Controlling the Cost of E-Discovery Through Preparation and an Organized Response
The sending of a "preservation" letter is rapidly becoming the norm in litigation today. The typical preservation letter demands that your client sequester its entire computer network and each employee’s PC at Fort Knox, pending the final resolution of either anticipated or currently pending litigation. Such tactics are clearly designed to raise the cost of litigation while at the same time positioning your opponent to seek a spoliation instruction as well as any other sanction that the presiding court may order against either the client or the attorney in charge. However, the lesson learned from such missives is that reasonable preparation long before litigation is even a glimmer in a potential plaintiff’s eye can result in cost savings in responding to an electronic discovery ("e-discovery") request.
Getting Control of the Information
Business operations in the digital age generally involve the use of a combination of data storage media, including mainframes, servers, personal computers, and portable storage media (e.g., tapes, CDs, floppy disks, USB drives, etc.). Consequently, when a business is faced with an e-discovery request, the maze of electronic "cubbyholes" through which it must search for data can be downright nightmarish. The time and resources required to perform such a search can be exorbitant.
Fortunately, however, advance preparations can help significantly control the cost of e-discovery. It is prudent for an organization to have in place a written document management policy that applies to both paper and electronic information. Such a document management policy should serve the business needs of the organization as well as any regulatory and tax requirements. A good document management policy achieves at least three goals:
- It preserves business records while they have a useful life.
- It provides a legitimate explanation as to why certain documents may no longer exist.
- It limits the number of potential "search areas" which must be canvassed in order to prepare a response to a discovery request.
Implementing a policy that achieves these goals should make preparing the e-discovery response more efficient and economical. A document management policy should also include:
- a litigation hold procedure to preserve documents (including electronic information) which might be related to ongoing or reasonably anticipated litigation as well as government investigations or financial audits;
- a policy regarding the use of portable storage media to conduct company business;
- and a company policy regarding the use of "other computers" to conduct company business (i.e., employee’s personally owned computers).
These types of policies are intended to identify, limit, and control the number of "cubbyholes" in which employees may squirrel digital information. It will be important in developing these policies to involve the company’s Information Technology (IT) group early because they understand both the technological and cost implications and can provide invaluable advice.
But having a document management policy in place is only half of the equation. An organization must strictly follow the policy so the business can argue credibly that the prior elimination of information was in compliance with a reasonable document disposal plan that served legitimate business needs.
Stressing the Importance of Document Management
With a good document management policy in place, the next tasks in trying to reduce e-discovery costs are to sensitize company personnel to the importance of legal holds and to educate them to accept the fact that the drafts of company documents and emails on their USB drives (and other portable storage media) belong to the company for purposes of responding to e-discovery requests. Once the troops are trained, a standard response plan should be developed so that it can be implemented to preserve electronic information (as well as paper documents) whenever a new matter is filed or when litigation is anticipated.
Developing a Response Plan
Concurrently with developing and implementing an document management policy and procedures, companies should also develop a response plan so everyone knows what needs to happen when an e-discovery request is received. The following four steps should be built into the plan:
Step 1. Identify current and former employees who may have information relating to the dispute. In addition, those divisions or groups within the company that may have relevant information should also be identified (e.g., the accounting department). Also, the IT group should be involved so that it can assist in identifying and preserving relevant electronic information.
Step 2. Issue an appropriate hold order to those employees and groups within the company that may have relevant information, instructing them to retain all documents (including electronic information) and not to delete any information from their computers, any servers, or other storage devices, including portable storage media.
Step 3. Interview the key people and departments identified as having relevant information to ascertain how they generate, distribute, receive, and maintain documents and electronic information relating to the issues in dispute. This process should result in the identification of the relevant information retained on local hard drives, servers, shared drives, home computers and portable storage media. After these initial steps are taken, an assessment can be made regarding the scope of electronic material so that a decision can be made as to how best to preserve the information and whether any back-up or disaster recovery systems need to be preserved.
Step 4. At a minimum, all potentially relevant active files (i.e., files currently in existence) should be identified and segregated to a separate server or database that cannot be compromised. This process should be preformed by competent IT personnel so that any related metadata is not lost in the process. Further, consideration should be given to whether certain key individuals’ computers should be forensically imaged, particularly if an individual played a pivotal role in the issues underlying the litigation. Consideration should also be given to using software programs that perform keyword searches on computers and servers. This software can be used with minimal interference to operations and ensures that employees have not been overly restrictive in identifying relevant files. An added benefit of such software programs is that they can identify deleted and fragmented files for preservation.
Of course, doing the document preservation exercise in-house necessarily implicates the attorney-client and attorney-work product privileges, creating waiver issues when in-house or outside counsel explain the process to the opposing party or to the court. Consequently, a company may want to consider hiring a consultant to certify the data collection process. The consultant would work in conjunction with the litigation team, but separately go through the process of identifying and preserving the relevant material for purposes of testifying should an information retention issue be raised.
Good Communication Saves Time and Cost for Everyone
Once a lawsuit has been filed, it is highly recommended (and indeed required by several U. S. district courts) that the parties meet and confer regarding the handling of electronic discovery. By having such a conference early in the process, the parties can agree on the type of electronic information that needs to be saved, and thus potentially minimize the collection effort as well as avoid future discovery disputes over the spoliation of evidence.
Through careful planning and execution - by making a thorough effort to identify and preserve potentially relevant information - you will be able to minimize the cost of e-discovery by convincing your opponent (and the court if necessary) that you have taken the proper steps to preserve any potentially relevant information, thus avoiding the burdens of retaining duplicative versions of electronic information and, possibly, a restructuring of computer back-up systems and computer use procedure.