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Archive for the ‘eDiscovery’ Category

Companies seeking to deploy electronic discovery (eDiscovery) solutions could benefit substantially by gaining visibility into the cost associated with the life of an email message–from an individual’s machine to the courthouse. This visibility into the cost can provide companies with concrete dollar values to quantify the specific value proposition respective to deploying eDiscovery technologies that address e-mail discovery, of course an organization can expand this calculation beyond email.

Recently, I presented at a CIO Round Table, hosted by Comport Consulting (http://www.comport.com). It was evident that enterprises have minimal visibility into the discovery legal-technology cost structure. No one in the attendee group was able to provide actual dollar costs of email from birth to trial. I wager that this is not unique.

Many vendors claim that their solution delivers substantial savings but, I think that the complexity of the people, process and technologies each company deploys makes these saving projections circumspect. Some vendors offer rudimentary cost assessments at no charge, but generally the models they deploy are simplistic. Arguably, these free assessments dilute the value of the complex mathematical models that calculate discovery cost metrics.

Organizations that acquire visibility into the cradle to court cost breakdown arm themselves with invaluable data with which they can measure the effectiveness and cost-benefit of technologies, which can then be used to assist IT, legal and business stakeholders to ascertain the business value of investment in technologies that support their internal eDiscovery.

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In the realm of electronic discovery, technology teams often confront resource gaps that exacerbate the discovery issues that legal teams are confronting. The right toolset, one that proactively prepares the enterprise for discovery, can benefit both the legal and technology teams on several fronts, so the investment delivers value across the enterprise.

One benefit of deploying a proactive eDiscovery solution, one that provides legal easy access to the documents and data they need, is that it can remove the high dependency of the legal team on the IT department. This decoupling helps IT avoid being at the beck and call of the legal team. And the legal team is able to avoid spending valuable hours (theirs and ITs) trying to get access to the data they need. Another important benefit of tools that proactively manage a company’s data–to the extent that they know what they have and where it is–is that it can assist lawyers with the increasingly complicated keyword paradigm. Let’s be honest, a lawyer’s enthusiasm about and/or knowledge of math, statistics, algorithms, linguistics, or technology has its limits, so the right tool can assist them substantially and provide additional assurance that corporate information is being accounted for when engaged in discovery.

Another key benefit of proactive ediscovery, for some companies, is substantial cost savings. While there exists a great deal of marketing literature around the cost savings, this is one of those cases when there can be substantial value in managing data in documents, email, PDF files, etc so that you can bring discovery in-house. Obviously, each company needs to quantify the tangible and intangible cost savings realized from the deployment of an internally-deployed or externally-managed data management and discovery solution, but it is likely worth the time and effort if it has the potential to dramatically reduce eDiscovery costs. Specifically, a company should be able to quantify the cost benefits tied to performing e-discovery internally (e.g., search, preserve, produce, and etc.). When computing this value it is important to be mindful that whenever you need something quickly, at a specific time and location, it tends to be more costly– litigation driven e-discovery certainly fits that bill. Proactive eDiscovery can eliminate some of the last minute rush, because getting your hands on relevant case data is easier when you already know what you have and where it is. The right tools can also increase legal and technology efficiency and productivity.

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Many people pontificate on keywords and search technologies and the need to grasp the fundamentals of how they operate. Others discuss cost savings or the destructive effect eDiscovery is having on corporate America. All of these present valid and key concepts to be discussed, but underlying all of them exists a larger issue: Communication. Most problems that arise from the electronic discovery abyss derive from poor communication.

To ensure that preservation is executed within an organization, it is imperative that key legal and litigation support stakeholders communicate with internal technology teams. This is especially true when it comes to the initial deployment of preservation-driven technology. Once installed, technology teams need to both train and communicate with the litigation support individuals so they know how to execute a preservation hold.

In the preservation arena, an effective solution will empower lawyers to be self-sufficient–without having to rely on technologists each and every time they seek to execute a court order preservation hold. Due to recession, most companies simply do not have sufficient assets to build their own in-house solution. However, the companies that do successfully empower the lawyers can realize substantial cost savings. The potential savings of empowering lawyers, by providing the correct technology tools for them to execute legal hold, saves companies people-hours, service fees as well as eliminating error.

The elimination of human communication errors may represent the largest savings. A slew of case law suggests that the execution of preservation is critical. For example:

Anadarko Petroleum Corp. v. Davis, 2006 U.S. Dist. LEXIS 93594 (S.D. Tex. Dec. 28, 2006); http://www.ca10.uscourts.gov/conference/downloads/ediscovery7.pdf

Best Buy Stores, L.P. v. Developers Diversified Realty Corp., 247 F.R.D. 567 (D.Minn. 2007); http://www.ca10.uscourts.gov/conference/downloads/ediscovery7.pdf

In re Intel Corp. Microprocessor Antitrust Litig., 2008 WL 2310288 (D. Del. June 4, 2008) http://www.ca10.uscourts.gov/conference/downloads/ediscovery7.pdf

Johnson v. Big Lots Stores, Inc., 2008 WL 2191357 (E.D. La. May 7, 2008) http://www.ca10.uscourts.gov/conference/downloads/ediscovery7.pdf

While these cases vary, in terms of outcome, regarding whether or not litigants execute preservation orders to the extent set-forth by the courts. The collective outcomes demonstrate the importance of being able to execute a defensible preservation order.

