e-discovery 2.0

I was recently asked: “what are the first things you do when your client calls you about a case requiring e-discovery?”  So, for the benefit of all, I’ll post my answer.

My first caveat to the advice was context.  Since, while a lot of attorneys have attended CLEs or have read about e-discovery, it’s not the same in the real world.  As the old Spanish Proverb goes:

It’s not the same to talk of bulls as to be in the bullring.

Keeping in mind that reality may differ significantly from academics, here are some things to consider when the next e-discovery case comes up.   Please also keep in mind that these steps (like the EDRM workflow) aren’t linear and may in fact occur cyclically or in parallel:

1. Preserve, preserve, preserve

Nothing is more important than meeting the initial preservation obligation, which begins when litigation is “reasonably likely” – as opposed to just when the complaint is filed.  This first step in the long journey can easily be a trap for the unwary/unprepared.

The challenge once you’re past the trigger issue is to then identify the boundaries of the duty to preserve, i.e., what evidence must be preserved?   This inquiry is often initially comprised of identifying key players, date ranges and data types.

Another significant challenge in this step is to monitor and update the legal hold process.  And, given that litigation more often than not spans years, it’s easy to initially succeed at the preservation effort, but then later fail on execution.  The best way to minimize risk in this step is to move quickly from preservation to collection.  See Is Preservation in E-Discovery Overrated?

2. Work backwards

Once preservation (and ideally collection) is adequately covered, the next step is to start thinking about the end of the process and what success (or lack of failure) looks like.  The exposure and profile of the matter are important to consider when you embark upon an e-discovery project since it’s critical to scale discovery efforts appropriately.

One thing, in particular, that is very important to consider early in the process is the type of production format that will be preferred by reviewing counsel and the opposition.  TIFF-based image productions (which are historically well accepted) are often pitted against native file ESI reviews.  Either format may or may not be acceptable given the situation and the applicability of FRCP Rule 34.

3. Understand the technical landscape

Most attorneys, but for a rare few, aren’t capable of really comprehending technical nuances of the complex and interrelated IT systems found at most Fortune 2,500 enterprises.  Fortunately, they are quite adept at working with experts (either consulting or testifying) to help them get to the bottom of difficult to comprehend and explain issues.  The key is find the right technical people who understand IT systems and who can explain it to judges, juries, and attorneys alike, especially for some of the most common ESI repositories like: email servers, archival systems, shared network drives, instant messaging servers, archival repositories (e.g., tape libraries, real time back-up systems, etc.), records management systems, knowledge management systems, proprietary, but highly leveraged, internal applications, offsite repositories (e.g., hosted IT or email systems) and significant partner or subsidiary data stores.  In many instances it will make sense to leverage or create a map of the data universe so that nothing is missed and inaccessibility arguments can be cogently detailed.

4. Get your lingo straight

Assumptions, whether in e-discovery or not, are often dangerous.  In the complex undertaking where multiple parties are handling ESI it’s critical to make sure that everyone is on the same page especially since every company handles IT, records management, ILM and information security differently.  So, when working with these disparate constituents the outset of an engagement is the right time to make sure everyone is on the same page.  Therefore, standardize on a set of commonly used terms. Examples of potentially ambiguous topics include “imaging” ,“archive”, and “records.”

5. Don’t assume your client will really be helpful

I’ve been involved with hundreds of e-discovery engagements and I’ve found that almost universally the end client professes a profound willingness to help out.  And yet, actual “help” is relatively rare.  To qualify this, it may be prudent to ask several additional questions:

• Does the Client have the time to actually help?  Everyone at the client’s site has a day job that they’re tasked with above and beyond transient e-discovery needs.  So, while bandwidth generally is important, what’s more critical is the ability to comply with aggressive judicial deadlines.
• Are the people helping the ones you’d want to see on the stand?  It’s often not realistic to have internal folks (especially IT and Records Managers) stay isolated during the various pre-trial events - meet & confer conferences and potentially 30(b)(6) depositions so it’s important to evaluate how a given witness will fare when providing testimony.
• How likely is it that you client would throw you under the bus if things went wrong?  In my opinion, there is now more reason for outside counsel to manage the risks of an e-discovery project going awry.  See, Sullivan and Cromwell’s suit against EED.  Some will wisely bring in 3rd party consultants/experts to have a neutral, unbiased constituent in the process.

