered in future issues, please submit them via email at david@kazeon.com.

James D. Shook, Esq., CIPP

In this issue of eDiscovery StraightTalk, we interview James D. Shook, Esq., CIPP, a noted attorney, author, lecturer and a recognized eDiscovery and Compliance legal expert. SourceOne Kazeon asks the questions and Jim gives us the straight talk on what the challenges and issues are in eDiscovery deployments across the Fortune 500.

SourceOne Kazeon: In your experience, what are the top eDiscovery challenges that customers are experiencing today?

Shook: There are certainly a lot of challenges, and they vary greatly by customer.  But if I have to pick just a few….

While one might anticipate that the top challenge would be something complex — like what to do about Instant Messaging, transient data or even data in “the cloud” — the real winner is something very basic — the lack of good communication between IT and Legal departments on these issues.  Without those two groups working together in an open, efficient manner, very little meaningful progress can be made.

Another big challenge is just how difficult it is to translate legal principles to IT systems and vice-versa.  It’s one thing to talk about “preservation” of ESI as a legal principle, quite another to put that principle into practice in the real world, where that ESI is stored in so many repositories and can represent terabytes of data.

SourceOne Kazeon:Is eDiscovery a horizontal application or are their specific verticals which eDiscovery is more prevalent?

Shook: It seems like the Pareto principle (the 80-20 rule) applies even in eDiscovery.  So regardless of industry, 80% of the ESI resides in systems that tend to be common across companies — email, laptops, desktops, fileshares, content management systems, archives, etc.  The last 20% is where the differences tend to occur.  For example, in the healthcare industry, a lot of data tends to be tied up in proprietary clinic and patient systems.  In manufacturing, data is in ERP systems.  Whether that data is simple or difficult to access depends upon those systems.  But regardless, that seems to be where most of the differences reside.

SourceOne Kazeon: What areas are most often overlooked in the eDiscovery process?

Shook: The top overlooked issue relates to the timing of conducting a litigation hold.  It seems to be very rare that companies are actually preserving data within a short period time after they should “reasonably anticipate” litigation — whether that preservation is through actually locking down the data or just sending a proper notification to custodians.  I think this is an issue that courts will start to scrutinize more in the near future.

Another issue is one that I’ve written about before, which relates to companies handling eDiscovery on what they have determined is a “best efforts” basis.  Certainly reasonableness is part of the process, and the proportionality principle (that eDiscovery efforts / cost should be proportionate to the “value” of a case) will apply to limit eDiscovery requirements.  But I often see companies going much further. For example:  deciding that only email really matters in the eDiscovery process, completely ignoring other systems; or companies that rely solely upon their custodians to preserve and collect information, with almost no instruction or oversight on how that process should be performed.

SourceOne Kazeon:It seems that the Chain of Custody for ESI is much less understood than it is for physical evidence.  How do you see case law developing in that area with the technology advancements in eDiscovery?

Shook: The issues around authenticity and admissibility are very difficult, mainly because the rules of evidence tend to be difficult to understand in practice.  Surprisingly, this is an area where I think many people are doing great work.  Many people are familiar with “chain of custody” from criminal cases — from TV, movies or even books.  Many people do not realize that this issue in a criminal case is much more stringent than in a civil case.  So as they strive to meet requirements that are far in excess of what they really need, they tend to do a good job.  Also, the automated systems (like our Source One eDiscovery – Kazeon) build much of this process into the system, which will quickly make this a non-issue.

SourceOne Kazeon: What are critical issues that Corporate Counsel should consider in choosing a eDiscovery strategy?

Shook: I worry about how we will review and analyze the incredible amounts and variety of data that we’ll have in the next few years.  The data volumes are so incredible that we must have — and permit in the legal context — automated systems to help us handle the review and categorization of the data. The top issue is to make an informed, risk-adjusted decision on strategy.  There is a lot of risk and expense in the eDiscovery process.  However, if your company has minimal litigation exposure, those costs may not be meaningful to you, and old-fashioned manual processes may work well.  But gather the data, get informed, and weigh your risks with your costs.

SourceOne Kazeon: What are judges saying about eDiscovery?

Shook: One of the important issues relates to the cost of eDiscovery, and how that is (and will) affect access to the judicial process and the ability to try a case.  This high-level issue tends to drive a lot of sub-issues, such as the need for hands-on case management, the call for more cooperation among counsel, and other issues such as different ways to handle privilege review. The Sedona Conference’s Cooperation Proclamation is one activity in this area that has a lot of momentum and interest from the judges.

eDiscovery StraightTalk by James D. Shook, Esq.

We hope you have found this issue of eDiscovery StraightTalk insightful.  If you have questions that you would like to have answered, please submit them via email at david@kazeon.com.