Randolph A. Kahn, Esq., Kahn Consulting	James D. Shook, Esq., EMC eDiscovery expert and Attorney

Date: Wednesday, July 14, 2010
Time: 10:00 AM Pacific

EMC is proud to bring you this special webinar focused on how you should think about handling eDiscovery in 2011. Our esteemed guest speaker, Randolph A. Kahn, Esq., is well known in the legal/compliance circles and brings a wealth of knowledge on eDiscovery.

He will be discussing current trends in eDiscovery that will dictate how you perform eDiscovery in 2011, risks associated with current practices/tools/processes and best practices to consider adopting in order to get ahead of your eDiscovery woes. Joining him in this discussion will be our in-house attorney, James D. Shook, Esq., who too brings tremendous eDiscovery knowledge to the event.

Register Today, as seating is limited for this premium webinar.

All attendees will be entered into our drawing for a new iPad.

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Gain autonomy and receive improved eDiscovery guidance

James D. Shook, Esq., CIPP EMC eDiscovery Expert

In today’s economic environment, companies deploying new technology have to show not just that they will be better and faster, but also just how much faster and better so that they can justify the expense.  Part of the buying process frequently involves gathering data on how much it costs to handle a business process in the current environment, how much can be saved with improvements, and establishing that the savings will justify the cost of the improvement (and frequently, how long it will take to do so).  Most companies refer to this process with the shorthand acronym of “ROI” or “return on investment”.  (In financial circles, ROI is actually a more complex analysis, but it’s still a good acronym for our purposes).

For companies that are looking to bring more of their eDiscovery process in-house, the ROI process can be difficult.  While we intuitively know that we can save money and cut risk with a leading eDiscovery solution, it can be tough to show that quantitatively because financial information is usually not readily available.  Even within the legal department, the cost of eDiscovery is frequently not well-known.  Often, time and money spent on eDiscovery issues is buried with other tasks in time entries from outside counsel; internal costs are generally not tracked at all; and payments to third-party processes are passed through (or marked up) by outside counsel and difficult to locate.

The benefits can also be difficult to calculate.  For example, many companies have poor eDiscovery processes (what we term “Faux eDiscovery“), where they wrongly or negligently ignore data sources and/or sound eDiscovery processes.  Faux eDiscovery can actually be very inexpensive — the real “cost” is in the risk with being caught and sanctioned.  But risk is difficult to quantify.  The result is that some companies trying to improve their eDiscovery processes may actually find a negative ROI (i.e. we only spend $10,000 per litigation now but it will cost us $50,000 to do it right) because they fail to identify or quantify the real ROI — their reduction in risk by handling eDiscovery properly.

If you are putting together an ROI analysis for bringing eDiscovery in-house, here are a few things to consider:

The general statistics available about eDiscovery costs are startling.  It’s well-established that having legal professionals review data – one of the later steps in the eDiscovery process — is expensive, with $18,750 per gigabyte a well-accepted number.  (Gartner, Reducing the Cost and Risk of EDiscovery in 2009, 1/9/2009 at 6).  Over the last several years, the average cost of discovery per case ranged from $621,880 to $2,993,567 (Litigation Cost Survey at 3).  And as noted earlier, Gartner advised an IT eDiscovery budget of $500,000 for a modestly sized case.    (Gartner, Reducing the Cost and Risk of EDiscovery, at 5).

Cutting through the noise, Gartner notes that many companies report a full return on their investment in an eDiscovery solution within 3 to 6 months — or within a single large case.  (Gartner, Marketscope for E-Discovery Software Product Vendors, 12/21/2009 at 2).  While these high-level facts alone may not be enough to convince anyone who requires a detailed ROI, they can help to set the stage for acceptance and also tend to strike a nerve with many C-level executives.

Undertake basic investigation on costs.  Talk to the legal department about how many “cases” they handle in each month (or year), being sure to include internal investigations and employment claims, regulatory inquiries and other matters where data is being preserved, collected and/or processed — not just “lawsuits”.  Ask them if they have information about amounts paid to outside service providers (perhaps through their law firm) for eDiscovery services.  Also check with the people who handle backups and email within the IT department — since different groups within legal may be asking them for help, they may actually have the best view of this work, and could even have hired an outside vendor to handle some eDiscovery-related work.  IT wil generally know whether the company has had to purchase tape processing equipment, additional storage or other non-standard equipment to help the lawyers with eDiscovery.