While the manual and laborious process of preservation sounds like a great way for one to spend weekends. It still leaves a company open to sizable human risk error. It might make sense for companies to consider empowering the lawyers to execute preservation holds. In other words, let the lawyers be lawyers and let the technologists be technologists.

In my experience, most preservation issues can be avoided if enterprise systems are configured so that lawyers can seamlessly implement a preservation hold and not have to use the technology 911 pager to effectuate a preservation order.

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According to industry analysts, a company with more than 10 legal matters a year should evaluate the acquisition of an electronic discovery solution. Besides the potential financial savings, a company can achieve the peace of mind of controlling their own data.

A dollar saved is a dollar earned. The costs of third-party technical and legal experts add up and the potential impact to the business is sizable, with the sky being the limit. See Sean M. McNee, Productivity as a metric for visual analytics: reflections on e-discovery. It is important to realize that the costs of getting, saving, searching and producing vary respective to the number of documents at issue. See J DeBono. Preventing And Reducing Costs And Burdens Associated With E-Discovery: The 2006 Amendments To The Federal Rules Of Civil Procedure, 59 Mercer Law Review 963 (Spring 2008). This means that if a company implements a solution in-house, one that synchronizes the document retention schedules with the systems, achieving control of the information that is stored and archived, the costs can fall as far as the number of documents retained.

Buying and executing an in-house solution is not always a simple feat. It requires collaboration and energy from the legal, technology, and business stakeholders to be successful. However, buying it certainly gives a company substantially more control over the costs associated with responding to a regulatory investigation, judicial case, or any document intensive production process.

While it is important not to discount the utility of outsourced solutions, when the proverbial fact pattern of the case requires, such solutions can be costly and result in a dependency on the vendor and a relinquishment of control over information and legal-business autonomy for an organization. Of course, bringing eDiscovery in-house requires an investment, but looking past a single quarter of earnings, an in-house solution can provide organizations with substantial tangible benefits year-after-year.

Renting a house is simply not as cost effective as buying it (discussing the tax benefits of buying a house v. renting are beyond the scope o this discussion). The technology benefits realized by buying instead of renting eDiscovery solutions vary by company. The benefits might include reduction in storage costs and/or better implementation of strategic storage initiatives; increase in data security; better responsiveness to requests for electronic information and possibly even happier workers. The savings, while difficult to quantify in a general way, can range from the thousands to the millions annually.

I welcome any comments or additional discussion or points around this benefit v. burden of buying a solution and brining the functionality in-house.

One other key point is how often do you obtain a great deal when the seller knows the buyer has a pressing timeline? When you have the functionality in-house, the costs around the eDiscovery process are certainly more predictable. For example, a company that does not have an in-house solution might find itself paying a substantial premium because the supply of competent document review companies cannot meet the demand, skewing the price curve for the point in time. A company that has an in-house solution can predictably control the costs and scale up and down as appropriate without paying substantial premiums. A services vendor who has already made commitments to other customers is in no position to cut you a better pricewhen you’re under tight time constraints

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January is always a time for reflecting back on the previous year, but picking the judicial top cases for electronic discovery is a complex and perhaps insurmountable task.

My key picks for 2008 are just a small sampling–the very tip of a giant legal-case iceberg. It would be great to hear your thoughts on the cases and on my views:

  • Common Sense and respect for the courts and opposing counsel
    Qualcomm Inc. v. Broadcomm , a case that lays out why counsel must apply common sense when responding to an e-discovery order and be mindful that a court does not consider digital incompetency a defense. Qualcomm dispute was around patent issues the discovery issues came about when Qualcomm had the audacity to both lie and hide 21 emails, as well as over 46,000 emails with attachments, totaling 20,000 plus pages of relevant evidence–legal term for relevant information. The key lesson here is simple: do not lie and hide stuff and if you do and get caught, get ready to be punished.While the elegance of the adversarial litigation system certainly does not require litigants to hold hands and sing songs around a camp fire, the other extreme of stealing a million dollars to test the security measures of bank is simply not a tenable position for a company.
  • Hiding It Will Cost You Plenty & They Will Find It
    The Qualcomm case provides tons of fodder for this critical piece of information. The electronic age leaves copies everywhere and anywhere, making 100% elimination of any traces of information being created, sent, or received a challenge. Investigators with the right tools can pick from a basket of sources, such as sender or recipients personal machine, external storage devices, company or third party servers, internal or external databases and etc.The best course of action is for a company’s legal and technology team to be transparent in their execution of preservation order and/or delivery of an enterprise records management solution. Judge Grimm in Mancia v. Mayflower Textile Services Co., Civ. No. 1:08-CV-00273-CCB (D. Md. October 15, 2008 ) lays out why playing ‘hide the information’ and not playing nice in the sandbox is bad for your client and more importantly the other side eventually found the information. Companies should collaborate with one another to define process and, more important, make sure that the document retention schedules and litigation holds that exist on paper are executed operationally.
  • Finding It Requires A Bit More than Just Common Sense
    Victor Stanley Inc. v. Creative Pipe, a copyright infringement case where the relevance to electronic discovery is that keywords can be a game changer. Judge Grimm in Victor Stanley provides some great ESI 101 concepts that litigators and attorneys as a whole should have some operational knowledge of in some form. In Victor, the defendants relinquished their attorney-client and work product privileges to 165 ESI files because they screwed electronic search and review in the production dance. Judge Grimm’s opinion certainly implies that lawyers utilizing keyword searches alone are in for a big shock. Lawyers, I suggest you reach out to your technologists and collaborate on search strategy.
    In 2009, it is critical that lawyers and technologists realize that finding information in an enterprise requires more than just some well crafted key words and requires a comprehensive strategy.