6. Build a budget and team (internal/external)

Everyone is probably now aware of how expensive e-discovery can be if managed improperly.  This makes it all that more imperative to work quickly to get a rough sense of the scope (which will lead to a budget) and the client’s willingness to absorb associated charges.  The most important step is to right-size the e-discovery effort with the risks inherent in the corresponding litigation/investigation.  Otherwise, there’s a high likelihood that e-discovery process will be over-engineered (too expensive) or under-scoped (cutting dangerous corners).

7. Figure out your risk profile

Similar to right-sizing the budget, it also makes sense to adopt a “horses for courses” approach to e-discovery since there is no singular way to handle a given matter.  For example, in one case you make take forensic images, restore backup tapes, capture instant messaging data, harness metadata, or decide to do an automated review with a with a “clawback” provision. In either case, the only mistake is to assume that an approach from another, dissimilar matter is warranted in the instant case.

8. Assume the opposition is better informed than you are

While this actually may not be the case, it’s a safer bet that assuming a level of naiveté that may not exist.  What is certain is that the Plaintiff’s bar is increasingly well informed and can be very aggressive.  They’ve seen the playbook that calls for baiting the opposition into a discovery misstep that can result in significant, case altering sanctions.  According to a recent survey, 63% of the polled attorneys said that e-discovery is being abused by counsel, so it’s important to be wary initially.

It’s also important to consider the potential reciprocity of a given matter and adjust your position accordingly.  In many instances it’s easy to consider your role only as a producing party, but with cross/counter claims it may be possible to simultaneously be propounding discovery and in the opposition’s shoes.

9. Prepare for an early case assessment

A recent industry survey found that effective early case assessment (ECA) approaches reduced overall litigation in half of the cases evaluated, and resulted in favorable outcomes for 76 percent of the cases.   The key to this methodology is to use the available next generation case analysis solutions earlier in the process, not just to review data for relevancy and privilege, but to:

• Identify the key players. This is critical in order to have a defensible legal hold process
• Evaluate the posture of the case to determine how it looks on the merits
• Diagnose potential outliers in the e-discovery process to facilitate meet and confer discussions and help create “inaccessibility” arguments
• Conduct a search term analysis for keyword negotiations during meet and confer discussions.  Objectively demonstrating the results of proposed search queries can go a long way in speeding up keyword negotiations

10. Don’t take search for granted

For many attorneys, e-discovery search is just like Lexis or Google.  Unfortunately, that isn’t the case.  Instead, it’s become highly complex and is now receiving significant judicial scrutiny.  In Victor Stanley v. Creative Pipe Judge Grimm suggested that attorneys need to rethink how they’ve traditionally managed the search process:  “[F]or lawyers and judges to dare opine that a certain search term or terms would be more likely to produce information than the terms that were used is truly to go where angels fear to tread.”  It’s now important to devise (and share at early meet & confer conferences) a defensible search strategy that can withstand judicial scrutiny.

The recent announcement of $18 million in financing for PSS Systems got me thinking about preservation.  PSS is a provider of enterprise-class preservation and litigation hold management systems with solutions starting in, from what I can tell, six figures.  Nevertheless, this begs the question, why would a Fortune 500 company need such an expensive enterprise class software application to manage legal holds?