Check on soft-costs, too.  Most IT departments are only too ready and able to tell someone (anyone!) how much time they have devoted to eDiscovery tasks.  Frequently groups of 2-3 staffers can be assigned full-time or better for weeks or months on a medium or large case.  Without a chargeback model, legal might not even be aware of the massive undertaking to help them.

You may only be able to gather information on a few cases.  In that scenario, try to figure out whether it’s legitimate to extend the information out across the full volume of cases:  were these cases representative of what’s happening?  Do our cases tend to be similar or repeatable?  Do I have a good sampel?  When detailed information is not available — and usually it’s not — your goal is to get an understanding of the magnitude of the spend, and not necessarily the exact dollar amount.

There are a variety of ways in which you can begin to assess the savings that an eDiscovery solution will bring to the company.  In many cases, after purchasing a solution the incremental costs fo reach case will be almost nothing.  The better systems will enable custodian notification, search, preservation, collection and processing within the platform, so that investigators can efficiently handle these tasks.  This is really the purpose of the ROI analysis — case-by-case handling costs should be very small, because the expense is up-front in the purchase and deployment of the solution.

One area where the savings can be significant, but still substantial, is with “eyes-on” legal review.  An efficiently deployed system will help to minimize the amount of data collected, processed and eventually reviewed; but the review volumes can still be large.  And the hourly costs of review will be the same (although you can get some savings from de-duplication, clustering, email threading, etc.).  Still, we routinely see 50%+ savings in review based on the reduction in volume for efficient collection and culling.

You may decide that risk is too difficult or political to calculate as part of the ROI.  Or you may decide that it’s a necessary component that you must include.  Both approaches can be effective.

If you decide not to calculate a specific value for risk, you should still consider some risk analysis as part of your process, even as merely a “plus” factor to your overall analysis.  In doing this, take note of recent cases where companies have paid sanctions, had their case compromised and/or faced a backlash in the press (and potentially from shareholders).  You may not have a value for that risk, but the message will resonate with management.

If you do calculate risk, consider a conservative approach and factor in the probability of a sanction.  For example, you might decide that a severe sanction would compromise your ability to effectively defend (or prosecute) a case, and a larger case can be worth $5,000,000.  If you estimate a 10% chance of being sanctioned, you could take the resulting product ($5,000,000 x 10% = $500,000) as a basis for your risk value.  Remember that this risk amount would apply to each such case; so while the risk amount for a sanction on a smaller case might seem low (let’s say $20,000), it would be applied over a far larger number of cases.  It adds up!

Also remember that sanctions costs can exceed the entire estimated value of a case.  There have been many cases where shoddy eDiscovery processes have resulted in expensive remediation efforts — legal fees in determining what went wrong and how to fix it (and fending off motions for sanctions), repeating earlier work or being forced to use extraordinary efforts such as tape restoration.  So even a $500,000 case with eDiscovery problems could easily require more than the case value to try to “fix”.  (And don’t let anyone argue that you could always just write a check to settle the case.  Opposing counsel may have valued the case at a higher value than you, and once they realize that you are in trouble, it could be tough to negotiate a fair settlement).

Sometimes a simple model is better.  We have used extremely complex ROI models that were spot-on, but difficult to explain, and ultimately were ignored. We have also seen very simple models — “an eDiscovery solution will save us 50% in review costs, and last year review costs were $5M” — that have carried the day.  Hopefully, as you work on your ROI project, you’ll uncover the method that will best establish your case.  Until then, consider using a scenario-based approach (small case, medium case, large case), develop your facts for each one, and extrapolate the costs across the volumes that you expect to see each year.

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J. David Morris, EMC SourceOne eDiscovery - Kazeon

The SourceOne eDiscovery – Kazeon and SourceOne File Management pods were high profile attractions this year. eDiscovery demonstrations ran nonstop, as IT and Legal professionals crowded the booth to see the new features and functionality of the Kazeon suite and its integration with EMC’s Documentum, Celerra, and Data Domain products. The Kazeon File Management pod was a consistent hit throughout the show with attendees staying up to an hour after the show floor closed to see demonstrations and ask questions. The power which the Kazeon eDiscovery and File Management tool suite delivers, astounded IT and Legal professionals alike.

