e-discovery 2.0

Cheesy Successories posters aside (for an alternative take, go here), the need to work together is much more than just a cliché in today’s environment.

In its recent brief on the five major trends that will shape business technology in 2009, leading management consultancy McKinsey and Company noted one trend in particular which highlights the urgent need for an organization’s IT and legal groups to forge better, faster, and more efficient ways of collaborating on electronic discovery issues:

Regulators demand more from IT

Government scrutiny of business will intensify in many developed countries. Already, in the United States, the Office of the Comptroller of the Currency weighs in on the resiliency of banking systems, the Food and Drug Administration (FDA) requires that many pharmaceutical systems be “validated,” and Sarbanes-Oxley drives decisions about accounting systems in every industry. In the future, policy makers and regulators will probably demand that IT systems capture more and better data in order to gain greater insight into and control over how banks manage risk, pharma companies manage drugs, and industrial companies affect the environment. Government officials also will monitor many legal and business rules more closely to ensure compliance with mandates. Successful CIOs should enhance their relationships with internal legal and corporate-affairs teams and be prepared to engage productively with regulators. They will need to seek solutions that meet government mandates at manageable cost and with minimal disruption.

- McKinsey Quarterly, February 2009

The current economic environment is creating a “Double Whammy” within almost every enterprise that has ongoing or pending electronic discovery issues (and are there many organizations left out there that don’t?):

• As the McKinsey article notes, regulators will increasingly be demanding more from IT as government scrutiny of business intensifies. Just look at the just-launched recovery.gov site to see the level of transparency and accountability that the government is aiming for with regard to the stimulus package. The bailout will not directly affect every business, but there is a new sheriff in town who will likely set the tone across the entire business landscape.
• At the same time, there is relentless pressure on controlling costs. When times are tough, dollars that can be saved on the expense side are much more valuable that top-line revenue, since 100% of every dollar of cost savings goes directly to the bottom line.

The net-net: Enterprises will be forced to do more, with less.

How? With regard to electronic discovery, there is a lot of low-hanging fruit to be picked in the area of IT and legal cooperation:

• In-house legal teams should meet with IT (if they aren’t already) to help them better understand the nature of electronic discovery, particularly as it applies to the more “upstream” parts of the process (specifically, identification, preservation, and collection) which IT tends to be more responsible for. Through a better understanding of the nature of electronic discovery, IT can improve its ability find the right documents, avoiding over-collection and reducing downstream processing costs. In addition, new electronic discovery technologies are making it increasingly easy for legal to own more of the process, reducing the electronic discovery burden on IT.
• Conversely, IT should coordinate with in-house legal teams to provide advice and mentoring as legal seeks to bring e-discovery platforms in-house to assist with early case assessment, search, culling, and analysis. To many legal teams, bringing e-discovery in-house may seem like a daunting proposition, but enterprise software has been around for a long time, and learning from IT’s experiences can make the process far less intimidating.

Yes, regulators are going to be far more demanding in the future than they have been in the past. But some simple collaboration and coordination between IT and legal will go a long way toward lightening the regulatory burden, especially as it pertains to electronic discovery.