Expert Opinion

Future View

Realities of E-Discovery – The New World Order - Impact on Discovery and Records Management
By: Michael Prounis & Myron Eagle, Co-Founders, Evidence Exchange

As the 2006 amendments take hold, the practice of law has forever changed and a lawyer’s plea of “not knowing much about technology” won’t immunize her or her client against embarrassment and/or the threat of discovery sanctions. Welcome to the New World Order!

Key Trends On The Horizon

1) Extremely well-managed E-Discovery Rule Making Process has fostered widespread adoption of Amended Rules and suggests simplicity of process that, upon closer inspection, really doesn’t yet exist.

2) Less confrontation, more cooperation in resolving Meet & Confer E-Discovery type issues.

3) Ever-increasing data volumes, despite Records Management Programs and Rapid Response E-Discovery Units.

4) Preservation is a huge risk management issue for Corporations, particularly those with large quantities of legacy data from acquisitions.

5) Precision is a key requirement in terms of exchange formats, processing quality, data collection, metadata extraction and chain of custody documentation.

6) Yet, far less time is available to make E-Discovery decisions. The E-Discovery strategy game is largely over by the Meet & Confer.

General Observations

We write at a time of great transition. The volume of electronic data is overwhelming the powerful systems that attempt to manage it. The rule amendments have been implemented and in the background, there has been major change in terms of practice considerations and case strategy. While much has been covered by the New E-Discovery Rules, many issues remain untested, unexplored or unresolved.

The new demands placed on litigants with respect to the preservation of Electronically Stored Information (ESI) are bound to be the subject of much debate. Preservation is no longer a voluntary or passive activity and there is general recognition that proactive steps must be taken immediately or evidence will be destroyed. Failure to preserve electronic documents will lead to more corporate meltdowns and new Electronic Discovery abuses! However, recognizing that most ESI must be altered / manipulated as part of normal processing, chain of custody is an extremely important, yet tricky consideration.

Too few companies have a sufficient handle over the Electronic Records Management and Retention process to avoid being accused of spoliation, ordinary negligence and/or the unnecessary delay of production (i.e., purposeful sluggishness). Only the most experienced corporations and law firms have imposed practice standards on how Electronic Discovery is to be performed.

The New World Order is largely insensitive to data volumes and processing complexities. Today, the volume of data encountered on even a small to medium sized case can be mind numbing. The big disputes can generate billions of pages. However, the general attitude reflected in the new Amended Rules is if you manufactured the data, you now need to manage it. So, the key goal of the Meet & Confer, at least from the defendant’s viewpoint, is to try to manage the size and scope of discovery. Can you pursue a two-tiered approach, one for accessible and one for inaccessible data? Can you restrict your search by date range, key custodians, locations and type of restoration, keyword, and extension?

What is the likely impact of de-duping, filtering and searching on volume? What is the least expensive way to review potentially responsive data? How should data be produced? What form of production – native, searchable proxy & metadata, or some other negotiated format? What metadata was or will be provided? How should encrypted and infected files be handled? What about system / auto dates? Who are the key record custodians? Are there any arrangements that need to be put in place with respect to belated assertions of privilege?

The answers to the above questions will determine whether you require a small, medium or super-sized budget to implement an agreed to protocol and to comply with your on-going discovery obligations. You need to have most of these answers available to you, certainly before the Meet & Confer. If you don’t have help internally, hire a consultant or boutique E-Discovery firm.

The New World Order is fairly well defined. Mastering the Amendments and related case law is the necessary first step. Most of the issues have been on the radar screen for years now, so the learning curve is manageable. Equally important, is really getting to know your client’s IT environment and Records Management Program. As soon as the potentially relevant data on your case is preserved, it is important to begin assembling volume estimates by custodian and date range. All of these things will help you determine how long it will take to process the potentially responsive data and whether any of the data is inaccessible and possibly a candidate for cost-shifting / sharing.

The New World Order is quite precise. Given that, it is always best to exchange a test production sample with your opponent and co-counsel early and know that the data only has to be processed once. Decisions made early on issues such as hold orders, data collection techniques, data preservation live with you throughout the case, so they should be memorialized in some fashion with all parties, including the Court. This is even more important when dealing with computer forensics, where you need to preserve, recover, search, review or produce deleted files, file fragments or hidden data!

The New World Order is super time compressed. What used to take months to occur is now happening in the first few weeks of a matter. All of the key E-Discovery battles occur early in the process and you live with those decisions for the rest of the game. Now, you must now know early in the process a great deal about your active electronic documents, various back-ups, records management policies, E-Discovery practices and key legal arguments concerning preservation, privilege, accessibility, safe harbor candidates and preferred forms of production. In fact, you will pretty much need to have that all figured out before your Meet & Confer. Otherwise, you will be unprepared or worse, appear to be an obstructionist and/or uncooperative. Today, the penalties for obstruction and negligent data loss are always worse than the penalties considered for the original dispute or issue in question.

Too often, those penalties are imposed because of sloppy work and / or self-inflicted wounds. Until you come up the learning curve, get the help you and your clients need to stay out of trouble. Some day soon, Electronic Data Discovery will be so commonplace that standard professional practices will exist and new technologies will simplify task that are now considered complex. Until that time comes, however, The New World Order will be quite unforgiving and unpredictable for all newcomers. Proceed with caution as we embrace the future optimistically.

About The Authors
Michael Prounis and Myron Eagle are Co-Founders of Evidence Exchange, a New York based E-Discovery solutions provider. They have worked together in the legal systems technology sector since 1982 and full-time in E-Discovery since 1995 for companies such as Arthur Andersen & Co. S.C and Prounis Consulting Group, Inc. In June of 1999, they developed Evidence Exchange’s Secure Digital Photocopier (“SDP”). The SDP is the first patented digital discovery and production methodology that streamlines and secures the electronic discovery process by emphasizing source document preservation, archive control, digital evidence authentication and detailed chain of custody documentation. Mr. Prounis and Mr. Eagle are located at 21 Penn Plaza, NY, NY 10001 and can be reached at (212) 594-2500 or at www.evidenceexchange.com.

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