The onslaught that is sure to come–companies large and small are going to be under legal siege in 2009. Whether it is white collar crime, bankruptcy or wrongful termination, we’ll see surges maybe even a Tsunami of new lawsuits. The current mentality “if you build it they will sue” is sure to provide fodder and, dare I say, job security for a great many of my legal and technology peers.

The concept of preparation, while foreign to many companies, is critical to initiate because of many possible benefits: saving money, reducing negative press, avoiding a drop in share price, meeting compliance requirements and better legal outcomes. This concept of preparation is analogous to the idea of not lending money to people who cannot pay it back. Just as failure to follow this seemingly simple construct has placed many people and companies in an untenable position, failure to prepare for electronic discovery will find many marquis companies in a high-risk, business –damaging position, or worse.

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The onset of electronic discovery was predictable and logical, but its effect on business has been disruptive and confusing. Fortunately, electronic discovery (eDiscovery) technologies have been evolving quickly, arguably quicker than the courts in some cases.

The discussions set forth in this blog intend to focus on the gamut of where business, law, and technology intersect. While I was studying for my Masters in Computer Science a professor imparted a key piece of knowledge, theory is distinctly different from practice. This wisdom served me well as I embarked down the technology road. Ironically, as I was being admitted to the New York Bar, a Judge shared the very same words, and again they were on-point. At this writing, the divide between technology and the law is still substantial, but when it comes to the reality gap between theory and practice, they are very much the same. And electronic discovery may be the perfect example.

Through this blog, I will share nuggets of practical information not available in the text books or in the CLE’s and encourage discussion of legal strategies and corollary technologies from the technology and legal camps. The point is not to force agreement on complicated legal or technology matters, but to share perspectives and learn from one another.

Just as it is not the job of the technologist to prepare themselves for a 30(b)(6) deposition a lawyer should not be expected to know the answers to the technology pieces. Collaboration between counsel and technology teams is really the most constructive way to answer these questions and address electronic discovery issues.

In the coming weeks, I’ll cover subjects such as eDiscovery , mergers and acquisitions, lessons learned from past eDiscovery cases and white collar criminal electronic discovery. I’d also like your feedback on subjects or issues you would like to me to cover.

I look forward to getting the conversation started.

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I’m a senior consultant and founder for the INI Group and am working very closely with Digital Reef as a consultant, advisor and blogger. I’ve been in the high tech industry for over 23 years with a focus on the data management and storage arena and you can find out more about me at www.contemplatingIT.com. I believe Digital Reef has brought to the table an extremely impressive solution at a critical time when our unstructured data content is growing to massive levels.

In addition to being and advisor and consultant for Digital Reef – I’m going to be blogging for them on a regular basis discussing a wide range of topic areas from business issues, compelling technology, market dynamics and visions going forward.

Who and what is Digital Reef? They are a startup – an emerging vendor – that came to right conclusion that Enterprise search is woefully inadequate on multiple levels – the mechanics of making it work efficiently and intelligently in environments with massive amounts of content; and the ability to get relevant data to the user rapidly and without drowning them with irrelevant results.

I describe the Digital Reef solution as a data and content management platform leveraging intelligent and scalable search and indexing technologies. Digital Reef provides appliances with a grid architecture that ingests and indexes massive amounts of content spread across heterogeneous storage throughout the Enterprise creating a global federated index. Some of the biggest challenges with indexing include scalability, transparency and true global federation – and Digital Reef solves all three.

Once you have all of your unstructured data indexed – what are you going to do with it? Another big challenge with management of unstructured data is making order out of chaos. If you just use keyword searches there will be a large number of irrelevant returns that obscure what you really need.

The problem with keywords is that there is very little useful context. Digital Reef’s magic ingredient is its similarity engine – the ability to analyze content including documents, email threads and terms and return to you results based on a user defined similarity ratio. Digital Reef’s similarity engine is sophisticated technology that not only uses keywords but the associations of terms and the context in which they are used within unstructured data – providing relevant results.

Companies are frustrated because information is really three dimensional but we are using two dimensional tools to access and manage them. The first step is to implement solutions that provide us rapid access to relevant data for reactive purposes such as a discovery process, audits, research, customer support, projects, etc. However, think of the potential of really using information to also build revenue generating products and services leveraging existing intellectual property. The potential is compelling and landscape changing.

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