The file visibility, classification, migration, remediation, reconciliation, extraction, policy creation and enforcement, file retraction and deduplication capabilities comprise the first complete tool suite of its kind which allows IT managers the ability to optimize their storage assets, as well as deliver auditable governance and compliance capabilities. Legal professionals also realized the importance of Kazeon’s File Management impact on eDiscovery, as it delivers the tools corporate IT professionals need to deploy and enforce Information Management policies to provide an auditable chain of custody and defensible compliance and governance processes. Attorneys and paralegals found the new streamlined eDiscovery case management and workflow user interface enhancements delivered significant time savings.

“The capabilities of Kazeon File Management and Kazeon eDiscovery dovetails with George Socha, Esq., and the Electronic Discovery Reference Model (EDRM) group’s new project on information management. The Information Management Reference Model (IMRM) expands the information management segment of the EDRM to include multiple stakeholders, information value and processes,” says Karthik Kannan, Sr. Director of EMC eDiscovery. “The IMRM delivers the conceptual framework for IT, Legal and Business stakeholders to discuss information management and eDiscovery to optimize and balance regulatory obligations against business needs. The knowledge gained by participating in both the EDRM and IMRM working groups has proven instrumental in EMC SourceOne eDiscovery – Kazeon product development and improvements. “

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To Register – Click DISCOVER - Wednesday, March 3, 2010 10am PT

The authors of “eDiscovery for Dummies” join EMC SourceOne eDiscovery – Kazeon to discuss “Making Your Company Bullet-Proof“:

• The sources of the highest costs of e-discovery
• Which overlooked issues can cost you the case
• How to prepare for a swift and strong response to litigation
• 3 R’s of e-discovery: reasonableness, readiness, and ROI
• How to reduce the charged environment between legal, HR, and IT

About the Authors:
Dr. Linda Volonino (PhD, MBA, CISSP, ACFE) is an author, lecturer, computer forensic authority, eDiscovery specialist and expert witness. More

Ian Redpath (JD, LLM) is an author, lecturer, eDiscovery expert, practicing attorney and former prosecutor. More

“Dr. Linda Volonino and Ian Redpath, Esq.,  have compiled a comprehensive text on eDiscovery which allows an eDiscovery novice to get up to speed quickly and which serves as a reference for Advanced eDiscovery professionals. The text is written for both the Legal and IT professional and  it does a great job bridging the legal/IT knowledge gap. ” says J. David Morris – EMC SourceOne eDiscovery – Kazeon.

The big news….In-House eDiscovery.  Although several vendors like EMC have been championing In-House eDiscovery for several years, this year is when In-House eDiscovery has come into its own.  Why?  Well, there are numerous reasons…but let’s say it is at the tipping point.


In-House eDiscovery is being touted by every company at LegalTech.  The question customer should ask is “With all the sanctions and fines leveled by Judges in eDiscovery cases, can your company provide the support to deploy eDiscovery, manage the complexity of  integrating into our data centers and provide process and legal best practices to support us before, during and potentially after ligation?”  If the answer to this question is anything less than an “unequivocal YES”….then customers must think again about their provider.

Tomorrow is likely to be even a more chaotic day, as the West Coasters will be arriving today.  EMC start tomorrow with a day of Super Sessions which have been the talk of the conference today….see our super session flyer below.

Download the Super Session Flyer

EMC SourceOne eDiscovery – Kazeon announces insightful super session “eDiscovery War Stories: The Dirty Truth from the eDiscovery Trenches” with noted guest Steven W. Teppler, Esq., EdelsonMcGuire, LLC and Author of “Digital Evidence LifeCycle Management – A Guide for Enterprise, Attorneys, and Technologists”, Matthew Nelson, Esq., Legal Consultant in EMC’s Global eDiscovery and Compliance practice Jeff Seymour, Deloitte eDiscovery, and moderated by James D. Shook, Esq., CIPP, recognized authority and author on legal discovery and compliance law and EMC eDiscovery expert.


“The eDiscovery War Stories panel will discuss early life-cycle as well as discovery-centric evidentiary missteps, how they might be avoided, and what challenges and opportunities await those seeking ESI authentication and admissibility in 21st Century litigation,” says Steven W. Teppler, Esq.

“The session “eDiscovery War Stories” highlights the challenges, issues and best practices the esteemed panelists have experienced throughout their careers in eDiscovery,” says J. David Morris EMC SourceOne eDiscovery – Kazeon. “Gaining valuable firsthand knowledge and guidance from the eDiscovery trenches is an opportunity not to be missed while at LegalTech New York.”