So, let’s start from the top…

With the advent of e-discovery during the last decade an entirely new class of evidence spoliation came into existence - i.e., situations where electronically stored information (ESI), particularly back-up tapes, could inadvertently become overwritten, lost, erased, etc.  In the good old days of paper-based discovery, there was certainly an opportunity for spoliation, but paper documents didn’t routinely become lost or otherwise unavailable, unless in extreme instances of intentional spoliation.  For a particularly comprehensive tome on this type of negligent spoliation, please see this excellent piece written by Judge Scheindlin (of Zubulake fame).

Accordingly, in the past several years litigators have had to learn and then re-learn the notion that the duty to preserve ESI begins once litigation is “reasonably likely.”  Unfortunately, this duty to preserve is fraught with a number of practical challenges, including:

• When is the duty triggered?  For example, the duty is in most instances certainly in place prior to a complaint being actually served.  But, as you move upstream from that crystalline moment reasonable minds certainly can differ about when litigation is “reasonably likely.”  EEOC claims, in the HR context, are a good example of potentially early trigger points.
• Then, assuming that the duty is triggered what must then be preserved?  Is it just the ubiquitous email?  Or, as is more likely, will an increasingly broad and voluminous set of ESI be implicated, such as loose files, instant messaging, blog posts (maybe this one?), mobile or PDA/handheld data, deleted but forensically recoverable files, etc.?

Those two thorny problems aren’t the only issues that counsel needs to deal with when they embark upon issuing a legal “hold” – the decree that instructs custodians of their obligation to preserve all relevant information related to the matter at hand.  But, the duty to preserve is only the start of the challenge.  This is where folks like PSS come in, meaning that they manage the potentially complex logistical tasks associated with hold notification, monitoring, and compliance.

Here’s where I start to have a problems with large scale, complex preservation efforts.  Let’s take a somewhat common example:  a multi-national enterprise is sued for misappropriation of trade secrets.  Even prior to the complaint being filed, plaintiff’s counsel issued a demand letter, which in some cases could be held as a triggering event.  But, in either case, once the complaint hits the GC’s desk the duty to preserve is clearly in force.   Let’s then say that in consultation with outside counsel they wisely embark on a set of interviews to determine the scope of departments/locations/custodians that may be reasonably implicated.  Then, following the synthesis of this information they issue a legal hold notice to 2,500 people located throughout numerous domestic and international offices.

Now, here’s where the risk comes in…   One thing is statistically certain with that number of custodians: the legal hold will not be followed to perfection.  If I were more mathematically inclined I’d say it could be reduced to a formula along these lines:

Legal hold compliance *decreases* exponentially as you multiply:

• The number of custodians
• The length of time the legal hold is in effect
• The types and volumes of potential ESI that may be relevant
• The presence of individuals who don’t want data to be preserved due to their own perceived errors/foibles/omissions

The answer, in my mind, doesn’t lie in a better mouse trap to manage the vagaries of the legal hold process.  No, the best way to take the risk out of the legal hold process is to move very rapidly from preservation to collection.

Once ESI is collected two main things start to happen:

1. Subjective notions about the universe of data (allegedly) covered by the preservation process can be changed into objective observations that the custodians really are the right ones.  For example, in the above example the 2,500 custodian list is again almost certainly not correct.  Since the decision process was made subjectively (likely without insight into the data) the custodian list is inherently either under or over-inclusive.  However, with the advent of early case assessment solutions, the preserving party can now quickly collect and assess an initial corpus of data to ensure that exactly the right folks are in the collection/preservation process.
2. Once the ESI is collected, the risk of loss, deletion, etc. will largely have been taken out of the equation meaning that the danger of spoliation is greatly reduced.

My belief is that the larger the preservation effort the more likely there will be gaps that the opposition can use as leverage.  Scaling up the preservation effort is only one way to skin the cat.  Instead, the better practice is to start small, collect quickly, and then expand collection efforts once your legal team has objective insights into the case data.

Yes, preservation is still important. But, biting off more that you can chew simply means a statistically greater chance of failure.