Click Here for the LegalTech Super Session Flyer

Joining Mr. Frazier are noted experts in eDiscovery including David Shonka, Deputy General Counsel and eDiscovery Chair of the Federal Trade Commission (FTC), Greg Buckles, eDiscovery expert and William E. O’Neil, Esq., corporate governance and EMC eDiscovery expert. Moderating the session discussion is the articulate speaker, author and legal career advisor, Ari Kaplan, Esq.



“eDiscovery has matured over the last twenty-four months since I wrote Bringing eDiscovery In-House,” says Jake Frazier, MBA, Esq. “With the number sanctions and fines levied by judges due to eDiscovery missteps, corporations realize that eDiscovery is very serious business. They have also realized the eDiscovery is only the tip of the Information Governance iceberg.  We are going to discuss the necessity of Bringing eDiscovery and Information Governance In-House in to deliver corporate counsel the autonomy they need over their eDiscovery process.”

“eDiscovery and Information Governance are company-wide initiatives that touch every part of a business twenty-four hours a day and seven days a week,” says William D. O’Neil, Esq. of EMC’s eDiscovery and compliance practice.  “With the importance of these initiatives, corporations are looking to established companies to partner with to holistically solve the infrastructure, legal, policy development and management complexities of eDiscovery and Information Governance. With Ari’s tenacity, I sure we will have a lively discussion around the subject at LegalTech and deliver the attendees excellent guidance on eDiscovery.”

Click Here for the LegalTech Super Session Flyer

Heidi Maher, Esq. eDiscovery Expert

A party need not provide discovery of electronically stored information from sources that the party identifies as no reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible due to undue burden or cost. If that showing is made, that court may nonetheless order discovery from such sources if the requesting party shows good cause.

The Standing Committee report notes to Rule 26(b)(2) give examples of not reasonably accessible data. The notes put “data that was ‘deleted’ but remains in fragmented form requiring a modern version of forensics to restore and retrieve” in the same category as disaster recovery backup tapes and legacy data from obsolete systems.  The notes state “parties sophisticated in electronic discovery first look in the reasonably accessible places that are likely to produce responsive information” and “in many cases, discovery obtained from accessible sources will be sufficient to meet the needs of the case.”

In other words, if the corporation does not have a tool that collects deleted or slack space data as a matter of course for every civil matter, it may have a more powerful argument that to be forced to do so is unduly burdensome.  This then shifts the burden on the requesting party to show “good cause” which many are unable to do:

“Courts have been cautious in requiring the mirror imaging of computers where the request is extremely broad in nature and the connection between the computers and the claims in the lawsuit are unduly vague or unsubstantiated in nature.” Balboa Threadworks, 2006 U.S. Dist. LEXIS 29265, 2006 WL 763668, at *3. For example, a party may not inspect the physical hard drives of a computer merely because the party wants to search for additional documents responsive to the party’s document requests. See, e.g., McCurdy Group v. Am. Biomedical Group, Inc., 9 Fed. Appx. 822, 831 (10th Cir. 2001) (holding that skepticism concerning whether a party has produced all responsive, non-privileged documents from certain hard drives is an insufficient reason standing alone to warrant production of the hard drives).   However, discrepancies or inconsistencies in the responding party’s discovery responses may justify a party’s request to allow an expert to create and examine a mirror image of a hard drive. See Simon Prop. GroupL.P. v. MySimon, Inc., 194 F.R.D. 639, 641 (S.D. Ind.2000) (allowing plaintiff to mirror image defendant’s computers where there were “troubling discrepancies with respect to defendant’s document production”) and Peskoff v. Fabor, 244 F.R.D. 54 (D.D.C. 2007) (after a careful balancing test, the court ordered forensic imaging of hard drives due to “significant and unexplained gaps in what was produced”).

These cases seem to support the notion that forensic collection is only necessary in extenuating circumstances (allegations of bad faith, illegal activity, etc.).  Even in those circumstances, there could still be an argument made in favor of cost shifting.

Of course, every case is different.  That’s why the Sedona Conference felt the need to publish a commentary on “Preservation, Management and Identification of Sources of Information that are not Reasonably Accessible” (8/2008). Free download:HERE. In it, they recommend early agreement on contentious preservation issues.  However, as most litigators know, that rarely happens.  So for those cases, they have put together a useful decision tree.   In addition they have listed many cases that showcase the need for a requesting party to provide additional proof in order to force searching of inaccessible data by the responding party.

Many in-house counsel counter with “I know I don’t have to do it but I’d rather be safe than sorry”.  Unfortunately, what they may not realize is that a corporation is only as clean as its employees.  Imagine that a corporation submitted to this theory and routinely collected deleted and slack space data in response to all electronic discovery requests in civil litigation.  However in one matter, evidence of other unrelated criminal or sanctionable activity is revealed (ie. child pornography, IP theft, intentional deletion of relevant data).  That corporation may then be obligated to reveal this information to law enforcement authorities, the court, and/or opposing counsel even when this information was never requested in the first place.

Heidi Maher, Esq., EMC SourceOne eDiscovery – Kazeon

See us at LegalTech at booth 1380 and attend our Super Sessions with free CLE credit.

“EMC to Sponsor All-Star eDiscovery Sessions at LegalTech New York 2010“

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.

• The Ten eDiscovery Commandments: The Judges Speak – The Honorable Andrew J. Peck and  The Honorable Frank Maas and moderated by Andrew M. Cohen, Esq., Vice President & General Manager of eDiscovery and Compliance Solutions and Associate General Counsel for EMC

• Authenticity and Admissibility: Enterprise ESI Management, Information Governance and the Chain of Custody challenge - David Shonka, Esq., Deputy General Counsel, FTC; Steven W. Teppler, Esq., EdelsonMcGuire, LLC and Author of “Digital Evidence LifeCycle Management – A Guide for Enterprise, Attorneys, and Technologists”; Anthony J. Diana, Esq., Mayer Brown LLP, James D. Shook, Esq., EMC eDiscovery expert with panel moderated by William D. O’Neil, Esq. Corporate Governance and Compliance Specialists and eDiscovery Expert.

• “eDiscovery for Dummies” – The New Book – Dr. Linda Volonino and Ian Redpath, Esq. co-authors and moderated by Jake Frazier, MBA, Esq., Sr. Director SourceOne eDiscovery – Kazeon and author of “Bringing eDiscovery In-House for Dummies”

• The Future of eDiscovery: Emerging Trends in Law and Technology and How it will Change Your Business – Andrew M. Cohen, Esq., Vice President & General Manager of eDiscovery and Compliance Solutions and Associate General Counsel for EMC; George Socha, Esq., Co-Creator of the EDRM Model; Greg Buckles, Independent eDiscovery Consultant; Farrah Pepper, Esq., Founder and Chairperson for Gibson, Dunn & Crutcher’s Electronic Data Discovery Initiative and Global Task Force and moderated by Jake Frazier, MBA, Esq., Sr. Director SourceOne eDiscovery – Kazeon and author of “Bringing eDiscovery In-House for Dummies” with special guest Robert D. Owen, Esq., Partner – Fulbright & Jaworski LLP

• eDiscovery War Stories: The Dirty Truth from the eDiscovery Trenches - Charles S. Biener, Esq., Vice President and Senior Litigation Counsel CIT Group Inc.; Steven W. Teppler, Esq., EdelsonMcGuire, LLC and Author of “Digital Evidence LifeCycle Management – A Guide for Enterprise, Attorneys, and Technologists” Jeff Seymour, Principal in Deloitte Financial Advisory Services LLP, Northeast leader of its Analytic & Forensic Technology practice and moderated by James D. Shook, Esq., CIPP, recognized authority and author on legal discovery and compliance law.

• Bringing eDiscovery In-House: In-sourcing, Outsourcing and eDiscovery Zen – David Shonka, Esq., Deputy General Counsel, FTC and Jake Frazier, MBA, Esq.; Greg Buckles, Independent eDiscovery Consultant; William D. O’Neil, Esq., Corporate Governance and Compliance Specialists and eDiscovery Expert and moderated by Ari Kaplan, Esq., is principal of Ari Kaplan Advisors, which provides law-related ghostwriting and industry research services, and also trains legal professionals on publishing, communications, business development and networking.  He is the author of The Opportunity Maker: Strategies for Inspiring your Legal Career Through Creative Networking and Business Development (Thomson-West, 2008).

• Internal Investigations: The Scoop on Employment Suits and Risk Management - Alitia Faccone, Esq., Partner – McCarter & English and Financial Services Litigation & eDiscovery Specialists; Heidi Maher, Esq., Employment Law Specialists and eDiscovery Expert; Gina Trimarco, Esq., Associate with McCarter & English Employment Law Specialists and eDiscovery Expert  and moderated by Matthew Nelson, Esq., Legal Consultant in EMC’s Global eDiscovery & Compliance practice.

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